The National Crime Agency (NCA) is Britain’s national law enforcement and police agency. It was established in 2013 as a non-ministerial government department, replacing the Serious Organised Crime Agency and has assumed a number of responsibilities of other law enforcement agencies.
It is the UK’s lead agency against organised crime; human, weapon and drug trafficking; cyber crime; and economic crime that goes across regional and international borders, but can be tasked to investigate any crime.
Both the NCA and government are acutely aware of the scale of money laundering in Britain that they now admit is completely out-of-control.
In a report by the Treasury and Home Office it clearly stated its concerns but attempts to gloss over its seriousness – “The same factors that make the UK an attractive place for legitimate financial activity – its political stability, advanced professional services sector and widely understood language and legal system – also make it an attractive place through which to launder the proceeds of crime.”
The true amount and scale of money laundering in the UK is not known. Banks are by far the biggest problem. They use complex corporate structures and offshore vehicles to conceal ownership and facilitate the movement of criminal assets designed to baffle the authorities and they do so with impunity.
The NCA states on its own website:
“The best available international estimate of the amount of money laundering is equivalent to some 2.7% of global GDP or US$1.6 trillion in 2009. The NCA assesses that many hundreds of billions of pounds of international criminal money is laundered through UK banks, including their subsidiaries, each year. The scale of the laundering of criminal proceeds is a therefore strategic threat to the UK’s economy and reputation. The proceeds of virtually all serious and organised crime in the UK as well as the proceeds of a significant amount of international serious and organised crime (including corrupt Politically Exposed Persons seeking to launder the proceeds of their corruption and hide stolen assets in the UK) is believed to be laundered into and through the UK.”
Nick Maxwell, the head of advocacy and research at Transparency International (TI) said last October “It puts beyond any doubt that vast sums of money from the proceeds of corruption around the world are flowing into the UK, and our system for stopping it and preventing it isn’t fit for purpose.” TI have also stated that $2 trillion is the likely annual sum for money laundering worldwide as has the United Nations on Drugs and Crime (UNODC) and that the problem lies predominently with the banking industry – “money in the form of symbols on computer screens can move anywhere in the world with speed and ease.”
Given the statement by the NCA it is fair to say that British banks could be the facilitator of one quarter of all money laundering in the world today with the City of London now classed as the global money-laundering centre for the drug trade, says a crime expert. He found that banks were welcoming dirty money because they need cash, liquidity during the financial crisis, that is ongoing.
A first attempt at tackling the problem by the NCA was in its 2014 paper entitled “High End Money Laundering – Strategy and Action Plan” where it was made clear at the outset that “we do not have a clear view of the scale of high end money laundering and its impact on the UK economy.” This is an admission that the authorities have lost control.
In the same year the head of HMRC David Gauke also produced a paper entitled “No Safe Havens” – where it said:
“We are stepping up our efforts to tackle offshore evasion. Under the Prime Minister’s leadership of the G8, the UK has led a global leap forward in tax transparency, meaning there are fewer places to hide. We will now make sure that there will be tough new sanctions for those who do not come forward under HMRC’s offshore disclosure facilities. Those who continue to believe they can hide wealth offshore must know that serious consequences await them.”
David Gauke is an MP who claimed £10,248.32 expenses back from taxpayers to avoid paying the stamp duty and fees involved in the purchase of his home in London. Ironic because it is not only shameless but puts him morally in the wrong place to hunt out tax evaders who buy property for large scale illegal laundering of cash.
In the meantime, two years after the HMRC’s statement of intent, the Public Accounts Committee (PAC) went to the lengths of describing its success of prosecuting offshore tax evasion as “woefully inadequate,” while it identifies HMRC’s failure to gather intelligence on losses through aggressive tax avoidance as an obstacle to improving the UK’s tax laws.
Claims from HMRC that “£1.5 billion has been recovered from offshore tax evaders over the past two years thanks to the Government’s tough and effective approach” were countered by the PAC by saying “It beggars belief that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of even running a satisfactory service for people trying to pay their fair share.”
For all of HMRC’s claims of an “intelligence led approach” and compliance, they have failed. This was no better demonstrated than the 950 lines of enquiry resulting from the so-called Lagarde List stolen from HSBC’s Swiss banking arm, where just one conviction was made by HMRC.
The Tax Justice Network published its findings just four months ago and amongst other things found that “The United Kingdom also remains a huge concern. Its global network of secrecy jurisdictions – the Crown Dependencies and Overseas Territories – still operate in deep secrecy and have, for instance, not co-operated in creating public registers of beneficial ownership. The UK has failed to address this effectively, though it has the power to do so.”
At the November G20 summit in Turkey, Prime Minister David Cameron said that world leaders had agreed to do more to share intelligence and cut off funding for terrorists through money laundering.
More recently, the British government’s CONTEST counter-terrorism strategy called for the UK to be a ‘hostile environment for terrorist financing’. In October 2015 publication of the inaugural UK National Risk Assessment of Money Laundering and Terrorist Financing (NRA), asserted that ‘Countering terrorist finance forms a key part of the UK’s CONTEST counter-terrorism strategy’.
The NRA also stated that ‘The UK’s approach to countering terrorist finance focuses on three main areas: reducing terrorist fundraising in the UK; reducing the movement of terrorist finance into/out of the UK; and reducing the fundraising and movement of terrorist finance overseas. Yet, despite these worthy policy statements and objectives, it is far from clear that the UK is implementing a genuinely effective counter terrorism finance strategy.”
In other words, the UK has done little, despite its claims, to have tackled real money laundering, tax evasion and terror financing because the City of London, the banks that reside within its boundaries and tax haven jurisdictions are used for precisely that reason.
Planned government spending cuts will see thousands of police jobs being lost, leaving the public protected by the lowest numbers of officers since the 1970s, according to a private estimate circulating among police chiefs. In the meantime, government expenditure on counter terrorism has increased £500m and the NCA’s budget is protected.
According to the Crime and Policing Update (Nov 2015) “Cyber security will be enhanced with the creation of a new national cyber centre to make Britain the best protected country in cyber space. Government spending on cyber security will reach £1.9 billion a year by 2020, whilst MI5, MI6 and GCHQ will receive a further 1,900 extra security and intelligence staff.” The ‘Snoopers Charter’ and increased powers for MI5, MI6 and GCHQ, enshrines new capabilities in legislation which has taken years to get through.
All that additional expenditure, surveillance and cyber security and, as Rolling Stone put it when HSBC were caught laundering billions for drug cartels: “The banks’ laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows and washed their cash through one of Britain’s most storied financial institutions.”
And yet, clamping down on the City of London, the real pumping heart of global terrorism and crime seems out of the question. Both David Cameron and George Osborne seem so concerned about the artificial health of the City of London that special meetings were conducted to demand cast-iron legal protections for it as part of reforms to prevent the UK leaving the EU. All this whilst, to use a headline from The Independent, “Tory MPs brand David Cameron’s EU deal ‘thin gruel’, ‘watered down’ and full of broken promises” – but not for money laundering ops in The City, obviously.
Graham Vanbergen – truepublica.org.uk
Barclays today announced a fall in profits for 2015, bringing results season for the UK’s big banks to a close.
The bank blamed the squeeze on the £20bn fines raised against them, including the foreign exchange rigging scandal and PPI mis-selling.
Announcing that a further £1.45bn will be paid to customers who were mis-sold PPI, Chairman John Macfarlane suggested the combination of shrinking profits and charges would have a wider knock-on-effect for the UK economy – resulting in reduced lending to small businesses.
This is another example of the City of London using its power and influence over the UK economy to back politicians into a corner, and force them to roll-back financial regulation that goes against their interests.
But big banks have been failing at small business lending since the 2008 crisis and even before, for the simple reason that it’s just not part of their business model. Taking the time to get to know which small businesses are creditworthy is just not worth their while when banks can make much easier money lending to other banks or trading derivatives in international markets.
Slow global growth and mega fines for misconduct are symptoms of our broken financial system, not causes. The fact that banks like Barclay’s are now trying to hold politicians to ransom by claiming otherwise just goes to show how far they’ve regained their chutzpah as memories of the crisis fade.
But our politicians must be more prepared to call the City of London’s bluff, to make sure banks serve people, rather than put them at risk.
Despite their role in the last financial crisis, banks continue to threaten to move elsewhere if regulation is designed against their interests. HSBC’s recent threat to relocate outside the UK is only the most recent example of such tactics.
But our analysis shows that even if the banks followed through with their threats to leave, the impact would not be as disastrous as we’re led to believe.
The City’s contribution to UK growth is outweighed by the long-term damage it’s caused with financial instability. They pay less corporation tax than they did before the crisis, and contribute very little to the ‘real economy.’ The majority of investment is fuelling an unsustainable housing boom in the South East of England, while small business lending is already lacking.
In reality, London remains an attractive home for the big banks. Recent concessions made to the City are already rolling back the limited progress made by post-crisis financial reforms.
Our politicians should face up to the real cost of the City of London to our economy. They should look past the overstated contributions of our financial institutions and recognise that, quite simply, the interests of big banks should not come before those of the rest of us.
Results week for the UK’s biggest banks is well underway.
HSBC have already announced profits of £13.2bn for 2015 – bouncing-back from the slump they experienced in 2014. Lloyd’s Banking Group is also expected to be celebrating tomorrow, with big bonuses for the usual handful of executives already confirmed.
On Monday we revealed the £5.8bn implicit subsidy already enjoyed by big banks, courtesy of the taxpayer. It’s just one indication that post-crisis reforms did not fix the structural problems with the UK banking system.
Not only that, but a string of recent concessions to the City has started to roll back what limited progress was made since 2009 to reform our broken banks.
How have they managed to fast-track a return to business as usual? Big banks have chalked up six recent victories:
Big banks take much more than they give to our economy. The Chancellor’s recent talk of a ‘new settlement’ between the government and the City is dangerously complacent – he and other ministers must be more prepared to face down their demands.
With the global economy facing a slowdown and economists warning that another crash could be just around the corner, it is more urgent than ever that we address the shortcomings of banking reform that promised to fix our broken financial system.
At last weeks budget, Jeremy Corbyn failed to truly capitalise on the opportunity to attack George Osborne even though he did criticise the deteriorating state of the NHS under the Tories along with public health budgets, mental health budgets and adult social care. His biggest moment came though when he stated
“Earlier this month the government pushed through a £30-per-week cut to disabled ESA claimants. Last week we learned that half a million people will lose up to £150 per week due to cuts in personal independence payments. I simply ask the chancellor this: If he can finance the giveaways he has put in his budget to different sectors, why can’t he fund the need for dignity for disabled people in this country?”
Osborne, Cameron and May went positively ashen as this one comment was then to set the scene for political packs of cards to shake in the run-up to Iain Duncan-Smiths resignation. The fallout from Osborne’s attack on the most vulnerable was bound to have consequences and it did.
In the meantime, as usual, the devil is in the detail and once again George Osborne’s budget, the eighth in five years is masked by sleight of hand, misinformation and even disinformation.
The UK national debt (total national debt) continues to increase as does the deficit (the amount annually it costs in excess of taxes and receipts to run the country). However, the deficit and therefore the national debt are actually shielded somewhat by the fog and mist of confusing economic data.
This is amply explained in one paragraph by the FT who did not mince words:
“It was not supposed to be like this. When George Osborne boasted in his November economic forecasts that his “long-term economic plan is working”, the chancellor did not anticipate having to warn in January that “anyone who thinks it’s mission accomplished with the British economy is making a grave mistake”.
The Office for Budget Responsibility (OBR) and therefore the Chancellor, almost always overstate national economic performance to such an extent that in the last 50 years only 23 percent of quarterly projections have been correct, the balance entirely revised downwards. They range anywhere from the encouraging to the dire – this time aligned to the latter, as the FT went on to explain:
“After revising down the estimate of economywide inflation to the lowest level since 1960, the official statisticians said nominal gross domestic product — the absolute value of all goods and services produced in Britain — was growing at a rate 1.3 per cent lower than previously thought. By February, the ONS reckoned the nominal size of the UK economy in 2015 was £1,864bn, some £18bn less than the official OBR forecasts made only three months earlier.”
To fill the surging black hole of spiralling public indebtedness, Chancellor of the Exchequer, George Osborne is now pillaging state assets, built up over generations, to buy some time in the hope that his self proclaimed ‘economic miracle’ doesn’t evaporate, which clearly it is.
As truepublca reported some months ago, by the end of this year alone, Osborne will have sold £60 billion of state assets and by the end of this parliament (in 2020) that total will have reached a staggering £100 billion, not including buildings or land (unpublished by the government) – more than Thatcher, Major, Blair and Brown combined. And 2015 saw the largest sale of state assets in a single year ever.
The accelerated privatisation programme has so far even included the national blood plasma supplier, foresentic services, ambulance and fire equipment services (to name a handful) and they are to be joined by the sale of Air Traffic Control, the Met Office, Ordinance Survey, Nuclear fuel processor Urenco, Land Registry, Channel 4, The Royal Mint, the list goes on.
The government more widely have been very quiet about the sheer scale of the selling of state owned assets as the nation’s debt is much lower than it would be if nothing had been sold at all.
Also entombed within the budget statement was another embarrassing figure Mr Osborne would rather you were not aware of.
Losses on the taxpayer stake in the utterly disastrous RBS bank is much worse than forecasted. The OBR has silently revised up its forecast for losses in it to an estimated £22bn. RBS lost £46 billion on it’s own, then was bailed out for the same again, lost that over each and every quarter since the start of its financial implosion and additional losses to the taxpayer will inevitably be about half of the bail-out again.
Unlike the sale of the Post Office where the taxpayer lost out because shares were priced too low, this time the taxpayer loses out because shares were acquired at a price now trading at barely 50% of what was paid for them.
The treasury even said last year that the taxpayer would get a windfall of nearly £15 billion on the bail-outs as a result of selling its stake. But nowhere does Osborne announce that the cost of funding these gargantuan bank bailouts has now reached £18 billion.
It didn’t help that the ONS also failed in it’s manufacturing figures. Manufacturing output is now 6.1 per cent below the level that it had reached when at peak confirming that focus by the government in this critical area of economic activity which has been diverted to financial services has failed.
This negligent and foolhardy approach to shoring up the nation’s finances is making everyone much poorer, especially future generations. Osborne is backing up his statements on meeting (missed) self imposed targets on deficit reduction by predominantly making the worst off in society shoulder the burden of reckless policies and then selling the nation’s future to the highest bidder.
Many of the asset sales in Britain actually contribute to the treasury, but once sold, the national income will decline after the one-off revenue hit by private corporations, who, more often than not, do not pay the full market price of the asset in the first place. Not investing in manufacturing is a self inflicted wound. Focusing on enhancing the systemically failed financial services industry is suicidal.
To give some perspective, the National Debt began the 20th century at about 30 percent of GDP. It jumped to above 150 percent in World War I and breached 200 percent during World War II. Both of these events were extreme to say the least. Debt then declined to 50 percent of GDP by the 1970s and dipped to 25 percent by 1990. The National Debt began a rapid increase in the aftermath of the worldwide financial crisis of 2008 triggered and then accelerated domestically by the likes of rapacious organisations such as RBS.