Money-Laundering is a Global Problem

More recently, one of Vladimir Putin’s top officials set up a company on the UK’s Companies House website, where Grainholding Ltd, owned by Volodymyr Saldo, is headquartered in Ukraine. This is a problem because Saldo is under sanctions by the UK government, who have directed economic pressure towards Russia in solidarity for Ukraine. This is but one example, in a plethora of money-moving activity, funnelling into the wider problem of money laundering.

This issue can be felt closer to home, when considering the affordable housing crisis the UK is faced with. Renting costs are at a record high and tens of thousands of houses in the capital are uninhabited, while many struggle to find affordable housing, if any at all. But just how deep does the unchecked and unregulated trail of money laundering go?

Transparency International found that UK companies were complicit in 52 of the biggest money laundering schemes, with a total of £80 billion in illicit wealth, cumulatively stolen to launder and facilitate corruption. Facing next to this corruption, is Companies House, the UK corporate registry, which does not require proof of identity when individuals form limited companies through their services.

A look at this select committee publication from 2015, defines money laundering as “the process of concealing the origin, ownership or destination of illegally or dishonestlyobtained money by hiding it within legitimate economic activities in order to make it appear legal.” The destabilising and complex nature of money laundering abuses our society; and all those who participate in the global money-moving industry are effectively scoffing at our laws and freeriding on democracy.

In its foolproof form, democracy is a contract that affords everyone rights, freedoms and obligations. But money launderers, crooks and thieves enjoy a country’s rights and freedoms, without the obligations. Through means of obfuscation, oligarchs and kleptocrats view the UK as a hospitable place to hide their stolen money, thus reinforcing their reputations. Which in turn influences those in power: our politicians and facilitators.

The journalist and author, Oliver Bullough, whose books , ‘Butler to the World’ and ‘Moneyland’ examine money laundering’s inception, and through meticulous detail, call into action our own civic duty. After speaking with the author, he detailed the different methods crooks use to take advantage of financial regulation. He said that “shell companies were any legal tool used to disguise ownership,” whether through trusts or hybrid structures, these methods were used to “encourage investment or pass property, which were abused by crooks”.

In Bullough’s words, he told me how “incredibly easy” it was for crooks to launder money, where the tools used by crooks and kleptocrats, were the same available to the rich and wealthy. He went on to say that the implications to national security were grave and pernicious, causing a complex whirlwind of financial crime — concealed and untraceable.

As countless online reports and investigations would disagree, Bullough considers, “no one knows how much money is laundered worldwide, it’s an invented figure.” He noted that some estimate the figure to be around 2–5% of GDP, before rhetorically asking, “what are we counting?”

“The fluid nature of the threat,” Bullough said, “is part of the problem.” A problem which is political, financial, and entrepreneurial. The author talks of its threat to democracy, too, which he said “keeps criminals and kleptocrats going” and “undermines taxes”. He holds to account politicians, who do not treat the threat seriously and view money laundering as their “fourth priority”.

Perhaps the reason so many are in the dark with money laundering, is due to its foundation in complex accountancy, along with our government’s complacency to tackle the issue. Bullough reminds me that “very little work has been done” and emphasised the complicated-nature of the problem. Another element is the fact sanctions brought against oligarchs in the European court are not final and are open to challenge, as seen in the case of Volodymyr Saldo.

Criminal money was brought over to the UK over 40 years ago, and its effect is still punctuating global politics and the economies of today. This is a national and global problem that will require a national conscience, through civic participation and education, and through government action, but this time, as a top priority, instead of the fourth.