May 8, 2021

Here are the top 10 countries where British criminals launder their money

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rtr3mkkv-1.jpg copyBy Oscar Williams-Grut From Business Insider

Paramilitary policemen take off U.S. dollars strapped around a man’s legs, at the border of Hong Kong and Shenzhen, Guangdong province, April 24, 2014. According to local media, the man was found trying to smuggle in total US$580,000 from the mainland to Hong Kong. Picture taken April 24, 2014.REUTERS/China Dail

If a criminal wants to enjoy their illegally acquired wealth, they first have to “launder” the money — creating a fake paper trail to disguise where they got it from.

Often people will take money abroad to do this, hoping that the cross-border aspect will make it harder to trace. A recent report from the UK government identified the top 10 countries British criminals turn to when they want to clean their cash, based on 5 years worth of criminal assets recovered from abroad.

The combined criminal assets recovered are worth over £600 million but the Treasury says: “The true figure will be significantly higher, as this figure only includes identified assets linked to offenders who have been convicted and had a confiscation order made against them. It does not take account of any assets linked to offenders who have escaped detection or conviction.”

Check out the hot money hotspots below.

10. Nigeria10-nigeria
REUTERS/Akintunde Akinleye
A money dealer counts the Nigerian naira on a machine in his office in the commercial capital of Lagos, January 13, 2009.
Nigeria ranked 136 out of 174 on Transparency International’s latest Corruption Perception Index. Corruption, particularly in government, has long been a problem in the country. Nigeria’s former minister of petroleum was recently arrested in London on charges of money laundering.

9. Isle of Man9-isle-of-man
REUTERS/Nigel Roddis
Motorcyclists ride their bikes on the roads at at Creg-ny-Baa during ‘Mad Sunday’ at the TT meeting, on the Isle of Man June 7, 2009.
The Isle of Man is well known as a tax haven — with 0% corporation tax and 20% income tax — but it’s also a money laundering hotspot too it seems. Seven people were arrested earlier this year across the Isle of Man, the UK, and Guernsey, suspected of a £21 million money laundering fraud.

8. British Virgin Islands8-british-virgin-islands
Tahesia Harrigan of the British Virgin Islands reacts after the women’s 200 metres quarter-final heats at the 11th IAAF World Athletics Championship in Osaka August 29, 2007.
One of the UK’s four overseas Asset Recovery Advisors — officials tasked with recovering proceeds of crime — is posted to cover the Carribean. Most of his time is likely spent dealing with the British Virgin Islands. The country is another tax haven known for the huge number of offshore companies legally based there. Disclosure is also limited, which has made some banks reluctant to deal with companies registered there.

7. Cyprus7-cyprus
REUTERS/Yannis Behrakis
A depositor waits to enter a Laiki Bank branch in Nicosia, Cyprus, March 28, 2013.
Cyprus is also known for its relatively lax fincial system. An EU-commissioned report in 2013 damned the island’s money laundering checks and earlier this year The Independent claimed that: “Russians have deposited millions of dollars in cash in the Mediterranean island of Cyprus in what local bankers suspect has been a giant scheme to launder the profits of covert Middle East arms sales and the proceeds of Moscow’s mafia.”

6. Hong Kong6-hong-kong
REUTERS/Bobby Yip 2015
A general view of the financial Central district in Hong Kong.
Hong Kong is an Asian finance hotspot.

The South China Morning Post reported last month: “The number of serious fraud cases involving money laundering in Hong Kong has soared, police revealed, as syndicates increasingly recruit non-locals to clean their dirty cash.

“There were nine laundering cases in the first half of this year alone, involving around HK$456 million. Yet in the whole of last year, there were only four cases, with about HK$245 million laundered.”

5. Liechtenstein5-liechtenstein
REUTERS/Christian Hartmann
A general view of the Liechtenstein’s castle in Vaduz March 15, 2009.
Like many of the countries on the list, Liechtenstein was traditionally seen as a tax haven and finance is one of the biggest industries in the tiny, land-locked country.

Liechtenstein was criticised for lax financial controls in two reports released in 2000 and the BBC says: “The reports said that the Liechtenstein banking system enabled gangs from Russia, Italy and Colombia to launder money from their criminal activities.”

Since then Liechtenstein has moved to reform its banking system, easing secrecy laws, and struck deals with countries including the UK that make recovering stolen or illegally bought assets easier.

4. Spain4-spain.jpg
Tourists at a beach in Benalmadena, near Malaga, southern Spain.
Spain has traditionally been the location of choice for British gangsters looking to retire in the sun. But the government has long since cottoned on to this and the report says the UK has done deals to “make Spain a more hostile place for UK criminals.”

The UK has had an Asset Recovery Advisor (ARA) posted permanently in Spain since last year and over £1 million has been confiscated since then.

3. Switzerland3-switzerland
REUTERS/Denis Balibouse
A trunk dumps a pile of Swiss francs.
The secrecy of Switzerland’s banking system is legendary, but that leaves it open to abuse by criminals who don’t want their money to be traced. The country recently announced tougher anti-money laundering rules, with the Swiss Banking Association saying: “The fight against money laundering and terrorist financing are central issues for the Swiss financial centre.”

2. Pakistan2-pakistan.jpg
REUTERS/Athar Hussain
A bank employee, with her hands stained by henna, displays 10 Pakistani Rupees ($ 0.1) coins for a photograph in Karachi October 1, 2009.
Pakistan is a hotspot for terrorist financing, as well as money laundering, with lots of undeclared cash passing through the country. The government’s report says of countries like Pakistan: “A lack of strong governance, weak regulations, an absence of the rule of law, lack of financial investigation legislation or capacity, a lack of genuine partnership working in certain countries all provide additional challenges.”

1. United Arab Emirates1-united-arab-emirates
REUTERS/Mohammed Salem
A general view of the Dubai skyline shows the Burj Khalifa building March 25, 2010.
Like Spain, the government has a dedicated Asset Recovery Advisor stationed in UAE and has also negotiated asset-sharing agreements with the country to help detection and action.

Like Switzerland, Hong Kong, and Liechtenstein, the financial clout of the UAE in the Middle East makes it a target for money launders. The CIA’s World Factbook entry for the country notes: “The UAE’s position as a major financial center makes it vulnerable to money laundering; anti-money-laundering controls improving, but informal banking remains unregulated.”

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EDITOR: How many readers thought Cayman Islands would make the list?

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