for the busy 🐝.

• The Russian invasion of Ukraine shed some light on real estate owned by the Oligarchs in the UK

• The City of London is different from Greater London, making it a political phenomenon

• How the British Empire transitioned from a colonial power to a financial handler of the elite

• How trusts serve as the root of vast amounts of💰laundering

• The solution is to have a publicly accessible register of the beneficial ownership of trusts and all types of companies. 

all it took was a war. 

On February 24, 2022, Russia's invasion of Ukraine marked the largest attack on a European country since World War II, leaving Ukrainian cities in ruins. In response, countries worldwide imposed sanctions on Russia and its closest allies, the oligarchs. 

Europe seized mansions and super yachts, while Americans implemented travel bans, froze bank accounts, and prohibited dollar transactions with Russia. Billions in aid flowed to Ukraine in solidarity. However, one ally faced pressure to take a tougher stance on the oligarchs—a place where billions in real estate had amassed over the decades: the United Kingdom, specifically London.

Under the pressure, London took action, and as reported by Bloomberg, real estate worth at least £2 billion was sanctioned. This matter garnered extensive coverage last year, but Russian-owned real estate represents just the tip of the iceberg.

Before we move on from the Oligarchs, it's essential to understand why they established roots in the UK.

Following the dissolution of the Soviet Union, a significant transfer of wealth occurred as state-owned assets underwent privatization. This process involved close connections with government officials, politicians, and business figures, leading to the dominance of the oligarchs. However, many of them chose not to remain in Russia. 

During a period, the UK implemented a 'golden visa' program. With a £2 million investment, individuals could expedite the process and gain citizenship in the country. This program was an attractive avenue for oligarchs and people from around the world.

Yet, the golden visa program is just one factor that drew Russians and individuals globally to London.

the city of london. 

The City of London is distinct from the metropolis of London. While geographically located within Greater London, its history is fascinating.

The City has its mayor, police force, and a unique governance structure with roots dating back to the Middle Ages. Although coexisting within Greater London, it differs significantly in governance, taxation, and legal matters.

In 1066, William the Conqueror faced challenges when attempting to seize the City. In a pivotal agreement, the City was granted special rights and privileges in exchange for recognizing the Crown as its sovereign. This historic deal continues to attract a diverse array of professionals, including lawyers, accountants, bankers, and consultants.

the suez canal.

You're familiar with the British Empire, right? It was one of the largest colonial empires in history, extending across the globe, including North America, India, Africa, Australia, and more. But let's not dive into the details.

What's important is that over time, people grew weary of colonization and desired to assert their independence.

In 1956, Egypt sparked what is now known as the Suez Crisis or Suez War by nationalizing the Suez Canal—an action that the United Kingdom and France strongly opposed.

Control of the Suez Canal, a crucial waterway linking the Mediterranean Sea to the Red Sea, rested in the hands of British and French companies. Tensions heightened as British and French forces initiated military operations to seize control of the canal and remove Egyptian President Gamal Abdel Nasser.

The United States and the Soviet Union opposed these military actions, pressuring the involved countries to withdraw their forces from Egypt. This event marked the decline of traditional colonial powers and the ascendance of the United States and the Soviet Union, leading to the transformation of the UK from a colonial power to a global financial influencer.

colonial power to financial handler. 

The Suez Crisis triggered a significant sell-off in the sterling, putting British commercial interests worldwide in jeopardy. Faced with a vast reach, Britain took measures to protect the value of the pound by restricting overseas lending.

To safeguard the pound, Britain opted to borrow dollars rather than purchase them. By not directly acquiring dollars, they managed to circumvent both Bank of England and American regulations. This marked the inception of the Euromarket.

This is the start of how the UK became the financial handlers of the elite. London, and more specifically, the City of London, became the place to skirt regulations. 

the multitrillion-dollar offshore industry.

1,000,000,000,000 = 1 trillion

The offshore industry is no secret, where people, companies, and countries contribute to this multitrillion-dollar industry.

What countries come to your mind? The Cayman Islands? The British Virgin Islands?

Well, have you ever stopped to wonder why they were called the British Virgin Islands? Remember how we mentioned the British Empire was a colonial superpower that spanned the 🌏?

One by one, countries declared their independence, but not all.

In the '60s, overseas territories like the Cayman Islands, Bermuda, and the British Virgin Islands became some of the biggest tax havens in the world, and some remain so to this day. Accountants and lawyers from London flew to these offshore jurisdictions and began drafting and setting financial secrecy laws and regulations.

The UK can make changes and laws governing its overseas territories. They do have a high degree of self-governance, but the UK retains ultimate authority and can intervene. Pressure from other countries has been placed on this issue before. But when asked for intervention, they give a little 🤷‍♂️ on the matter.

the laundry mat. 

Now wealthy individuals and companies are savvy, seeking ways to minimize taxes and, ideally, maintain anonymity.

Many opt to bank in Switzerland—you might have heard about it or seen it in movies, where Swiss banking ensures the protection of their clients through notorious banking secrecy.

Now, pay attention to this crucial point: while countries may claim to be tough on banking regulations, much of the money laundering occurs due to systems farther up the chain.

Enter the trust 📑

The trust is a cunning mechanism that manipulates the concept of ownership. In most, if not all, offshore jurisdictions, there are little to no qualifications required to be a trustee.

Anyone can establish a trust and act as a trustee, with no regulatory bodies overseeing, registering, or certifying these trusts. Essentially, they are invisible arrangements, known only to the trustee and the settlor.

So, how do the elites launder money? At a fundamental level, one way involves the following steps:

1. Setting up a trust: This legal entity can hold and manage assets, creating a separation between the true owner of the funds and the assets within the trust.

2. Setting up shell company(ies): The trust becomes the owner of one or more shell companies with the primary goal of holding and moving money.

3. Opening bank account(s): The shell company then opens one or more bank accounts, allowing money from various sources to be used for purchasing assets.

4. Asset Acquisitions: At this stage, you can essentially ball out 🤑. Perhaps in another article, we can delve into why real estate is a common asset class for both money laundering and a smart choice from a tax perspective.

what is the solution. 

Trillions of dollars, and nothing can be done? Why don't governments worldwide take action? Will the City of London remain a perpetual political phenomenon?

It's challenging to envision change, given the immense power these individuals wield. If you have any suggestions, please share.

However, the solution for this type of money laundering is actually straightforward. The real challenge lies in getting it implemented.

Countries worldwide are losing out on billions of dollars due to a lack of financial transparency in taxation and ownership. When a scandal erupts, it's all too easy for people to keep their hands clean while continuing business as usual.

Will change happen? Who knows? But I hope this write-up has made an impact on you, and that you've gained some valuable insights.

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