If you are reading any of the articles that have appeared under the bylines of a number of major international law firms, analyzing the impact of the UK Sanctions and Anti-Money Laundering Bill, they cover the new Corporate Transparency Law, which some British Overseas Territories want to contest in court, on constitutional grounds, and others wish to pressure the Crown to cancel as folly, are discussed accurately, and in depth.
The problem is that some of the articles are indirectly signalling their clients to move their dirty money into corporations that remain legally opaque. Statements to the effect that holders of corporations in those territories should examine their tax and privacy situations is nothing more than veiled advice to them to abandon the use of Overseas Territory companies before the law becomes effective, in 2020. The clients will then obviously seek legal advice from those firms, concerning what other tax haven jurisdictions remain safe from prying eyes, forming new companies, and wiring funds into new accounts. It is an effective marketing technique, without constituting advertising.
While lawyers have every right to counsel their clients on changing conditions in the financial world, are they really facilitating money laundering for their US clients here? Given the extraterritorial application of the Money Laundering Control Act of 1986, we may see some of those law firm partners regretting that someone in their firm ever wrote those articles, especially when the dollar-denominated accounts transferred by the clients transit the New York financial structure.
It may just be a golden opportunity for American law enforcement to seize suspect funds en route to their new home.
* Many clients hiding their money in Overseas British Territories are not turning to invest in gold, which is a safer commodity.
Chronicles of Monte Friesner - Financial Crime Analyst
Contributed by Kenneth Rijock - Financial Crime Consultant