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FOREIGN INVESTIGATIONS INTO MONEY LAUNDERING IN THE UK SHOW A STEEP RISE

14 June 2017

Foreign authorities are making more enquiries in the UK as part of money laundering investigations than ever before. Requests for information from foreign authorities rose by 12% last year to 163. The number of what are called mutual legal assistance requests is more than double the figure for 2012; due largely to concerns that illegally obtained money is being moved through UK banks and the property market.

These figures have been released by the Home Office following a Freedom of Information request. The National Crime Agency (NCA) has estimated that the amount being laundered each year through the UK’s financial system is more than £90 billion.

While recent years have seen more regulations placed on banks regarding how they report any suspicions about customers, the problem of the UK attracting money launderers from abroad seems to persist.

The Financial Conduct Authority has asked for information from UK banks, including HSBC and Royal Bank of Scotland, after revelations about the so-called “Russian laundromat’’ scheme. This allegedly involved UK-based banks processing almost 2,000 transactions amounting to $740 million on behalf of suspected Russia money launderers.

The laundromat scandal is just the latest money laundering scandal to hit British banking.

In 2012, HSBC was fined £1.2 billion for failing to prevent Mexican drug cartels moving money through its branches. Last month, Spanish authorities named seven former HSBC managers as formal suspects in a wide-ranging money laundering investigation triggered by Hervé Falciani; a former HSBC employee turned whistleblower.

Aziz Rahman, senior partner at Rahman Ravelli, said: “There are controls in place in UK banks but the volume of financial transactions and the number of financial institutions mean that money laundering is still possible for those who are determined to commit it.

“What now remains to be seen is whether the introduction of unexplained wealth orders - where those suspected of financial crime must explain the sources of the money – will do anything to deter those looking to the UK to launder their proceeds of crime.

“But regardless of the legislation that is in place, banks have to look long and hard at their operations and take advice from relevant experts to make sure they are doing all they can to minimise the potential for money laundering.’’


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