by Susan Hawley
from TruePublica Website
Britain's biggest banks have paid out £71 billion for misconduct in the decade since the financial crisis.
Much of these fines have related to money laundering but they were not prosecuted in the UK.
But it doesn't end there
does it - it just keeps on going.
In total, to the 9th
April, they have fined the industry or people in it collectively to
the tune of £272,487,887.
Tyrants, despots, mass murderers, terrorists, traffickers - they are just as good a customer as any as far as the banks are concerned.
Here, the British
government and its toothless Financial Conduct Authority fail
in every sense of the word. Money laundering through British tax
haven islands and crown dependencies is something the state approves
of - hence the lack of fines or punishment dished out for it.
I would think that is on
the light side...
Here is her take, (originally published a year ago), on money laundering by British banks.
The NCA's 2017 risk assessment for the UK found that high-end and cash-based money laundering remain "the greatest areas of money laundering risk to the UK," with retail and wholesale banking and private wealth management providing a "crucial gateway" for criminals to launder their funds.
The UK's wealth
management industry manages $800 billion of global wealth at
particular risk of laundering.
It is likely that the figure is far higher...
Deutsche Bank found "strong
evidence" that the UK had received $93 billion in hidden inflows
between 2006-2015 with a significant portion coming from Russia.
acknowledgement of the problem, recent figures show that the UK's
regulator for the financial sector, the Financial Conduct
Authority (FCA), which has primary responsibility for
prosecuting money laundering, only opened 24 investigations into
companies for breaches of the UK's Money Laundering Regulations
(MLR) since 2007 and has brought zero prosecutions.
The highest of these was
the £163 million (about $228 million) fine imposed on Deutsche Bank
by the FCA in 2017 for breaching
the FCA's own money laundering control rules by laundering $10
billion out of Russia in the "mirror trade" case.
All the other fines have been less than £10 million (about $14 million).
Startlingly absent is any
fine against UK headquartered banks, HSBC and Standard Chartered
which have both faced multiple fines for money laundering in the
United States and elsewhere and have been implicated in numerous
money laundering scandals.
The acting head of financial crime at the FSA at the time, Tracey McDermott, who now works for Standard Chartered Bank, said at the time:
One would have thought that some prosecutions, both of banks and of senior executives, would have helped ensure the rules were taken seriously.
stating in April 2017 that it may
start prosecuting companies and individuals for poor money
laundering controls where there are serious or repeated failings,
the FCA has yet to open a single criminal investigation under the
new Money Laundering Regulations (MLR 2017) which came into
effect on June 26, 2017.
The HMRC which supervises some of the very high risk sectors for money laundering, including company service providers, high value dealers, money service businesses and estate agents, and has the ability to prosecute, has likewise launched zero prosecutions against any company either under the 2007 or 2017 Money Laundering Regulations.
In 2017, it
imposed-regulatory fines on 886
companies totaling £1.1 million (about $1.5 million) or effectively
£1,290 (about $1,800) per company, but refuses to name those it has
Yet Deutsche Bank's fine of £163 million ($228 million) - the highest ever imposed in the UK - is less than half of that imposed by the NYDFS (New York Department of Financial Services) which fined the bank $425 million despite the fact that it was the London branch that provided the primary route for the laundering out of Russia.
Deutsche Bank still faces
criminal investigation in the United States for the same conduct.
In the first three months
of 2018 alone, U.S. regulators imposed combined penalties of $982
million (comprised of both civil and criminal penalties) on two
banks for willfully running defective anti-money laundering program.
Ensuring that the regulatory environment makes sure that banks think twice about taking on this business is crucial.
The FCA claims that significant progress has been made by financial institutions, but in 2017 it still found ongoing,
...for control systems
among the regulated sector and a mismatch between policies and
practice in relation to money laundering.
First and foremost, they should be probing what is behind the lack of prosecutions for money laundering in the UK.
There is no doubt that the UK legal system is itself at fault - the UK's corporate liability regime has been recognized by the Law Commission as inadequate for holding large global corporations to account.
The UK has introduced new
laws to tackle tax evasion and bribery to meet this gap, but is so
far refusing to take steps to do so for money laundering and other
While the FCA was not one
those included in this category, the FCA is funded by fees paid by
the bodies that it regulates.
The fact that the
can fire a FCA chief in
circumstances where financial institutions are complaining that the
regulator is being too tough, suggests that the FCA is not as
independent as it needs to be.
The UK's zero prosecution
strategy is no longer a credible response to the constant money
laundering scandals implicating its financial institutions.