Why is London money laundering capital of the world?

London [UK], April 1 : An expert on corruption studies and Central Asia politics in a webinar on Wednesday talked about 'why London is the money laundering capital of the world' and said, "there is a lack of political will to tackle this issue..."
The remarks were made by Thomas Mayne, visiting fellow at Chatham House, an independent think tank that focuses on International affairs. Mayne is part of a recent Chatham House report on, 'The UK's Kleptocracy problem,' which leads to the same broad conclusion.
The Open Forum webinar was moderated by Joy Macknight, Editor of The Banker, part of the Financial Times Group, UK.
London is at the centre of dirty money is quite widely accepted, but the crisis in Ukraine has once again put the issue in the spotlight, he said.
Transparency International UK recently reported that such "questionable funds" could be to the value of GBP 6.7 billion. Properties in the central London areas like the City of Westminster and Kensington and Chelsea form a huge part of this value.
Revealing the mechanism involved, Independent UK said, "It is held by companies in Britain's Overseas Territories and Crown Dependencies. The secrecy provided by these offshore financial centres is often used by those seeking to hide their ownership of assets."
"We have been promised since Tony Blair was Prime Minister that governments will address it. We have been promised that there will be a public register of ultimate ownership of property. It gets introduced to parliament various times then something else takes over and it's dropped. It seems it's not a priority for governments to tackle," said the director of anti-money laundering at London CDD, Darren Jones.
After the Ukraine conflict, the UK passed the economic crime act in a hurry. It entailed setting up a register of overseas entities and their beneficial owners and required overseas entities who own land to register. The buck stops though at the resources and manpower required to unfold the multiple layers of a certain company to reach the actual owner, even if on the books.
Reacting to the act from a practitioner's point of view Jones said, "if they don't do that then they might as well not bother passing the Act."
No wonder then that economic offenders from all over the world view London as a safe haven. An audience question pointed to two such people from India: Vijay Malaya and Nirav Modi who have been in the UK by playing through the British legal system, despite swindling money in India. The panel quoted many such cases some even enjoying media attention.
It's a lot about money, points out FarzanaBaduel, CEO, Curzon PR but, "sometimes we don't know who we are working for." A cultural-social-economic organisation might carry a different front while being funded by dubious sources and it's not always known.
"So far for the last twenty-five years we have relied on this wealth to fund our financial services, to fund our economy and turned a blind eye to these monies and a good example of this is the golden visa problems," said Mayne which forms the part of his most recent collaborative research, 'Criminality Notwithstanding', a Global Integrity Anti-Corruption Evidence programme report on the how and why the UK's unexplained wealth order (UWO) system has failed against kleptocracies.
Mayne also informed that their investigations have found out that half of these visas have been given to individuals who could pose a "risk to security".
"The UK has incredible soft power around the world, but we are resting on the laurels of our past and we are watching our integrity disintegrate. I have worked with over 18 different governments and they say to my face 'ugh' we can buy your prime ministers," said FarzanaBaduel.
"The UK has to be very careful about its reputation as you can rest on our laurels for so long. After a while, they will come to haunt us. Do we really want to be perceived as a country where our governance is weak and yet we can lecture other countries on the lack of their governance? People are calling us hypocrites," she further added.
Ukraine crisis has helped connect the dots between dirty money and what risk they could mean but the big question is as Thomas Mayne puts it, "Will the attack on Ukraine finally change UK's position?"