United Kingdom banks embroiled in Russian money laundering scandal

OCCRP: The Russian laundromat exposed

The NCA said the case involved a number of UK-established companies and that, according to current information, the bank accounts involved were nearly entirely held in non-UK jurisdictions.

The National Crime Agency and the Financial Conduct Authority will investigate where warranted, Kirby told lawmakers in the House of Commons in London on Tuesday after the allegations were raised by the opposition Labour Party. "We're determined to make Britain the most hard place in the world for global crime networks to channel their finances".

Read the full report, via the Guardian.

The evidence includes details of 1,920 transactions totalling almost £600m that went through United Kingdom banks, with a further 373 routed through U.S. banks, according to The Guardian. It is reported, that for 4 years, since 2010 to 2014, more than 20 billion dollars were moved out of Russian Federation.

Banking records detailing the scheme were obtained by the Organised Crime and Corruption Reporting Project (OCCRP) and Russian newspaper Novaya Gazeta.

The trail found that HSBC had processed $545.3m (£441m), RBS $113.1m (£91m) and Coutts $32.8m (£26.5) of Laundromat cash. Royal Bank of Scotland Group Plc, which is majority-owned by the United Kingdom government, processed $113 million, the newspaper said.

A further 373 operations are believed to have gone through USA banks, for a total amount of $63 million.

"The Financial Conduct Authority and the National Crime Agency take any such allegations seriously and will investigate closely whether recent information from the Guardian newspaper regarding money laundering from Russian Federation, or indeed any other media source, would allow the progression of an investigation".

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However, it added that while the Laundromat scheme involved companies established in Britain, their bank accounts were held in non-UK jurisdictions so the money did not generally move through its financial system.

While companies that shield owners' identities can be used legally, they can also be tools for laundering money, hiding assets or evading taxes.

Between 2011 and 2014, the 21 shell companies sent 26,746 payments from various accounts to 96 countries, including to some of the world's biggest banks, such as HSBC, Deutsche Bank, Bank of China, Bank of America and Emirates NBD.

Kirby stressed that the United Kingdom government wanted "financial institutions to lead the way in the global fight against money laundering".

Lloyds said: "We have effective processes in place to check the identity of customers as well as various tools to help identify suspicious activity".

And Citigroup said it continually takes steps to improve its systems for detecting money laundering or other illicit transactions "to anticipate and respond to the changing patterns of criminal and terrorist behavior". The money was transferred to Moldova and onto Latvia, thus entering the EU. The money then went to Latvia, inside the European Union.

The Guardian said that while all major British banks will face questions over why they did not raise the alarm on suspicious money transfers, they actually only processed money that had already been laundered.

The NCA said it is "willing to consider" helping Moldova to investigate money laundering, adding that when it previously examined the Laundromat case the bank accounts involved were mostly outside the United Kingdom.

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