UK To Take Action To Clampdown Money Laundering
UK’s Economic Secretary Simon Kirby has reiterated the government’s commitment to crack down on money laundering practices in the aftermath of a report that revealed that UK's biggest banks have been involved in a Russian scheme to launder money.
According to the Guardian, several major British banks including HSBC, Lloyds, the Royal Bank of Scotland and Barclays have processed nearly $80 billion (£65 billion) under a money laundering operation. HSBC alone has allegedly processed suspicious deals worth $545.3 million.
Addressing the House of Commons, Kirby said that the government would be taking whatever measures required to identify those abusing the system. The laundering program was active from 2010 to 2014 and is said to have aided the transfer of at least £15 billion from Russia. These sums transferred are suspected to be largely belonging to organized crime groups and corrupt officials seeking to legalize tainted money.
Under the scheme, front companies were created in the UK and used to move money using fake business deals. The parties involved would subsequently launch legal suits in Moldova seeking repayment of loans. According to Vasile Sarco, an investigating officer in Moldova, British banks were vital points of transit for the money. New Banking records revealing details of the scheme have been acquired by the Organised Crime and Corruption Reporting Project (OCCRP) and a Russian newspaper Novaya Gazeta.
According to the documents, nearly 70,000 banking transactions were carried out under the operation. Around 1,920 transactions were routed through UK banks while 373 were via US banks. The records are said to have been collected as a part of a three-year investigation led by authorities in Moldova and Latvia. Shadow Chancellor John McDonnell has demanded that the issue be investigated by the National Crime Agency.
In a statement John McDonnell said,
Britain cannot be a haven for the criminals of the world who are looking to hide their money. [It is] deeply disappointing that there are British banks involved in yet another banking scandal as the actions of a few shouldn't overshadow the hard work of the thousands of employees in the sector who will have had nothing to do with this case.
All the banks involved in the scandal have said that they have appropriate safeguards in place but some officials have said the large volume of transactions make it difficult to spot these fraudulent transactions. Kirby has indicated that a new legislation is being introduced that will be a lot more efficient in helping to tackle the problem and offering improved information to law enforcement authorities.
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