The British government has put Britain’s private school network on notice of a crackdown on dirty money used to pay fees for the children of top-tier criminals and the corrupt.
Security minister Ben Wallace on Tuesday warned that too many people including the sellers of luxury cars and private school officials were “turning a blind eye” to money laundered from major crime.
“We have to make sure when they go out to spend their ill-gotten gains that we’re asking ourselves: ‘Does it pass the sniff test?”, he told the BBC.
His comments came as the government launched a new strategy to target organised crime that is estimated to cost the UK £37 billion (Dh176 billion) annually.
Britain’s private schools are popular with corrupt elites seeking to live in the UK. “Private schools don’t just legitimise your wealth, they also legitimise your children as well” for families with tainted reputations at home, said a National Crime Agency (NCA) official.
Home Office officials in September privately sought information on dirty money being used to pay for school fees from Transparency International, which campaigns for more rigorous anti money-laundering checks.
Details were passed on about a £11,000 bill for a Russian pupil attending the prestigious Millfield private school in southwest England that was paid by a shell company under investigation in an international money laundering probe.
Senior law enforcement officials said last month that the private school network had to do more to clean up its act. Schools had notified authorities so rarely about suspicious transactions that they did not show up in official figures, said Donald Toon, a senior official at the NCA.
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The UK private schools sector educates some 625,000 children in about 2,600 schools, according to the body that represents about half of all private schools. Average fees for boarding school places stand at more than £33,000-a-year, according to the latest figures from the Independent Schools Council (ISC).
More than 50,000 children from overseas attend ISC schools with more than 14,000 from China and Hong Kong, nearly 4,000 from the United States, more than 2,800 from Russia and nearly 1,500 from the Middle East, according to its 2018 census.
“Illicit finance crops up in many places where people should be asking questions,” said Mr Wallace in a speech in London. “London property, public schools, sports teams and purveyors of luxury goods. For too long this has gone unchallenged.”
Julie Robinson, ISC general secretary, said schools were aware of their responsibilities to report suspicious payments to the authorities. Schools "will respond fully to any changes in law or practice", she said. "We are working with the Home Office and other agencies to help ensure reporting remains as accurate as possible.”
London, with its large financial sector, has long been seen as a major money laundering centre with an industry of legal and accountancy professionals able to hide the source of illicit money.
The source of the money of wealthy expatriate Russians has increasingly come under the spotlight following the nerve agent attack on former spy, Sergei Skripal, in the southern English city of Salisbury in March. UK officials have pointed the finger at Moscow, which denies responsibility.