Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back

EVENT TRANSCRIPT: Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back

DATE: 15th October, 12:00- 13:00

VENUE: Committee Room 11, House of Commons

London, SW1A 0AA United Kingdom

SPEAKER: Oliver Bullough

Ava Lee

Peter Pomerantsev



Tom Brake MP: Right ladies and gentlemen…we are starting a few minutes late. I thought given the queue it was worth letting the late arrivals arrive. So, welcome to committee room 11. I am Tom Brake and it’s my pleasure to host the event today. I am the MP for Carshalton and Wallington and libdem Brexit spokesman. I am not sure whether we will be debating Brexit today…maybe work its way in..but…we are very lucky to have a very expert panel here who are going to speak to us about Moneyland or why thieves and crooks now rule the world and how to take it back. Well, maybe there is a Brexit angle to it after all…

(everyone laughs)

On my left, we have Oliver Bullough who is an award winning investigative journalist and whose book is titled Moneyland. On my right, Ava Lee who is an anti-corruption campaigner at Global Witness and on my far right is Peter Pomerantsev who is a Soviet born British Journalist who coined the term Post-Modern dictatorship to describe Putin’s regime. So perhaps before I ask Oliver to kick off, clearly these are the issues that are getting greater and greater resonance in the UK at present. Particularly, issues to do with how do we fund Public Service effectively when a large amount of money has been siphoned away in far off places…or not so far off…in terms of Moneyland which I think Oliver says is the third richest country in the world according to his book. So, and…I mentioned Brexit just in passing but it may well be that some of these issues. People’s happiness with the way some elites are succeeding with lining their pockets very generously may have also contributed to the result that we saw here two and a half years ago. Without further ado, I will ask Oliver to speak. He will speak for 15 minutes and then Ava and Peter for further 10 minutes each. Then we would have limited amount of time for questions which I will enforce very strictly in terms of expecting people to ask questions and not make their own extensive contributions to today’s event. Over to you

Oliver Bullough: Thanks Tom, thanks everyone for coming…for giving up your time to listen about crooks and thieves and why they rule the world. This book came out about a month ago and I have been speaking at a number of literary festivals and so on. It’s got a sobering subject. The idea that in the west in general and in the UK in particular we have essentially created a system whereby the most unscrupulous people in the world can steal as much money as they like and never have to give it back. It’s a bit depressing when you put it like that. So, normally when I talk to a general crowd, I try to level it with a few jokes about you know excessive consumption and their dreadful children and their appalling Instagram accounts. But we are in the Parliament so I bet you guys can take it…so I am going to be a bit more sobering and depressing today. I thought I would start by telling a story of a little girl in Ukraine called Nona and her mother called Nina. I met them while making a documentary about corruption in Ukraine…which we never showed thanks to the tension in some UK Libel lawyers which is possibly something we can get to later. Lola is now 8; she has haemophilia which is a condition that your blood does not clot if you get a cut or a bruise- it can bleed uncontrollably and you require an injection as a clotting factor. It is now a very easy condition to treat but in Ukraine, particularly directly after the Revolution…before the revolution the health system had been so looted by the government…by insiders in and around the health ministry that there was no money to provide medicines when lifesaving crucial medicines for conditions life haemophilia. So instead of having regular injections to keep the condition under control, Nona and Neenah would sleep next to each other in bed. Nina had trained herself to recognise the smell of blood and if her daughter were to bleed in the night, she would wake up bundle her in the car…drive to the hospital and hope. When she got there was …factor to stop the bleed once it had already started. This is not an ideal way of dealing with haemophilia. To put it mildly, it is a bad way. But it was the only way there was. To be fair, they were very good natured about it. Nona was an absolutely adorable girl…they had a swing in the hallway because she could not really play in playgrounds because it was obviously very vulnerable. She used to swing all the time while I was interviewing her she would insist on being interviewed on the swing. It’s an unideal way of interviewing anyone, but it is also very sweet. Where was the money? This is the question I was interested in Ukraine…and I think most Ukrainians were interested in this where was the money that had been stolen from the health ministry and hidden somewhere…anywhere… Clearly, it was not in Ukraine…Ukrainian hospitals are in ramshackle and in a bit of a mess. Ukrainian doctors have to sort of take bribes just to perform even the basic interventions. In fact, the money had been hidden in this offshore place I call Moneyland which is this country whose citizenship is available only to those rich enough to be able to afford it and unscrupulous enough to want it. Lot of the money goes to places like Cyprus, or Latvia and once it is there it vanishes. It goes elsewhere and then disappears offshore where the rest of us can’t trace it. There was a very interesting news story last month if you may have seen it. The money laundering scam at Danske Bank I Estonia…probably the biggest money laundering scandal …to put it into perspective this was a 200-billion-euro money laundering scandal. The HSBC Mexican drug money laundering sandal which in itself was a massive scandal but 250 times smaller the Estonian money laundering scam is unimaginably huge. It’s been connected in the media reports quite naturally with Russia, with Putin and one of Putin’s uncles was involved…owned one of the bank accounts but actually it was draining money …this Danish bank…not just from Russia but from all of the former Soviet Union long as there are crooked people to hide money… it was being drained to Danske Bank in Estonia. What’s interesting about this I think from the perspective of us here in this room…and broadly in this country…if you look at the nationality of account holders in Danske Bank in Estonia…the single biggest group of account holders were not Russians or Ukrainians or Kazaks or Azeris…or in fact anyone from the former Soviet Union. They were British. They were British people…you are British there is little reason to have a non-resident account even at a Danish Bank in Tallinn. These were British corporate structures, overwhelmingly limited liability partnerships and Scottish liability partnerships which are ill designed corporate structures to make it very very easy to obscure your identity if you have an SLP or an LLP and you own it, not in your own name but in the name of an offshore company perhaps in Belize ..somewhere like that then you have bought yourself an offshore vehicle as impenetrable as any in the world but one that looks like a British investor…one that looks legitimate. Because the interest to anyone who has stolen money, particularly stolen money in very large quantities sufficient enough to afford the best protection money can buy…Moneyland in short. Your interest is to make sure no one knows you have done it. You want to be able to hide your money. You steal it, you hide it and once you have hidden it you can spend it to your hearts content. So instead of spending it on clotting factor for Nona you can spend it on houses, yachts, fine art…whatever you wish to spend it on. This is what anonymous structures like these do and in Britain we are deeply deeply complacent in the provision of them. This is not a secret…journalists, particularly initially from private eye. Now more broadly…The Herald in Scotland has done excellent work on exposing SLPs …the Guardian who I write for, and The Observer and other newspapers as well have done really good work in exposing the misuse of British corporate structures to loan the money out of the former Soviet Union and elsewhere, and essentially to allow banks in places like Tallinn and Riga and Vilnius and Nicosia to pretend they don’t know what they are doing. So “we didn’t know it was an ex-Soviet crook, we thought it was a British bill proposed by!” The plausible deniability that it allows them has been provided for to them by the UK. Why don’t we do anything about this? Well, the reason we don’t do anything about this was discussed in March in the House when there was an amendment to the sanctions and money laundering bill proposed by Labour, proposed by Annaliese Dodd who is in the Shadow Treasury Team. John Glenn, a treasury minister answered for the government and the quote that he used…this is why it won’t be worthwhile to essentially set up company’s house, so it checks who really owns companies. At the moment if you set up a company or company’s house you do have to say who you are…you have to say who the actual owner is …we call it the PSC the Person of Significant Control. But no one checks the information. So if you are an ex-Soviet Crook, there is no reason why you would tell the truth. You could just say it is owned by an invented person in Karaganda in Kazakhstan, or an invented person anywhere in the world. No one is going to check the information you provide. That…our failure to check is what allows these LLPs and SSPs to be used because essentially that is what makes them become an anonymous vehicle. So John Glenn speaking for the Government…his comment was and I quote…the impact on resources to carry out due diligence on that number of companies would be considerable, the overall cost to the UK economy could run into hundreds of millions of pounds each year. That is why we don’t impose checks on companies that register at companies’ house because that would be too expensive for us to do so. I think this is an argument that we really need to tackle head on and overcome. The cost to the UK might be in hundreds of millions of dollars of doing something but the cost of not doing something is just from one bank alone in Estonia…hundreds of billions…a thousand times bigger. And the cost to someone like Nona who is having the money stolen that should be paid for absolutely vital medicine that she needs every day is incalculable…How do you calculate the cost of not getting clotting factor as a little girl with haemophilia? That is the issue that I find incredibly frustrating that it is not understood in Britain in particular that we could very easily solve or sort out our involvement in this particular part of creation of Moneyland. It is stroke. I mean essentially the government had accepted Labour’s amendment in March, that problem would be solved. But they did not because they said it would cost us too much money.I think this is a moral disgrace and really something we should be doong about. Thank you very much for listening.

Tom Brake MP: Thank you very much Oliver and um…for keeping well within time but also for highlighting the UK’s involvement. We can’t absolve ourselves off responsibility- that issue of companies’ house as I understand it… people who register companies through some of the private companies that provide registration facilities do actually have to go through that vetting whereas when it goes through companies’ house, you don’t.

Oliver Bullough: If you register a company via a British registered company formation agent, you go through a vetting process. If you register it yourself or you register it via a non-British agent, the system as it stands is an active barrier against our own companies from competing on a level playing field. It could not be worse designed.

Tom Brake MP: As I said, the UK can and should take action. Perhaps one would hope following the attempted assassination of Skirpals, there may be some action coming in relation to some of the things that you have flagged up as a priority for the UK Government. I will now ask Ava to speak.

Ava Lee: Thank you! So as Tom mentioned, I campaigned against corruption at Global Witness. So basically if you are not familiar with us, we are an NGO that seeks to break the links between corruption and human rights abuses, environmental damage and conflict. You could say that the work that we do on corruption looks at the entry points between our world and Moneyland. We try and get in the way. We make it harder for the bad guys to get to Moneyland and stick their money there (inaudible). With a broad coalition which includes organisations like Transparency International, RUSI and journalists like Oliver, we have done a relatively good job in the last few years. As Oliver spoke to anonymous companies in the UK…I would like to start there as well. I would like all of you to imagine for a moment that you are an Oligarch or a kleptocrat or you could be a drug dealer…whatever you want. The main point is that you have got a lot of money that you want to hide. It might be profits from drug trafficking, (inaudible)…you hide that money offshore. Like a Russian Doll, you set up one company that owns another company that owns another company that owns another company until it becomes practically impossible for anyone to work out that you are really behind it. One that’s set up, you could use that company to open bank accounts oversees, and ultimately move your money around so it looks clean- completely unconnected to you and the way you got it. Then you get to spend it on whatever you want. These anonymous companies are not just a way in to the offshore world. They are a framework on which it exists. So we campaign to end them. And somewhat surprisingly, the UK has been at the forefront of this fight to some degree. In 2016, the government introduced the first ever public register of the owners of companies, it’s called the PSC register as mentioned or the (inaudible) register…we don’t always have the best acronyms (inaudible). But the government really has set up the bar quite high in making this register open data. That means that organisations such as Global Witness and investigative journalists and government can actually use the information in the register to follow the money in corruption investigations. And we can also work out how people use and abuse (inaudible) companies at a macro level. So (inaudible) did just that. We run scripts looking for suspicious behaviour and we compared it without a data sets like sanctions lists and data on MPs declared interest. And we were able to build an unprecedented picture of UK companies and their owners. Unfortunately, what we found was not great: our list exposed that there thousands of companies filing highly suspicious entries or breaking the laws, but no one is really doing something to stop them. For example, we found four thousand official owners. So these are the real people posed as owners of these companies but they are under the age of 2. One of them was not even born yet. Now it is really really easy to set up a UK company- it’s a matter of minutes for exercising effective control (inaudible) seems (inaudible). We also discovered that over 40% of beneficial owners (inaudible) partnerships which are these archaic Scottish Legal entities either come from a former soviet company or a company incorporated there. That’s 40% compared to just 0.1% of all limited companies which we found pretty concerning. And then no one is really looking into this. So there are two big problems with the UK (inaudible) register right now. One, as I said the government is just accepting the information at face value, even when that information is completely mad and two, companies house, who collect this information don’t have the resources or the mandate to police the register. There are different reports on exactly how many people have the job to make sure that the information in the register is correct. Reports range from about 6 to 200. But some of my colleagues who like to go to Cardiff to spend a day at Companies House say that it is at the lower end of that range for sure. So that is a small handful of people supposedly keeping check on more than 4 million companies. But it’s not all been bad news: interestingly, Scottish liability partnership were going to be included in this register, they were going to remain in secrecy. When it was announced that they would be, the rates of incorporation dropped by 80% from its peak So that shows that transparency in itself works in the way that we hoped it would. It tells the criminal and the corrupt that their money and their business is not welcome in the UK. The government now has to follow through and make the most of what has already been a really big step towards UK companies. But next, I would like to talk about property and London property in particular. As I said in the beginning, if you are oligarch, you can use an anonymous company to buy property. London property is particularly appealing because it costs so much money, it has this feeling of legitimacy about it and there are really expensive and good private schools you can send your children to. Now the UK does not offer anonymous companies like it used to- as I said you have to register the real owner. So you probably want to get that company offshore…somewhere like the British Virgin Islands and people have been doing that in masses. We looked at the land registry data and discovered that an incredible 86000 properties were owned offshore. That landmass is bigger than greater London. Lots of them arrive here (inaudible. Westminster alone has the most secret (inaudible) properties in the whole of the UK with over 10000 properties owned secretly just in Westminster. (inaudible) Since 2015, the London Borough of Tower Hamlets which is also the Borough with highest rates of child poverty saw an increase in 11% of secretly owned properties there. And outside of London, Greater Manchester has seen a 10% increase. Three years ago, the government promised to introduce a government register of real owners of UK properties to fix this problem, but it still doesn’t exist. Right now (inaudible) in 2020 but that’s far away. We have known this problem for a really long time and everything is in place to start fixing it and the government is just (inaudible). Lastly, I would like to talk about the tax havens. Earlier last year the UK government did something amazing- the same sanctions on money laundering bill that Oliver was speaking about contains another amendment which meant that the UK announced that its oversees (inaudible) like the British Virgin Island and the Cayman Island will have to open up and make sure that these public registers (inaudible) the companies there. Like we have in the UK. Now it’s a big deal to introduce this register, but like I said its first of its kind and its global standard. But the tax havens are where the really scary stuff goes down- destinations where mafia, and mobsters and oligarchs want to slip in their money looted. If you remember the Panama Paper Scandal back in 2016, the one that forced the Icelandic Prime Minister to resign and brought down (inaudible), over half of those companies were registered in the UK’s overseas directories. So having that (inaudible) would really change the global landscape and make it much much harder for criminals to profit off crimes. There are some of these cases that have got their entire economies (inaudible) so they are going to bite back. And the government needs to stay really strong and support them (inaudible) new economies that don’t profit from other nations getting plundered. And the government also needs to go a bit further: when we talk about the UK’s tax havens, we mean overseas territories and the crown dependencies which is places like Jersey and Isle of Man. Right now,  this ruling only applies to the overseas territories which is missing a trick: the Crown Dependencies have a massive problem too. You might have heard about the most expensive property in the UK last week. Its 1, Hyde Park and it was sold for a 160 million pounds which comes with two wine cellars and 24 hour room service from the Mandarin Oriental Hotel. Nick Candy of Candy Brothers fame sold this property to two anonymous companies. So the most expensive property in the UK right now is owned by secret companies that are registered in the UK’s crown dependencies.  Nick Candy later revealed that he had in fact sold this property to himself, – but he didn’t have to do that. Most of the people invested in this are simply not going to. So to recap there is some really amazing work that has gone at policy level on these issues- but right now, there is a lot more that the government needs to do. One, it needs to clean up UK companies. Two, bring transparency to the property market. Three, follow through with opening up all of the UK’s Tax havens and then maybe we can make Oliver’s book really really dated…

(everyone laughs)

(inaudible) snapshot into a really embarrassing part of our history.


Thank you very much. Oliver (inaudible) sells more books first. Can I just say everyone needs to stop thinking of themselves as an oligarch now that you have finished your presentation You have set out the scale of the problem…you said 4000 beneficial owners were under the age of 2. That is an interesting fact but also cessing out the paucity of the resources to try and tackle that in terms of company house.

Oliver Bullough: What I found last week…Mrs Natasha Brown who is 3 months old and yet mysteriously in her three months’ time on earth…not only has she managed to set up a company but also get married…

(everyone laughs)

Tom Brake MP: I have also been told that Mickey Mouse now owns a company house…

Oliver Bullough: Stalin was at one point…and Osama bin Laden was at one point. I don’t think actually…just someone is having a laugh. I had a company called Crooked Crook Crook Limited that I created in 13 minutes

Tom Brake MP: Wow. And that illustrates some of the problems we are up against in terms of trying to police this…we are very fortunate to have Peter. I am not sure whether his experience of Russia sort of in the 2000s was (inaudible) style. But some of the descriptions I have seen of your books say that it was exactly like that. So I look forward to hearing Peter.

Peter Pomerantsev: Thank you very much for having me. My specialisation isn’t actually quite corruption…I run a centre at the London School of Economics where we look at contemporary propaganda and how to go about it – Russian but not only. Actually I find these two deeply deeply intertwined, especially when we think about (inaudible). So (inaudible), I used to live in Russia in 2000s and you know…we would meet documentary makers among other things. And we would meet Russian dissidents- new generation of Russian dissidents. You know we were from London and wed be very proud (inaudible) and we would say how can we help you, oh Russian dissent? The way we helped (inaudible) and the way we helped Berezovsky. (inaudible) We are from London…the beacon in the West. And they would go “Oh you are from London, are you?”

(everyone laughs)

“You are the problem. They steal the money here and they put it over there. You are not the beacon anymore; you are the problem.” They say, “there is one thing you can do- stop this system which allows people (inaudible) take the money, take it away and invest it here with absolute impunity… (inaudible)…impoverishing our country”

Now there is a huge narrative who’s (inaudible). It’s not just the technology of this which would explain (inaudible). There is a huge psychological (inaudible). We always used to say. “Ah! We have a different model of higher values” and they say, “No! they are just as corrupt as us”. If you look at all the Russian propaganda, there is always one message – there is no alternative to Putin, there is no alternative to some sort of messy kleptocracy…” over there is the same as over here…there are no morals- it’s hypocrisy. The whole thing was a (inaudible) and now we have seen the truth. Every time, the money is taken out of a hospital and invested in an apartment in Knightsbridge-  that shows that the west is corrupt. There is no alternative to me – there is nowhere for Ukraine to go, there is nowhere for Moldova to go. There is no alternative. There is no future. Democracy is a sham”- so it is also a huge narrative win. Moreover, it becomes a huge foreign policy mechanism to spread influence. We are all thinking about the deep ideas behind the new nationalist populists- Brexit. More obviously (inaudible)- all these countries all these leaders talk about a white Christian Europe (inaudible) but actually what connects them is a very strange dark web of corruption whether that is central Europe or in southern Europe. We see that same pattern emerge over and over again- we don’t know whether it has touched Britain- I hope you find out (inaudible). The propaganda that they use is really to cover up webs of corruption- huge Moneyland (inaudible). And that is how Putin is spreading his influence in Central Europe and increasingly in southern Europe. That is depressing situation but if you think about it you see how weak they are- they are in a classic (inaudible) situation. They are using the narrative of – oh the international community is bad…globalisation is bad. The EU is bad – but there is dependence with the international globalised financial system. So, actually even though they have managed to make massive gains and made a dark model out of globalisation, are they vulnerable as well? How can we start finding those channels on which they are heavily dependent and start hitting them where it hurts? I spent a lot of time at my think tank in LSE thinking about how do we counter Kremlin propaganda? The best thing we can do is to ignore it and hit where it hurts. We saw how things went up in Kremlin after the Panama papers reveal when Putin’s friends were revealed to be holding billions and billions of pounds in offshore zones in Latin America and Central America. So there is hope. Ukraine- Ukraine wants to be like the west, there is a dependence on the west- that is an ideal leverage to pressure on. And I see this new coalition forming, very strange coalition which I find kind of like cold war warriors still fighting the Russian empire- Left wing crusaders for social and economic justice, moral capitalists (inaudible) by the distortion this form of a system imposes on the market and they are coming together to come up with very very powerful ideas about how to counter this problem which is also a foreign policy problem. That is very encouraging but it also comes with a slight danger. The worst thing that can happen now is that (inaudible) does great research and then nothing changes. There is nothing actually more (inaudible) to the Putin’s of this world if we can reveal everything that they do and they can continue doing with impunity. That will be the final blow to idea that there is no alternative to Putin (inaudible). So really it is up to this house to start not just revealing these schemes but also tp punish them.


Tom Brake MP: Right. Thank you very much Peter…

Oliver Bullough: Something I wanted to mention earlier but forgot. You mentioned that Moneyland is the third largest economy in the world. This is a calculation based on the work of Gabriel Zukmen who works at the Univeristy of California who looks at the amount of money that is hidden offshore that you can see and normally is in investment and trade flow data because you can see essentially where money vanishes because it goes into one place but never emerges from the other side of the black box. And in his calculation between 8-10% of all money in the world is offshore in Moneyland which makes it after America and China, no.3. Its growing all the time. Estimates that look at trade statistics to try and work out illicit financial flows claim that more than a trillion dollars is being stolen every year from the world’s poorest countries and stashed in places like this. A trillion is one of those numbers that sounds like it might be a bit bigger than a million- it is a million times bigger than a million. If you were to count a trillion dollars, you count one bill a second it would take you about 35000 years. It’s a really massive amount of years All of that money is stacked some here and the longer we don’t do anything about it, (inaudible).

Tom Brake MP: Thank you. So I think what has really been consistent from all our speakers is the UK’s central role in the aspects of this and that there is an ongoing process of identifying the UK government’s role which then needs to be responded to by the UK government and parliamentarians like me and (inaudible) at the very least, a significant time lag between identification of the problem and solutions merging certainly from a legislative point of view. But as Peter highlighted, perhaps the very nature of international transactions, there is certain level of vulnerability in terms of international institutions’ ability to respond to. And tackle those problems. So now we are in the fortunate position of having twenty minutes in which people- so you are allowed to say who you are and then you go straight into the question. Gentleman in the white shirt…

Question: (inaudible) Couple of points. So first about, Britain’s role adds to a (inaudible) that we need (inaudible). First of all, anyone wanting to set up (inaudible) structures, using British offshore jurisdictions will almost invariably use a trust and in many years Britain has opposed inclusion of trusts in transparency regimes, we are still doing this. And no matter how far (inaudible) a company’s registry (inaudible) (inaudible). So trust must be a part of transparency operations, I must also say as far as I am concerned and many investigators are concerned, the current regime which sets (inaudible) (inaudible). So that is not good enough. We need to have full transparency of (inaudible).

Tom Brake MP: We will take a couple of questions and then ask the panel to respond. My entreaty for short question was not quite heard at the beginning there and I am sure it will be afterwards. Gentleman there…

Question: Thank you very much. (inaudible)What efforts are being made to deal with any likely displacement of corrupt money from ex-Soviet states? How did you (inaudible) to Cyprus with Russian air force bases, Malta and the sovereign (inaudible) like Seychelles and Mauritius. Thank you. (inaudible)

Question: I read recently that Oligarchs wish to go back to Russia? Is that true or is it just maskerovka?

Tom Brake MP: Okay so…I think we have about 5 questions. So who would like to…Oliver

Oliver Bullough: Okay so, this is good tribute to John as well. John who is probably responsible more than anyone for highlighting the dangers that tax havens do. If you haven’t read the book he has worked on ‘treasure island’, I would highly recommend it…its brilliant. Trust is…You are absolutely right. Particularly about Marshall Islands…I was talking to a federal investigator from Florida who was despairing about the Marshall Islands. He said 20 years ago, if you had to go to set up a trust at Marshall Islands, you had to go there and do it- now you can do it online from Miami. And Marshall island trust has never been broken. It’s a locked box and its amazing.  Transparency in trust is included in the EU’s 5th anti money laundering directorate not transparency for everyone but transparency for law enforcement which is a real advance and a step forward and gaping to the higher B word, it’s really important that after Brexit we keep signing to these money laundering rules- because any divergence whether we become stricter or less strict, it’s always the mismatch that causes loopholes and that’s where Moneyland is born- mismatches between jurisdictions. Absolutely trusts area killer and we need to enforce greater transparency on them and whether oligarchs are queuing up to go to Russia, I don’t know…I keep reading about this. It seems to me entirely based on difficulties in getting a UK Visa which is circumvented rather cleverly by getting an Israeli passport so I don’t know, I think that the hostile environment for UK oligarchs is more one in one out- there is at least one billionaire who has come since Abrahimovich didn’t get his visa. So I don’t think we need to be too worried (inaudible)

Ava Lee: (inaudible) all of the points of trust and definitely the 25% minimum – we have done an in depth anaylsys  of companies (inaudible) report (inaudible) that contains exactly those recommendations.

Peter Pomerantsev:  I think we haven’t heard from Dr Andrew Foxall (inaudible)…

Andrew Foxall: As many of you know, Andrew Foxall. I run the Russia Eurasia Centre at the Henry Jackson Society. I would agree with Oliver on this. So, there is a discussion about how Oligarchs came to Russia and indeed where they are going back. I think Oliver is quite right…since the Skirpal poinsiong in March…although one could argue for months if not years before that, the UK government has increasingly been takig the threat that Russia poses seriously. I think the UK government recognises that it is a full spectrum threat that Russia poses. Not all the rich Russians are connected to Kremlin of course but those who are have connections here. I think we are in the situation of one in one out. I don’t necessarily think it’s a bad thing to be honest. I think for far too long, it was for too easy for rich Russians – many of them who are connected to the Kremlin- to get to the UK, and far too difficult for ordinary Russians who are not connected to the Kremlin to get into the UK. Sooner we move to a situation where it is easier for ordinary Russians to get here and more difficult for Kremlin cronies to get here, the world will be a better place.

Tom Brake MP: We haven’t addressed Euan’s question about displacement of money…

Oliver :I don’t know what in this country we could do about that. I mean the US possibly by using its many powers like what happens with the dollar but the UK…we are not in a strong position to bully anyone really. Sadly…

Tom Brake MP: Okay- the right hand side of the room? Yes.

Question: How is it possible that a major bank in the EU can accept 200 billion euros (inaudible)? Where are the auditors …where are the (inaudible)?

Question: You talked about London property and UK property (inaudible)…this must be having a massive effect on the housing prices and (inaudible) and political effects with disenchantment and..(inaudible).

Question: what are the effects on UK economy and others if this money leaves?

Ava Lee: About, property rates, I think you are right. We tried to quantify it but haven’t been able to in hard figures. (inaudible) properties are regularly being used to launder money sp they are sitting completely empty, particularly in tower hamlets. Lots of the anonymous properties that we are seeing there are completely empty…that has a devastating impact on communities.

Peter Pomerantsev: Danska Bank…I mean its not the first. Before Danska, it was Deutsche and HSBC..BNP..European Banks are shockingluy regulated. The absence of a strong central regulator for the Eurozone is a disgrace. The fact that Eurozone is structured is to prevent the US from enforcing everything sine it is the only country to do it …so its its…awful and it will continue to happen. One of the ost eyeopening statistic in that report is that they only had about 10% of the non resident deposit and if you scale up- actually 5%- if the other banks were doing what Daska bank was you are looking at 4 trillion euros moved through the three Baltic states which is pretty dark. The gossip is the Lithuania is stepping up to tack up the stack left by Estonia. So I expect the next scandal will proably come from there. The impact on the UK econmy and the UK property- no doubt there will be an impact. I don’t Russian money- We talk about Russians a lot in this context. Partly because of the perils of Mr Putin and partly because when Russians spend money they like to do it with a bit of a splash. So they are easy to research and fun to talk about. Same goes to the Ukrainians and the ex Soviet consumering generalist like to have (inaduable) from their money. Far more significant is probably Chinese money. If you look at the statistics for who has been buying UK Tier one investor visas, there  was a significant ex soviet client base. But the single biggest group has consistently been China- for long, for always. And in the United States- all Chinese effectively. So that kind of money is probably of more consequence than Russian money because that money is going into infrastructure, not into houses, yachts and football clubs. So you know there will be a consequence form excluding this money from our economy but it will probably be worth thinking about the consequence of not excluding the money from the economy. If you end up with even greater parts of the UK’s strategic infrastructure been owned by someone- been owned by Moneyland- that is a vulnerability at the core function of how we operate as a country. Exposing that ownership is really crucial, particularly in the way the world seems to be going…increasingly hard headed trade relationships, suddenly finding that strategic infrastructure belongs to a foreign and not friendly country is an alarming thing. The argument is too rarely made that national security implications of Moneyland which are very strong.

Andrew Foxall: No, I mean I will just echo Oliver’s last point. We saw that to certain extent with Chinese investments in (inaudible) and the current controversy surrounding Huawei’s efforts to try 5G in various parts of Worcestershire.

Tom Brake MP: we have time for another final round of questions…

Question: (inaudible) three primary specific actions to deal with the problems you described..?Hopefully give some examples of the reasons why (inaudible) were going to take tougher action?

Question: What’s the narrative that the lack of transparency is a good thing?

Question: I have not heard the word Magnitsky in the discussion so far and that obviously relates to human rights abuses and allowing people who (inaudible) into United States and other countries and this country- extend to potential financial crisis which is (inaudible)?

Question: My name is (inaudible). I have spent most of my time looking for assets hidden by companies worldwide (inaudible). I understand everything is bad, but is there something we can say about what is going in Germany and other major economies when it comes to vetting and (inaudible). The other day, I had someone from Jersey call me asking me if they (inaudible). It’s just ludicrous. They (inaudible) not (inaudible). (inaudible)…

Peter Pomerantsev: (inaudable) I think Oliver makes a very good point in his book, he looks at moneyland and the story that emerges is absolutely fascinating. There are actually some good reasons about what happened largely (inaudable). There are actually cases wwhere it is actually necessary to take the money out of the country- you can go back to Russia where there are businesses that make legitimate money and they need to mnake their profits safe because they live in a country with so little protection of property. So we have to keep that in mind. I thinkfor me that has just gone way too far away in another direction. That is more moral or practical argument (inaudable) not enough anymore (inaudable).

Ava Lee: So something positive about what is going on in the rest of the world…We have got some amazing investigative journalists who are looking at (inaudable) at the moment. So (inaudable) has kicked off kind of a whole list of investigations that have come up…really huge wave of policy change across the EU. I was mentioned not only (inaudable) member state but also company transparency that is massive and genuinely five or six years ago, this would have been unthinkable..Also, in the US there has been much much more positive movement in this space than we expected particularly when Trump came into power. One reason for that is that it is really a big national security issue and resonates with lots of Republicans andthey are been pushing this forward. So anyone who wants to launder money from arms dealing and (inaudable) weapons they need to use secret companies both in the EU and in the US…amazing work happening because of investigative journalism and lots of these journalists are under threat (inaudable)

Oliver Bullough: On the question about something positive, I asked this question for my book and the answer I was given was when the Disney corporation was buying land in Florida to build Disneyland, had people known it was Disney corporation, they would have charged them more for the land. So the fact that they could do it via small companies meant that they could get the land cheaper. That was all. So essentially I think the answer is no. If you look at what a company is for, a limited liability company exists to encourage entrepreneurship by essentially socialising risk- its an insurance policy. It means you are not going to be its good wiped out if you go into business because its for us. Because we recognise… Economy and society if there are business people. Somehow that has become confused with the fact that you get to be anonymous- it is totally peculiar. If you insured your house, and if you insisted before insuring your house that you were not going to tell the insurance company who you were, I think that would be deranged. That is where we have come to a lot of debate around anonymous companies…this is… anonymity and limited liability are totally different things…how they get conflated is beyond me. Three things that we would od- One of them would be to properly enforce our law enforcement bodies. There was a really alarming comment in the house from a Tory MP whose name has escaped me last week about the budgets for our main enforcement bodies- the SFO which is doing some pretty good work has got an annual budget of 53 million pounds which is less than what it needs but prtty good compared to what the NCA gets. The economic crime department of the NCA and the economic crime directorate which is also connected to that, there is a combined budget of 16 million pounds. The annual sum of dirty money that flows through the city is 190 billion and we are expecting our agencies with a budget of 70 million to somehow stand up to that. You are fighting a tank with a wooden sword. Its totally a ludicrous. Second is make that job easier. We need a properly, well thought of regulatory architecture…otherwise things fall through the carcks inevitably. Third one is proper tranparemcy, transparemcy of owenership of property, transparenmcy of owndership of companies..check the companies..verified. If its expensive to do that- too bad. It should be more expensive not to do it. Just to answer peter’s point, absolutely people should have right to anonymioty if they need it- Emma Watson, she owned her property off shore because she was worried about being stalked. That is totally acceptable concern for her and anyone of that stature. But we shouldn’t be using anonymity vis a structure that is designed to provide them with limited liability. That is totally illogical. If you have legitimate reasons, it should be available to everyone- not ust Emma Watson. Someone who has an abusive husband too even if they cant afford it.

Tom Brake MP: Andrew ? anything ?

Andrew Foxall: No

Tom Brake MP: In that case…I would just like to remind people that clearly there are very brave people who are doing lots of work on this and some of you might be aware that tomorrow is the first anniversary of the murder of Daphne Leitzia who was murdered for investigatory work. I would like you to join me in thanking the Henry Jackson Society for hosting todays’s event, but also Oliver, Ava and Peter for their fantastic contributions.


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