Lloyds freezes 8,000 offshore Jersey accounts in dirty money push

Lloyds freezes 8,000 offshore Jersey accounts in dirty money push

Good to see Lloyds bank being proactive in “freezing” client accounts pending receipt of requested documentation. One could argue that if the documents were insufficient to satisfy the AML/KYC JFSC and global standards, the accounts should have been suspended 3 years ago when the first request was sent! There a number of factors in play here. Firstly, post Panama Papers leak, Jersey has been keen to present itself as a “clean” offshore finance centre in comparison with some others. Secondly, post the 4th Money Laundering Directive, the bar was raised on whats required to prove “source of wealth”. Thirdly, the Denske bank / Latvia issues have highlighted how sanctioned countries / entities may use offshore centres or small EU countries as a back door into the EU / US. Fourthly, prevalence of trust companies as clients increases their risk profiles given the lack of transparency and need to identify UBOs. Its possible that majority of such LBG clients will provide the required documentation and remove the AML flags. However, they should still be subject to on-going STR monitoring as delays in providing documentation is itself a red flag!

 

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Ayaz Siddiqui, 24th June 2019

GRT Consulting

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