Tuesday, October 27, 2015

Osborne should start dealing with the obscene level of money laundering crime and stop obsessing over working tax credits!

I had a great interview yesterday on the Max Keiser programme, during which we discussed the dichotomy that is George Osborne! Max teased me for my recent blog in which I accused George of unwittingly facilitating financial crime in the City! Of this, more later!

George Osborne has now been defeated in the House of Lords over his deceitful attempts to deny working tax credits to ordinary men and women who are working for a living, but at a low standard of income.

I say his plans are deceitful because a) they were not part of the Tory Election Manifesto in the first place, Osborne refused to say where he would make cuts in public expenditure, and Cameron had said publicly that he would not cut tax credits (although it is now not clear whether he meant child tax credits or working tax credits)! Secondly, the Tories tried to cheat by putting the deal through in the form of a Statutory Instrument (which the second chamber can vote against) as opposed to a finance bill, which by tradition, the second chamber would not vote down.

Perhaps what is more important is the fact that this blatant attempt to hoodwink the House of Lords, backfired on the Tory toffs, and they have been made to pay for it. It is all typical of the way in which they think to run politics in the UK, it’s all part of a silly public schoolboys’ game, in which the clever side which can dissemble better, wins the prizes. It is all predicated along the lines of the debates in the Oxford Union, during which witty and clever tricks are pulled on the opposition. Under other circumstances, it would all be so terribly funny, except that it has terrible implications for the lives of hundreds of thousands of working people who rely on working tax credits to keep their heads above water.

Of course, the Tories are whingeing and bleating, accusing the House of Lords of unconstitutional actions and threatening all kinds of dire retribution, including the possibility of flooding the second chamber with up to 150 new peers to give the Tories a majority there.

It isn’t going to happen of course. Just the thought of the toffs party creating 150 new peers to railroad through unpopular Tory policies designed to grind the faces of the poor, is so risible, that even this present bunch of spivs, second-rate accountants and Little Englanders will think twice before doing such a stupid action.

But the point to remember is that this piece of political chicanery was designed to take away £4.4 billion in working tax credits from people who need it most, people who are working and who may have young children and who, without the benefit of this payment, will find it incredibly hard to manage.

Working tax credits are in fact a subsidy on employers who have been encouraged to pay very low wages. The money which the tax payer is paying out is subsidising the employers who are paying wages, some of which are below the statutory minimum.

I don’t have anything against a man or woman who starts up a business, with the aim of creating a product, or providing a service, and who, in so doing, provides work for ordinary people. As long as the employer pays a fair wage on which his workers can live with dignity, and pays the correct level of taxes he is required so to do, then I don’t care if the employer becomes very rich indeed.

But if he is paying wages which are so low that the employee needs to seek a state handout in order to survive, then I want to know why I am subsidising that employer’s profits. I don’t want to live in a welfare-benefit society, I want to live in a society where men and women are paid fairly and sufficiently so they don’t need recourse to welfare, but it is not realistic to take tax credits from people now in return for the promise to the future of better pay in 5 years time! That doesn’t cut any mustard at all!

These points were all raised and aired yesterday in my talk with Max Keiser.

The biggest point I wanted to make was that in their attempts to curb the benefit culture, the Tories are attacking the one group of society, who can afford it least, while at the same time, they are rewarding a small group in society, the bankers and the financiers with a very great deal of money, men and women who are busily getting very rich indeed on the proceeds of the foreign criminal money which is flooding into London.

So, on the one hand, Osborne is seeking to take away money from people who have been depending on its legitimate receipt in order to make ends meet, while at the same time, turning a blind eye to the wholesale breaking of the criminal law, in the way in which the crooked bankers handle and facilitate vast amounts of foreign money which is finding its way into London.

So there is one rule for the absurdly rich, dishonest and powerful in society, and another for the poor and marginalised.

Now, at this point, I expect to start receiving messages from the unreconstructed spivs who sometimes read my blogs to see how much they can disagree with me.

 ‘If we don’t accept this money, it will merely go elsewhere’ is quite a common observation.
‘It has always been like this, why are you making such a fuss’ is another.

My point is that we have laws in this country which have been introduced to prevent the proceeds of crime from being easily assimilated into the financial system.

Those laws and regulations require banks to undertake significant checks and due diligence procedures to ensure that they know the provenance of the funds, and so they can demonstrate a good knowledge of their customer, his or her business practices, and sources of finance and wealth, in order to be able to satisfy themselves and the regulators, that the funds they are handling do not come from illicit or illegal; sources.

Put it like this, if a man were to walk into a bank with a bag marked ‘swag’, we might think it odd if the bank teller did not make some enquiries as to the provenance of the money being offered to his institution, before accepting it!

The fact that the money is paid into the bank from an account held in some offshore jurisdiction, or from a solicitor’s client trust account, does not release the banker from his obligations to make the necessary enquiries to establish the lawful provenance of the money.

That illicit money may only be passing through the financial system via the bank account in London, but you may rest assured that the bank will be taking a fee for such a facilitation, and the larger or smellier the sum of money being transmitted, the bigger will be the fee.

But George is making it easier and easier for his friends in the banking sector to accept this money, and that is why I accuse him of unwitting complicity in the facilitation of international organised crime.

You do not help to prevent crime by de-regulating the financial sector within which much of the criminal facilitation is taking place. If you are serious about trying to prevent crime, you first make sure that the regulations are being applied and properly performed, and we know from repeated reports from the FCA and the NCA that this is not happening, yet George just goes blithely on ignoring them!

You should make sure that the banks are taking the necessary steps to identify potential Politically Exposed Persons, before their money is paid into your bank. In a story in The Times, yesterday, it was reported.

“...General Franco amassed a fortune by siphoning hundreds of millions from the Spanish state, according to a new book. 

The dictator, who died in 1975 after ruling Spain for 36 years, took money given to the state, and from state enterprises, at a time when millions were starving in the aftermath of the civil war from 1936 to 1939...”

None of this money has been recovered and Franco’s descendants are still living off the benefits of its criminal origins. 

When I was a serving detective, we used to say that if there were no people willing to handle the dishonest proceeds of thieves and robbers, it would make life significantly harder for the thief to benefit from his crimes. That is why the Courts have traditionally punished handlers more severely.

The same goes for the banks in their handling of stolen money, if they were less willing to accept the money offered to them in dubious circumstances, criminals would find it much harder to profit from their crimes. Yet strangely, nothing is happening to bring the bankers to book.

Iceland has so far sentenced 26 bankers and financiers to prison terms for crimes related to the global financial crisis. Their combined jail time is 74 years. A great many more prosecutions are expected. In Britain, no banker has yet been tried or jailed for such crimes. It makes you wonder whether bankers might be some sort of "protected species"

We should not be expected to continue to put up with this egregious level of criminality and wrong-doing from within our banking system, and bankers should not be able to get away with the winks and the nods they are being given from the Treasury as to which money they can accept.

Again, a staggering level of British hypocrisy is involved.

If the Government wants the banks to be able to accept this loose money with impunity, then the least they should do is to repeal the laws which aim to deal with the criminal laundering of dirty money.

Take these laws off the statute books and advise the banks that it is now open season for them to accept any money they want to. Of course, this would not go down well in our relations with Europe or the USA for that matter, and so rather than face the degree of political opprobrium which would necessarily follow such a decision, the Government turns a convenient blind eye and lets the banks carry on with’ business as usual.’

Wednesday, October 21, 2015

J'accuse George Osborne

The time has come to state an unpalatable fact which I nevertheless believe to be true.

I believe that George Osborne, our Chancellor of the Exchequer, has become unwittingly a pawn in the facilitation of banking crime.

I do not know what other explanation fits the facts.

I say ‘unwittingly’ because I do not believe he is doing this maliciously, he is doing it because he simply doesn’t know any better. 

He is bending to every protestation of innocence the bankers pour into his ear. He is listening, willingly, to the entreaties of the banking PR milieu, and he is happy to entertain the applications of the British Banking Association when they assure him that everything in the banking garden is rosy!

I think part, if not quite a lot of it, has to do with his class, background and education, and that leads him , I believe, to look upon bankers and the banking industry, as a group of honourable men and women, who are working for the benefit of UK plc. 

He is, I suspect, I subscriber to the generally-held belief, common among senior bankers that they are a protected species, and that they are incapable of doing wrong. If, for whatever reason, a case develops which ends up with a banker going to prison, then George and his friends in the financial sector will simply refer to the ‘rotten apple’ theory, as if that explains everything.

I have been keeping an eye on George for some time!

I have also been monitoring the developments of the de-regulatory changes which are being inexorably introduced in the banking sector, making life even easier for the bankers to accept foreign, dirty and criminal money, without having to ask too many questions.

There is a great deal of very questionable cash flowing around the world, like a ‘ball of hot money’, looking for a temporary home. I am using the motif for dirty money first coined by Professor Tom Naylor in his wonderful book ‘Hot Money and the Politics of Debt’, and never has it been more accurate.

We are talking about billions and billions of pounds, dollars, and euros, and it needs protecting, to keep it out of the purview of international law enforcement. By far the greatest volume of this dirty criminal cash emanates from Russia and China, closely followed by other Far Eastern kleptocracies, Middle East bribe-fest centres and emerging market business centres like India and Pakistan whose successful entrepreneurs don’t feel the need to pay taxes.

This money which represents the proceeds of wholesale tax evasion, state corruption, criminal capital flight, drug trafficking, cyberfraud, people-trafficking and wholesale money laundering, is generically known as ‘the proceeds of crime’, and it emanates from a variety of dubious activities and processes.

Much of it is money generated from the exploitation of the badly-enforced laws of the countries from whence it comes, and much of it should, by right, be being used to support and benefit the general population of those countries by paying for health services, education, hospitals, roads, and other infrastructure services.

This money, sequestered by the illicit activities of crooked players is being squeezed into the secret underworld of shadow banking, and represents a vast ball of hot and homeless money which needs to find a home, and the longer it can be kept out of the banking system, the less value it has to the criminal who stole it in the first place.

This money provides the fundamental and underlying motivator for the British banking sector of the City of London, and it represents a most tempting target for the itchy palms and the sticky fingers of the denizens of Threadneedle Street and Canary Wharf!

They couldn’t give a monkeys’ about the fact that it is of criminal origin, and thus denied to them by a raft of international laws and regulations. These are not the sort of people to let mere rules get in the way of their achieving their goals.

The Times reported on October 20th that millions of pounds of dirty money has been laundered through London because the ‘golden visa’ system is so open to abuse.
Tier 1 Investor Visas which give guaranteed British residency in return for a £2 million investment are an open sesame for money laundering.

Since their introduction in 2008, 3,048 such Visas have been issued, of which over 60% have been given to wealthy individuals from Russia and China.

In 2014 of the 1,173 visas issued, half went to wealthy Chinese citizens, just at the same time as Beijing was seeking to trace vast amounts of money believed to have been stolen through corruption by bent public officials.

Transparency International, a major NGO dedicated to identifying and exposing corruption has reported that ‘...at least £3.15 billion has entered Britain as a result of the Visa scheme...’ T.I estimates that a significant amount of this money represents corrupt proceeds stolen from China and Russia.

Now, here is the rub!

Before any bank can accept one penny of any proposed investment, it has to satisfy itself of the legitimacy of the provenance of the money. This is an obligation placed upon it by law, and the bank has the primary responsibility to ensure that it has completed all the necessary due diligence, and is satisfied that the money is not of suspected criminal origin, before it can accept it legitimately! 

It has to carry out detailed ‘Know Your Customer’ investigations, and particularly where the proposed client could be what has been known as a ‘Politically Exposed Person’ or PEP, it has additional due diligence enquiries to complete before it accepts the money.

Of course, as you can imagine, such requirements are strictly adhered to by British banks, who are famous for their adherence to laws and dedication to undertaking clean and honest business!

In the article in the Times, a representative of the British Banking Association, the talking shop for the banking industry has said; ‘...There are certain jurisdictions that pose challenges for banks in determining sources of funds. We would welcome and improvements to the Tier 1 Visa scheme that enhance transparency and enable banks to fulfil their financial crime responsibilities...’

Quite what this civil service-inspired piece of wabble-babble is meant to mean is unclear, but the message is that the banks would like to be able to have it easier to accept the money.

How much easier it needs to be is not certain as the banks do not seem to have any trouble in accepting the proceeds of this dirty money tsunami. The report last week by the National Crime Authority made it clear that the volume of criminal money laundering being undertaken in the UK poses a major threat to UK national security.

At present however, there are no live investigations into the flows of corrupt funds from China being undertaken in the UK, despite the fact that the Beijing authorities are running an international operation to  recover an estimated £82 billion in stolen funds. This does not include the further £31 billion of corrupt funds leached out of Russia!

Well, how does the Home Office try and ensure that dodgy money doesn’t come into the UK via the Visa system? What fool-proof systems has it put in place to stop the flow of blood money?

A Home Office spokesman quoted in the Times said:

“...We require an applicant (for the Visa system) to have a UK bank account – and therefore pass the bank’s diligence checks – before they apply for a Visa...’

I kid you not! 

You couldn’t make this sort of crap up (that is of course unless you were a civil servant in the Home Office). Only such a person, who had had their brain surgically removed ad reinserted in their rectum could come out with a quote like this! And the best bit is – they see no irony in the statement!

So there you are. You want to come to the UK and you are willing to pay £2 million for the privilege. Now, on a balance of probabilities, there is a high degree of likelihood that you may have other funds secreted about your person, but before the UK Government will let you in, you have to have a bank account already set up, so that when you arrive, hey presto, you are already equipped to give the money to George’s friends in the City. 

This really is the most insouciant rubbish, but if you see no evil, then you will hear no evil, and that is where George re-enters the tale.

Back in 2013, the Parliamentary Commission on Banking Standards said that the old regulatory regime had failed to provide a system that could hold senior managers of financial institutions to account for banking failures, including those that were brought to light in the financial crisis. 

As a means of deflecting attention from what had become a very serious target for public anger, the Government proposed a new approach, which would hold senior officials of banks responsible for banking failures unless they could demonstrate that they were unaware of any wrongdoing while they were in charge.

This would have been an excellent step towards requiring bankers to demonstrate that for once, they were taking proper steps to ensure public accountability and that they were now accepting their responsibilities, and not just trousering vast sums of cash.

Well, you can imagine the angst this provision caused among the suits in the suites, and they immediately instructed their lobbying agencies, their PR teams, and their learned friends to find ways of getting this, otherwise reasonable requirement, changed.

Well, bless him, George has now bowed to their demands. No doubt he reckons that enough water has flown under the bridge since the Banking Commission’s deliberations, and that most people will have forgotten the awful stories and tales of incompetence, crime, negligence, recklessness and downright stupidity that daily flowed from the Committee room.

But these applied only to bankers, you know, the nice chaps in the suits, many of whom went to the right schools and universities, indeed, some of them may have even been contemporaries of George at Oxford, and like I said earlier, when it comes to dealing with members of that class, George hears and sees no evil.

So now, George has scrapped the controversial plans to make senior executives in the financial services industry prove they were unaware of any wrongdoing on their watch. 

The about-turn, which was unveiled by the Treasury on Monday night, forms part of the Government's Senior Managers and Certification regime, where top managers across the financial services industry will be held accountable for regulatory failures under new rules designed to stamp-out wrongdoing and recklessness. 

The initial proposals imposed a requirement that senior staff should demonstrate that they had not known that wrong-doing was being carried on.. 

However, following pressure from the industry and warnings that the rules would deter top talent from coming to the City, it will now be up to regulators to prove that steps to prevent regulatory breaches were not followed. 

Yet again, the usual bromide about top talent being deterred from a following a City career was trotted out, and yet again, George swallowed it.

Regulators will now have to prove wrongdoing as Treasury extends plans to make top executives accountable for failures on their watch across the financial services industry
Executives will now have a statutory "duty of responsibility" that will require them to take steps to prevent regulatory breaches. 

Andrew Bailey, the Bank of England's governor for prudential regulation, said he "strongly support[ed]" the Treasury's announcement, and denied that it represented a watering-down of the initial proposals. 

Well no, that’s just not true!

You see now, any banker who might be unfortunate enough to have to be investigated for any breach will simply be told by his lawyers to maintain his right to silence and to refuse to answer any questions that might tend to incriminate him.

Bailey says; "The introduction of the ‘duty of responsibility’ in place of the 'presumption' makes little difference to the substance of the new regime. Once introduced, it will be for the regulators (rather than the senior manager) to prove that reasonable steps to prevent regulatory breaches were not taken. This change is one of process, not substance. The focus for firms and individuals should be on complying with both the letter and the spirit of the rules rather than considering ways to circumvent them.”

Andrew Bailey can call it what he likes, but it merely goes to prove what I have said ever since this provision was first introduced, which is that it will never, ever be applied. Regular readers of this blog will recall I have made that point for months and now George, with this small amendment has confirmed my argument, by giving the bankers a ‘Get out of Jail Free’ card!

In order for a banker to be held liable under the new ‘negligence’ provisions, that case had to demonstrate that the banker knew that what was happening to his bank was likely to cause it to collapse, and that he did nothing relevant to prevent it. 

It would have been up to the banker to prove that he did not know the relevant circumstances, but now he doesn’t have to, and of course will simply say nothing. So the entire provision, over which there was so much soul-searching and whingeing, has now been repealed, and the bankers are off the hook once again.

The move was welcomed by the industry. Oliver Parry, senior corporate governance adviser at the Institute of Directors, who maintained;

“The FCA is right to drop the ridiculous ‘reverse burden of proof’ requirements from the Senior Managers Regime. Scandals across the banking industry such as Libor, foreign exchange rate-rigging and PPI misselling have given bankers a toxic name and we support the regulators as they seek to address what went wrong before, during and after the financial crash. 

"This rule, however, which was both unworkable and excessive, was a step too far. It is encouraging to see policymakers heed the advice of the IoD, and others, who raised concerns when the rules were first proposed."

A spokesman for the Treasury said the move would help to “restore trust in Britain’s financial services sector and would ensure that “tough standards of personal responsibility and accountability apply beyond banking and across the entire financial services industry”.

Yes, well only a Treasury burble-speak policy wonk could come out with a piece of gloop like that!

What George has done is to water down yet again the regulatory provisions which were intended to bring a real sense of purpose to the regime of banking supervision. The real problem is that anyone with half an ounce of common sense could see that the proposed provisions put the spotlight of responsibility firmly on the men in the suits, and for the first time, gave prosecutors a chance of bringing these men to justice.

Well, we can’t have that can we? I mean, how could the protected species go about their daily gilded existence, all the time wondering if they were going to be given their just deserts for a change?

No, time to go and have a chat to George, who had already agreed to other changes designed to water down the regulatory process in the name of releasing ‘red tape’!

That is what I mean when I say that George is unwittingly helping members of his class and milieu to facilitate financial crme. George likes bankers because they are nice chaps, and he wants them to help grow the economy. If that means bringing in a lot of dirty money, well as long as no-one rubs his nose in  it, George will more than likely be prepared to turn a blind eye. 

All the time his Treasury officials are telling him that they are working to help to “restore trust in Britain’s financial services sector and ensuring that “tough standards of personal responsibility and accountability apply beyond banking and across the entire financial services industry, well then, no doubt George will believe them!

Good old George!

Monday, October 19, 2015

Money laundering figures prove the banks and the lawyers are still conspiring to subvert the law.

Criminal conduct at Britain’s banks is “a threat to national security” because of the huge damage it will cause to the economy, the head of the country’s top crime-fighting body has warned. 

Keith Bristow, director general of the National Crime Agency, said money laundering by banks and their other well-documented criminal activities risked undermining the “reputation of the UK” and could trigger a sharp fall in the tax revenues generated by the City.

Regular readers of my blogs will know that I have been making these serious allegations for a long time now. I have said repeatedly that the banks and their learned friends in the (il)legal profession, represent a major threat to the well-being of the common weal. I have repeatedly identified organised criminal behaviour as representing a leitmotif for major banks, and they are helped and supported in their dishonest conduct and their criminal actions by their legal advisers. Well, now the Director of the National Crime Agency agrees with me, so all those bent bankers and crooked lawyers who take such delight in criticising my articles and choice of commentaries, can eat their own words.

The NCA assesses that many hundreds of billions of pounds of international criminal money is being actively laundered through UK banks, and their subsidiaries, each year.

The scale of the laundering of these criminal proceeds is now so huge that it is therefore a 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 being laundered into and through the UK, and these figures give the lie to the protestations of the banks that they are doing everything possible to put their discredited houses in order.

Yes, they are spending a vast amount of money hiring staff to work in anti-money laundering and financial crime interdiction roles, but a significant number of these new hires are first-timers who have little or no real experience of dealing with international criminals. And all the time, the dirty money is flooding into these banks, with the open connivance of the lawyers who are willing to provide a wide range of dishonest services for international clients who are willing to pay high fee levels, as long as no awkward questions are asked.

This state of affairs carries a very high level of risk, but sadly, it has needed a very senior police officer to point out that the criminal conduct of the banks poses a strategic threat to the financial interests of this country. There will be many sleek, shiny-faced suits in any number of plush offices who will tut-tut at the temerity of a mere policemen making a public statement of such a nature.

One group of policy-makers who will deeply resent the words of the Director of the NCA will be George Osborne’s advisers in H.M.Treasury. They work for a politician who is only too happy to see vast sums of foreign money coming into London, but like all politicians, George doesn’t want bad news or inconvenient challenges (such as “...is this the kind of money we should be accepting...”) attaching themselves to his enjoyment of the cash flows!

Keith Bristow has warned that “many hundreds of billions of pounds of criminal assets” are being laundered through British financial institutions. ‘I believe the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK.’, These statements have been made as part of an important announcement of details of a landmark information-sharing agreement with banks to tackle illegal activity.

Now, this is going to be a very interesting development in crime fighting, and I fear that it will be doomed to failure in exactly the same way as the money laundering interdiction regime has failed in the UK. 

Why am I so cynical about this?

Because it will depend on the banks playing their part in full, and telling the truth when confronted by a challenging application, and telling the truth isn’t exactly the strong suit for these Mafiosi..

The proposed deal will see 10 of Britain’s biggest banks ‘voluntarily’ hand the NCA details of the accounts and financial transactions of people suspected of money laundering and other serious offences.

HSBC, at the centre of a storm over tax avoidance by clients of a Swiss subsidiary, is understood to be one of those participating. The deal will end decades of secretive practices, during which banks have traditionally refused to hand over account details without a court order.  Both the NCA and the banks expect to face legal challenges as a result, from customers angry that details about their financial dealings have been given to the authorities.

Among other difficulties will be what happens when the client accounts of a major law firm become the subject of an application. Lawyers are among the biggest money laundering facilitators, and they hold significant sums of money on behalf of clients. What is likely to be the outcome when the NCA makes an official demand for the accounts of a major client of one of the ‘magic circle’ law firms?

In my view, the amount of legal argument and process which this scenario is likely to generate, will slow down the investigative process immeasurably
Mr Bristow insisted, however, that the agreement was justified because the scale of money laundering in the City was so large that it posed a threat to the economy and national security.

During an interview he said: “We need the evidence to investigate people and bring them to justice. We have an interest as an agency in the reputation of the UK.

“It’s a national security risk. Hundreds of billions of criminal assets are laundered through UK financial institutions. Given how much our economy depends on financial services in this country, we can ill afford the reputation of those institutions to be damaged or for those institutions to lose their licences to operate because of criminals exploiting their services.

“We rely on the financial services and professional services sector for much of the wealth within our economy, so that is a significant threat to our national security.”

He is too late! Such sentiments might have been true 30 years ago, but frankly speaking, any private investor who puts his trust in the UK financial sector to look after his best interests is going to be royally screwed. You don’t believe me – just ask any of the members of SME Alliance Ltd and learn from their horror stories of the ways in which major UK banks saw them as sacrificial lambs, to be led to the slaughter. 

Mr Bristow, rather sweetly in my view, said the banks would benefit from the detection of criminal activity that would otherwise put their future in jeopardy, and insisted that only those suspected of serious criminality would be targeted.

He added: “We are not cheerleaders for the banks, but they deserve credit for taking some risk to help us target these people. It’s a genuine change through an information-sharing partnership that will give us opportunities that we would otherwise not have had.” 

Don’t be too ready to praise these crooked institutions yet Keith, wait for a couple of years and see how well the system is working! Suspend any cheerleading for British banks until you see some genuine change in their criminal behaviour!

The information-sharing agreement follows a meeting last year between Home Secretary Theresa May, the British Bankers’ Association, the Financial Conduct Authority and the NCA.

It will operate as a pilot scheme for a year, beginning this month, and will be expanded to include further banks if successful.

Each participating institution has agreed to pass on account information whenever the NCA signals that it has received a “suspicious activity” report from another institution about a customer’s financial dealings. The aim is to ensure that a person suspected of money laundering at one bank is not able to carry out similar activity elsewhere undetected.

The legal powers governing the new system are contained in section 7 of the 2013 Crime and Courts Act. It gives the banks and other organisations the legal right to disclose otherwise confidential information to the NCA to help it carry out its tasks. These include fighting economic and cyber crime, trafficking of people and drugs, and other forms of organised crime.

The NCA said it was necessary to focus on tackling criminal activity carried out through banks because the British banking sector was responsible for generating eight per cent of the country’s GDP, and 12 per cent of tax receipts.

The 10 institutions taking part include high street retail and investment banks. Their names are not being disclosed by the NCA because of concern that their cooperation with law enforcers could put them at a commercial disadvantage.

We are not told what will be the outcome when a bank hands over information requested by NCA, and where the information, upon investigation, proves that the bank concerned has been routinely ignoring suspicious transaction activity for a long time, thus effectively laundering the proceeds. Will this knowledge in turn trigger the kind of investigation and prosecution it properly should?

This is another reason why I say the banks concerned will have to be trusted to tell the truth about the transactions being requested, and I, for one, do not trust these specific banking institutions any further than I could spit them!

I am very grateful to Keith Bristow for making these observations and pointing out that the volume of criminal money passing through the banking institutions represents a major threat to the UK economy.

His intervention means that the politicians and the civil servants have now got to start taking the issue seriously, and realising that the issue of the criminal handling of all this criminal money, as well as the dishonesty of the banking institutions, has now become an important electoral issue.

The Tory government is deliberately and cynically dismantling a whole raft of financial regulations demanded by their banking friends in the City. They are using the excuse that they merely are removing red tape restrictions which they say are holding back British business, but in reality, this exercise in de-regulation is intended to make it easier for their light-fingered friends in the financial sector to accept more and more criminal money which is finding a temporary home in the City of London.

How do I know this?

Well, the Sunday Times reported on 18th October that that well-known laundering bank which likes to say ‘Yes’ to foreign drug money, HSBC, has decided to stay in the UK after all, instead of decamping to Hong Kong.

“...HSBC is leaning towards remaining in Britain after a number of victories in its battle to water down regulatory curbs on the banking industry. 

A series of recent government U-turns, including changes to the bank levy, mean it is more likely to keep its headquarters in London at the end of the year, according to shareholders and senior insiders. 

Chief executive Stuart Gulliver has secured “pretty much everything he wanted out of the government”, a high-level source said. And a top 10 shareholder said it was “more than likely that the bank will remain in the UK when the domicile review is completed”.

That would mark a substantial victory for George Osborne. The chancellor has been scrambling to convince HSBC and fellow FTSE 100 emerging markets lender Standard Chartered to retain their headquarters in London...”

Well I don’t know much about a victory for George Osborne, it seems to me that he has bowed down completely and abjectly to the pathetic empty threats of Stuart Gulliver and his Ton-Ton Macoute bully-boys!

Remember, this is the bank which was held out to dry by the US authorities for its part in a massive criminal money laundering case.

HSBC Holdings Plc’s $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge.

 “A pending criminal case is not window dressing” the judge wrote, noting that the case was filed and would remain pending for five years under the agreement. “By placing a criminal matter on the docket of a federal court, the parties have subjected their DPA to the legitimate exercise of the court’s authority.”

Lack of proper controls allowed the Sinaloa drug cartel in Mexico and the Norte del Valle cartel in Colombia to move more than $881 million through HSBC’s U.S. unit from 2006 to 2010, the government alleged in the case. The bank also cut resources for its anti-money-laundering programs to “cut costs and increase profits,” the government said in court filings...”

This is the banking institution that George Osborne wants to keep here in London, and for which he is prepared to feather-bed the regulatory requirements. You must decide whether this demonstrates George Osborne’s commitment to money laundering preventions!

HSBC threatened to move its domicile out of the UK, because of the tough regulatory regime it was being forced to operate within. As a result, Osborne has turned himself inside out to slash the bank levy and watered down the ring-fence rules that demand that banks segregate their retail arms from their investment side.

Now, you read it here in this blog months ago my prediction that HSBC and its dodgy overpaid executives would never leave the UK, because life was too easy for them here. And I was right, and it just got easier! 

As important is the fact that the Bank of England has dropped a proposed rule to require executives at failed banks to prove they did all they could to prevent a collapse.

In one move, they have rendered the regime which would have helped to ensure the  imprisonment of executives of failed banking institutions, null and void. In future reckless bankers whose institutions fail, like Fred the Shred at HSBC will no longer face the possibility of imprisonment for their criminal recklessness. Once again, the protected species are off the hook.

The Sunday Times reports that the final decision is still awaited, and that Gulliver still hopes to squeeze more concessions out of H.M.Treasury. Well, nothing would surprise me, so watch this space.

Looks like the money laundering possibilities just got better for British bankers. Dig in boys, fill your boots, just remember to remit George his share, but remember, just because it is paid through the tax-man, doesn’t make it any more legitimate. These monies are still the proceeds of crime!