The British Government’s ‘Ill Considered’ Use of Anti-Terrorist Financing Legislation against Iceland and the Wider Implications
The Q Wealth Report
14 October, 2008
In what a Financial Times op-ed described as an 'ill-considered invocation of anti-terror laws' the UK Treasury seized assets worth about £4 billion, amongst them UK bank Singer and Friedlander (also a major offshore bank through its Isle of Man subsdiary) which was owned by Icelandic bank Kaupthing. This pre-emptive move, claim the Icelanders, was actually what precipitated Kaupthing's failure, as loan covenants on the British subsidiary were activated.
What do we learn from this? Iceland went in about a week from being a small, respectable Western European nation that nobody much thought of, to being brought to its knees and having it assets seized under anti-terrorism laws! We've heard of private individuals being wrongly accused and having their assets seized. Now we see Western banks and indeed whole economies getting the same treatment.
Press coverage shows a British population apparently unconcerned by this misuse of laws, and indeed the moves to protect creditors seem to have broad public support. It seems to me to be a typical case of the ‘end justifying the means’ – a worrying precedent when the means is anti-terrorist laws - some of the most draconian, controversial legislation passed in recent years, a grave threat to civil liberties in the UK and overseas, and something that is always foisted on us ‘for our own good.’
The Icelanders may have made some bad business decisions, but we can hardly blame this tiny economy for the world financial crisis. Maybe it is right for the UK government to protect British creditors by seizing assets – though the British public should also be encouraged to understand that investing in hitherto-unknown foreign banks can be risky. Due diligence works both ways – it’s not just something banks should do on their clients.
But what is really wrong is the use of legislation that was designed to protect against terrorist financing. Now, how can we believe British government claims that provisions such as longer detention without trial in terrorist cases will not be used in crimes that have absolutely nothing to do with terrorism? Is the whole ‘war on money laundering’ a farce… or does it have ulterior motives? Are drugs and terrorism really the reasons for the burdensome bureaucracy imposed on banks these days, or is it really about protecting the Treasury’s revenues? And if so, why can’t they at least be honest about it?
Expect to see things like this repeated with greater and greater frequency. You need to take action to protect your assets and your family. This may be an uncomfortable thought, but if you research this matter further and open your mind to what is going on, you will be in a much better position to come out of this crisis with profits.
If you would like to discuss this with myself and colleagues in person, you can meet us in Panama next month, the week after the US election. Otherwise, watch this space!
P.S. I have set up a page on Twitter, at which you can see my tweets – very short commentaries of 150 characters or less. Check http://www.twitter.com/qwealth
Peter Macfarlane is joint editor of The Q Wealth Report an established
newsletter dedicated to informing readers about creating, protecting and growing
wealth in a secure offshore environment. It also covers international living,
banking, retiring and investing. Visit www.QWealthReport.com
to see more.
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