5th April 2016

Money laundering, mythical beasts, oligarchs and data dumps

The Chupacabra is a native creature of Panama. The name comes from the animal's reported penchant of attacking, killing and then drinking the blood of it’s prey, often goats.

Please humour me for a few paragraphs while keeping this thought in mind.

It has very recently come to light that offshore companies now own more than £200bn of UK residential property.

 The Land Registry released, in April, a complete list of 40,000 offshore companies that own nearly 100,000 properties in England. 

 Many of these are in the most affluent areas of the country. London in particular. And a number of the individuals behind these companies would appear to be Russian ‘oligarchs’ although I am sure that in BBC speak, “other nationalities and/or job descriptions are available” to buy.

If you want to buy a car, house, open a bank account, get a mortgage, engage a lawyer or an accountant there are a number of hurdles us mere mortals need to overcome.

Buying a house with a mortgage requires very significant levels of checks these days if you are a mere UK resident. 

Without a mortgage, it would seem, sees a very different picture, especially when ‘oligarchs’ and associated trades are involved in the vast movement of ill-gotten or plundered wealth.

It does seem to be the case that Animal Farm ‘Orwellian’ rules apply with some people being more equal than others.

The FCA clearly scratched the surface last year when it fined Barclays some £72,069,400 for failing to “minimise the risk” that it may be used to facilitate financial crime. For the record, the fine was the largest fine imposed by the FCA and its predecessor the FSA for financial crime failings.

The FCA said “Barclays did not obtain information that it was required to obtain from the clients to comply with financial crime requirements. Barclays did not do so because it did not wish to inconvenience the clients”. 

So the big question here is, what checks are made when foreign oligarchs, despots, drug barons, dictators and other offshore potential ‘shady’ types buy billions of pounds worth of UK property?

Why is it that in the UK, the first, possibly only checks are about if you are who you say you are with proof by way of an original document selection from a list such as a passport or drivers licence, council tax and utility bills rather than a requirement of proof by audit trail of where the money has actually come from, ignoring any sensitivities that could fall into the category of “not wishing to inconvenience the clients”. 

But wait, a simple money laundering web-based solution is now at hand to assist the ‘authorities’ in that process.

A scan through the Panamanian law firm Mossack Fonseca's recent , largest ever, leaked data dump should suffice, showing how clients too important to question or upset let alone inconvenience, can launder money, dodge sanctions, evade tax and avoid inconvenience.

And that brings me back nicely to the Chupacabra.

In this case it manifests itself in the form of many of Mossack Fonseca's clients whose ‘fiscal blood sucking’ activities have been well and truly exposed.

In future will the computer say no?

FSA/FCA, Panacea Comment