Is London the World’s Dirty Money Capital?

Deputy Foreign Secretary’s Bold Claims

Image Credit: Shutterstock / B. Lenoir

On Monday, the UK’s deputy foreign secretary made some comments that got people talking.

Shocking Revelation

Image Credit: Shutterstock / Salivanchuk Semen

In a keynote speech to an independent think tank, Andrew Mitchell claimed that nearly forty percent of the world’s dirty money – money obtained illegally, through means like drug trafficking or other criminal activities – is laundered through London and other UK territories.

London’s Role in Money Laundering

Image Credit: Shutterstock / ESB Professional

Mitchell stated, “On the issue of dirty money, it is important to recognize that Britain has a dog in the fight. According to some estimates, 40% of money laundering around the world – this is money often stolen from Africa and Africans by corrupt businessmen, bent politicians and warlords, and so on – 40% of that money comes through London and overseas territories and crown dependencies.”

UK’s Crackdown on Financial Fraud

Image Credit: Shutterstock / wellphoto

Mitchell made the comments as part of a bigger speech to inform the public about the UK’s new crackdown on financial fraud across its dependencies.

New Regulations on Beneficial Ownership

Image Credit: Shutterstock / bluedog studio

According to Mitchell, the Foreign Office is planning on introducing new requirements for crown dependencies and foreign territories to comply with UK regulations on the public disclosure of beneficial share ownership records.

Push for Open Registers

Image Credit: Shutterstock / Belish

He stated that the public would begin to “see a greater emphasis now on introducing these open registers of beneficial ownership” due to the new foreign secretary – former prime minister David Cameron.

David Cameron’s Priorities

Image Credit: Shutterstock / Andrey_Popov

Mitchell explained that Cameron made tackling dirty money a key focus of his last few months in power – but after he stepped down, the momentum came to a complete halt.

Warning to UK’s Dependents

Image Credit: Shutterstock / Thx4Stock team

He issued a warning to the UK’s dependents, stating, “If these overseas territories and crown dependencies want to have our king and our flag, then they must also accept our values, which is why we are so intent on ensuring dirty money cannot flow in and from there.”

BVI’s Resistance to Public Registers

Image Credit: Shutterstock / smolaw

Mitchell’s comments come hot on the heels of the government of the British Virgin Islands (BVI) refusal to establish a public register of owners of companies created on the island.

Human Rights Grounds

Image Credit: Shutterstock / Salivanchuk Semen

Despite pressure from the UK to accept its new tax evasion and anti-money laundering measures, the BVI government has instead said that they will follow a ruling from the European Court of Justice (ECJ) “to help minimize the risk of legal challenges on human rights grounds.”

ECJ Ruling

Image Credit: Shutterstock / Rawpixel.com

Last year, the ECJ ruled that privacy and data protection are fundamental human rights that must be respected and carefully considered when granting access to public registers.

Good News For Some

Image Credit: Shutterstock / everything possible

For countries that have been pushing back on accepting new anti-dirty money measures, this ruling couldn’t have been better.

Fear of A Wealthy Exodus

Image Credit: Shutterstock / Brian A Jackson

These countries are reluctant to set up public registers because they fear the wealthy will leave and take their money with them.

UK’s Limited Power Abroad

Image Credit: Shutterstock / Wasan Tita

The UK government has no constitutional mandate to change laws abroad, even in their own territories, and has faced an uphill battle so far.

A Lot Of Work Still To Be Done

Image Credit: Shutterstock / Salivanchuk Semen

Mitchell commented that “crown dependencies and the overseas territories have not yet done as much as they must do.”

Global Impact of Money Laundering

Image Credit: Shutterstock / Deemerwha studio

If Mitchell’s figures are correct and around 40% of dirty money is funneled through UK territories, that would be a huge amount.

The Enormous Scale of Dirty Money

Image Credit: Shutterstock / Pickadook

The UN estimates that anywhere between 2-5% of global GDP is laundered each year – around $2 trillion. 40% of that would be $800 billion, which is more than some countries’ total GDP.

Battling Money Laundering

Image Credit: Shutterstock / SeventyFour

The UK has been battling a “dirty money epidemic” for years, according to a large group of politicians, who last month warned that the government is “utterly failing” in their attempts to gain control over the issue.

Criticism of the UK’s Efforts

Image Credit: Shutterstock / Freedomz

According to these politicians, the UK’s money laundering woes are costing the country upwards of £350 billion per year despite a host of measures put in place to stop the flow of illegal cash in and out of the economy.

Dirty Money Worries

Image Credit: Shutterstock / nadia_if

Whether the UK will manage to get control over this apparent epidemic remains to be seen, but for now, it seems as though its dirty money worries are here to stay.

Remote No More: 19 Companies Returning to the Office

Image Credit: Shutterstock / Monkey Business Images

As the pandemic wanes, companies are recalling remote workers back to the office, sparking debates on fairness, costs, and convenience. However, there are also notable productivity, coworking, and mental health benefits to consider. Feeling the effects of these changes? Remote No More: 19 Companies Returning to the Office

8 Costco Must Buys and 8 to Leave Behind

Image Credit: Pexels / Gustavo Fring

Ever wandered Costco’s aisles, questioning if that giant jar of pickles is a real bargain? Or debated buying tires where you get your rotisserie chicken? Welcome to the definitive guide to Costco shopping—a journey to save money, prevent regrets, and offer quirky insights into bulk buying. 8 Costco Must Buys and 8 to Leave Behind

23 Reasons Texas Is the Next Big Thing

Image Credit: Shutterstock / Sean Pavone

Texas is becoming a beacon of opportunity, blending cultural heritage with economic growth. From its landscapes to its industries, the Lone Star State offers a dynamic lifestyle. Here are 23 reasons why Texas stands out, attracting entrepreneurs, artists, tech professionals, and families seeking new beginnings. 23 Reasons Texas Is the Next Big Thing

15 Top Sites to Sell Your Unwanted Goods Besides Craigslist

Image Credit: Shutterstock / GaudiLab

Selling your unwanted items can declutter your space and boost your income. While Craigslist is popular, there are many alternatives with unique features and wider audiences. Explore these 15 Craigslist alternatives for selling everything from furniture to electronics, finding the perfect platform to turn clutter into cash. 15 Top Sites to Sell Your Unwanted Goods Besides Craigslist

Work from Anywhere: 19 Companies Still Supporting Remote Work

Image Credit: Shutterstock / insta_photos

Tired of commuting and craving work flexibility? You’re not alone. Many companies now offer remote work, benefiting both employees and employers. Ever wondered how this shift could enhance your work-life balance? Work from Anywhere: 19 Companies Still Supporting Remote Work

The postIs London the World’s Dirty Money Capital? first appeared on Career Step Up.

Featured Image Credit: Pexels / iSAW Company.

The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

+ posts

Leave a Comment