| ▲ | Oarch 8 hours ago |
| As a Brit, I've never had the sense the UK (specifically the City of London) has any genuine interest in tackling money laundering. I suspect our economy is structurally reliant upon us being extremely good at it. |
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| ▲ | 0x3f 6 hours ago | parent | next [-] |
| If an oligarch extracts wealth from Russia and parks it in London... that seems like a win for London? It is a bit anarcho-tyrannical in nature though. That is, the AML/FCA stuff then has the outcome of only effectively constraining the UK's own law-abiding citizens. Which is... something of a disadvantage? Especially when half of what the FCA puts out in terms of regulations is pure time-wasting theater. |
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| ▲ | Lio 8 hours ago | parent | prev | next [-] |
| Really? What are you basing that on? Having worked at FinTechs and in finance in general that doesn't ring true at all. The FCA definitely takes anti-money laundering checks quite seriously. e.g. (off the top of my head) NatWest were fined £264 million for AML breaches. I'm no expert by any means but if I wanted to flout the rules I'd definitely consider a few other juristictions before the City. |
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| ▲ | londons_explore 8 hours ago | parent [-] | | AML tech is so primitive, it almost looks like it's designed that anyone 'in the know' will know how to not be detected. Eg. Most AML checks are done because someone wrote some triggering keyword in the payment reference field. Do we honestly think a criminal mastermind won't manage to come up with something else to write there? | | |
| ▲ | multjoy 8 hours ago | parent | next [-] | | The references are almost irrelevant. The banks + fintechs have far more depth than that. | |
| ▲ | Onavo 8 hours ago | parent | prev [-] | | The AML you are thinking of is designed to catch small time crooks and drug mules (and maybe also dumb terrorist supporters). They are not really designed (or more specifically deliberately obtuse towards) Slavic oligarch money. Not all "corruption" and money laundering are treated equally. Places like London (not to mention Jersey), Switzerland, and Singapore are more for good old fashioned siphoning-of-national-assets type of corruption where there's almost always a "clean" paper trail to back things up. Also, don't get tax dodging mixed with money laundering. There are plenty of processes required by OECD and similar orgs, e.g. the concepts of a LEI number, that are not really useful against real oligarch/state level money launderers. Here's a simple example: You lived in a former USSR/iron curtain state. During the chaos of '89 you managed to "acquire" lots of assets or finagle yourself into owning former public companies/real estate/factories. The paper trail is clean as far as your typical London banks are concerned because you are merely liquidating assets you own in your own country where there's a full paper trail (regardless of whether it was attained through illegitimate means). Alternatively, in a different narrative, you a rich international student from similar types of countries and you just happened to have "rich parents" who have plenty of money to throw around. It's a very different threat model than for example trying to prevent grassroots terrorism financing. Money laundering vs tax evasion have a lot of overlap but don't get them confused. They are very different threat models from the perspective of the service provider (and it's also why many smaller foreign banks refuse to accept Americans as customers, partially because of the paperwork required to stay compliant with Uncle Sam). If you want an actual no-questions-asked romp of organized crime type of money I believe the current main contenders are the middle eastern states like Dubai (pre Iranian conflict at least). Rumor through the financial grapevine is that ironically there are many GCC middle eastern royalty/pseudo-royalty currently under house arrest who are trying to do the opposite i.e. get their assets out of the country because their main bank accounts are frozen domestically. So basically real life Nigerian princes. (As for why they are under house arrest, it's kinda out of scope for HN but mostly because of domestic political purges, especially in Saudi Arabia from what I heard) | | |
| ▲ | RachelF 3 hours ago | parent | next [-] | | Australian house transactions are also commonly used for low-million dollar money laundering operations. Australia specifically exempts house purchases and the associated agents and their lawyers from AML laws. | |
| ▲ | Oarch 7 hours ago | parent | prev [-] | | Thank you for a very detailed explanation. The rich international student pipeline has always stood out to me – we've seen dozens of 30, 40 or even 50 storey skyscrapers built for students, enjoying lifestyles usually reserved for those in high finance. It just seems very suspect to me. | | |
| ▲ | Onavo 7 hours ago | parent [-] | | Well, I assure you most London bankers won't lose any sleep given that the money is often from Gulf states/places like China/ex Soviet oligarchies/various forms of corruption in the global south. The countries where the money flow out from often lack the means to actually pursue and prosecute overseas, especially for what boils down to "white collar" offences/corruption. It's only when anything like terrorism/organized crime/anything involving Uncle Sam's tax revenue occurs then the banks AML processes might become useful for more than just check-the-box compliance. You will often find that entrepreneurs and digital nomads get caught in this sort of of AML debanking web because the paltry 6-7 figs of business/personal transactions across countries often resemble mules/illegitimate businesses and the banks are not allowed to talk about it. (Just go to the subreddit for wise or PayPal and search for the keyword "frozen") Meanwhile international students can easily bring in 8 figs to buy houses and that's perfectly fine because it's "clean" as far as the compliance department is concerned. It's also a cultural issue, fintech platforms and neobanks try very hard to use heuristics to automate compliance. This is why I recommend digital nomads to use a proper cross border bank like HSBC Premier. You pay a lot more but you get a lot less of the "account frozen" bullshit. You should also take a look at this https://news.ycombinator.com/item?id=43001441 Countries that are caught in between corruption and terrorist threats and Uncle Sam are the worst generally. E.g. transfering money both into and from Turkey are a pain in the ass. |
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| ▲ | joe_mamba 8 hours ago | parent | prev | next [-] |
| Isn't the whole point of the City of London, to be a legal money laundering economic zone, that brings banks, corporations, money and jobs to the UK? |
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| ▲ | jordanb 6 hours ago | parent | next [-] | | Specifically the Eurodollar is the main reason for the City of London to exist. Eurodollars are US dollar deposits at European banks. Originally these were used as a way to give the Soviet Union access to the dollar markets through French banks, but eventually it became a way for basically anyone to participate in dollar exchange who can't have a US bank account. https://en.wikipedia.org/wiki/Eurodollar | |
| ▲ | echelon_musk 8 hours ago | parent | prev [-] | | Pretty much, yes. |
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| ▲ | fiftyacorn 8 hours ago | parent | prev | next [-] |
| I think the power is knowing who is moving what and where |
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| ▲ | mosura 7 hours ago | parent [-] | | Our money laundering supports freedom, while theirs supports tyranny etc. I love the whole “unexplained wealth” concept the UK developed, curiously enough after Abramovich had been running around buying Chelsea etc. If you are friend to MI6 this week you are allowed to do anything, but if you get on their wrong side you will be Berezhovskied. | | |
| ▲ | shiroiuma 4 hours ago | parent [-] | | There's a British TV series called "The Night Manager" that seems to show how MI6 really works and what its priorities are. |
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| ▲ | 8 hours ago | parent | prev | next [-] |
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| ▲ | underlipton 7 hours ago | parent | prev [-] |
| Western affluence was built on the movement of stolen people and goods; it stands to reason that its maintenance in an era where one of those is illegal and the other involves somewhat less looting might involve the movement of stolen debt (money). |
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