UK lawmakers are launching a formal investigation into “deeply worrying” issues raised by the FinCEN files. This global money laundering investigation is based on documents provided by BuzzFeed News to the International Consortium of Investigative Journalists.
The investigation revealed how the giants of Western banking are handling suspicious transactions worth billions of dollars, enriching themselves and their shareholders, while facilitating the actions of terrorists, kleptocrats and drug queens.
The documents contained many revelations about the UK financial system and some of its largest banks, including HSBC, Standard Chartered and Barclays. Money launderers often use UK shell companies to move their money, thanks to the country’s lax company formation laws. The UK’s problems are so extensive that a secret report from the US government described the country as a higher risk money laundering jurisdiction.
Parliament’s finance committee announced the investigation on Friday just after midnight local time.
Mel Stride, the committee’s Conservative chairman, said the investigation will examine what progress state regulators and law enforcement have made in preventing money laundering.
“It is important that the relevant authorities are held accountable and effectively scrutinized to ensure that the UK is a clean place to do business,” he wrote in a statement. British parliamentary inquiries usually collect evidence both in writing and orally, much of which is made public before a final report is published.
When the investigation into FinCEN’s files first became known in September, Stride said the results were “deeply worrying” and sent a series of questions to key government agencies. Stride released the agencies’ formal responses to these letters on Thursday.
The Financial Conduct Authority, which oversees banks operating in the UK, said it had written to all banks cited on FinCEN’s files to request more information and said that in the event of “serious suspicions of misconduct” it would open its own Investigations.
James Brokenshire, the government’s secretary of security, wrote in a response to Stride that the Home Office and the National Economic Crime Center “are carefully reviewing the allegations in FinCEN’s files” to “see what else should be done.”
The investigation into the FinCEN files was based on thousands of reports of “suspicious activity” sent by banks to the Financial Crimes Enforcement Network, the US government agency charged with preventing money laundering.
When asked whether the FinCEN files resulted in banks filing fewer SARs, Brokenshire replied that law enforcement “have raised no concerns about filing suspicious activity reports”. In the week following publication, “SARs continued to be filed at or above their normal rate.”
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