The darker side of London
The British capital annually recycles billions of euros stolen from public funds and other illicit origins, offering enormous investment opportunities
In the last decade, the London skyline has changed dramatically. Since the crisis began, the construction of skyscrapers has not stopped. Anti-corruption organisations claim that these investments come from money laundering. Even the author of the Mafia expose Gomorrah, journalist Roberto Saviano, says London is “the marketplace of money laundering and financial recycling.”
“London is attractive for several reasons,” says Ben Cowdock, research director of the UK’s Transparency International (TI). The stable legal system means that assets are safe there. London is also home to professional advisers who may, without even knowing, help move and hide assets. The real estate market and high prices offer high returns on investment, which means that illicit wealth can be laundered in a single transaction. London “is also a good place to launder reputations with good schools, public relations firms and institutions that accept donations, which all help make fortunes seen more legitimate,” he adds.
According to TI, billions stolen from public funds or bribes are easily injected into the system every year and the professional services make those illicit fortunes honest.
The Panama Papers in 2016 revealed that half of the 214,000 companies mentioned in the report , were registered in the British Virgin Islands.
UK companies often act as middle-men. In March 2017, TI found that €4.8 billion invested in the UK came from unidentified and suspicious fortunes. TI is concerned also that with Brexit the situation will worsen with “standards of control and prevention of laundering diminishing.”