WHEN Bill Browder investigated a $230m fraud perpetrated by Russian officials against his investment company, Hermitage, he uncovered a money trail that led to several financial centres, including London. At least $30m of the stolen money flowed into British banks. Much was moved through British shell companies with British nominee directors, one of which was set up by a corporate-registration firm based near Mr Browder’s London office. The loot flowed on to, among others, British interior-design firms, estate agents and a personal concierge service.

No one knows how much dirty money is rinsed through London, but Britain’s National Crime Agency (NCA) reckons British banks and their subsidiaries (including those in overseas territories) launder “many hundreds of billions of pounds” each year. British companies and partnerships were prominent among the getaway vehicles used in some of the biggest money-laundering schemes of recent years, including the “Russian laundromat”, in which at least $20bn was siphoned out of Russia in 2010-14, and an even bigger washing exercise through Danske Bank’s Estonian branch. Much of the iffy money is ploughed into swanky British pads. Over 40,000 London properties are held by overseas firms, a quarter of them registered in the British Virgin Islands.

As well as highlighting the plethora of British links to money-laundering, the Hermitage case illustrates the inadequacy of its law enforcers’ response. Authorities in 11 countries, including America, Switzerland and Monaco, have acted on Mr Browder’s findings. Not Britain. Five separate approaches between 2010 and 2016 were ignored or rejected. Eventually, after his team provided devastating detail on suspect transactions with a British link, an NCA investigator tried to take up the case. A senior colleague—the agency’s liaison with the Foreign Office—told him to drop it because Mr Browder was “a pain”.

Two MPs have called on the agency to explain to Parliament why it is not investigating. The NCA says there was no political interference and that it concluded an investigation was not “an effective way forward” because there was “no realistic prospect” of successful prosecution or the recovery of illicit funds in Britain.

Cock-up, conspiracy or a justifiable rejection? Whatever the explanation, it is clear that Britain’s broader war on dirty money lacks oomph. Its most recent high-profile case was the prosecution of James Ibori, a former regional governor from Nigeria. That was a decade ago.

Blame, in part, a lack of funding. The NCA’s already modest 2017-18 budget, £437m ($577m), will fall by £10m next year. It has far fewer investigators with the skills to handle complex cases than its peers in America and comparable European countries, including Italy’s Guardia di Finanza, with its army of forensic investigators. Pay is lower too, and many quickly end up at private firms. “If you bought a round of drinks for all the ex-NCA investigators now in the City or Canary Wharf, you’d bankrupt yourself,” says Tom Keatinge, a financial-crime expert at RUSI, a think-tank.

Fragmentation is another problem. Though the NCA is the most prominent crime-fighting agency, a major money-laundering probe might also involve the Serious Fraud Office, the City of London Police, HM Revenue & Customs (HMRC) and others. The government is hoping that the imminent launch of a National Economic Crime Centre (NECC), housed within the NCA, will bring more coherence. This will lead big cases and co-ordinate other agencies’ work. Ministers have agreed “significant” new investment in financial-crime capabilities from 2019. But they have not said how much. The NECC will mostly use staff and money from existing agencies. Its forecast spending for 2018-19 is an underwhelming £4m-5m.

Donald Toon, head of the NCA’s economic-crime team, insists it is “upping its game”. Big cases involving money from Africa and Asia are in the works. Britain’s corruption-fighters have a new tool: the “unexplained wealth order” (UWO), which puts the onus on targets to show that properties under suspicion were bought with clean money. The first UWO to be issued in Britain (Australia already uses them) has just survived a legal challenge from the recipient, an ex-banker’s wife from Azerbaijan. Mr Toon expects a “handful” of UWOs in the coming months. Campaigners want more: Transparency International says it has identified 150 London properties that warrant UWOs, and that even those are the “low-hanging fruit”.

But the legal barriers to conviction remain daunting. Prosecutors will have to go through several more stages before they can seize the ex-banker’s wife’s house. Disproving even a flimsy explanation of the money’s provenance can be hard if the country where the original crime took place does not co-operate. Deep-pocketed defendants challenge every move.

In one regard, Britain is a financial-crime-fighting trailblazer. In a bid to crack down on shell-company abuse, in 2016 it became the first G20 country to introduce a public register for company owners. However, submitted information is not systematically checked. Recent analysis by Global Witness, an NGO, found thousands of “highly suspicious” entries, including firms creating circular structures where they appear to own themselves.

Companies House, the government’s corporate-registration agency, says it has 80 people working to improve the register’s “integrity”, but that it does not have the capability to verify the accuracy of all details sent in. The only prosecution for false submission was of a campaigner who submitted dodgy information to show how easy it was, then shopped himself. Meanwhile, policing the 2,700 outfits that help set up British companies falls to HMRC. It has shown little enthusiasm for the job. The largest publicly disclosed fine it imposed last year was £6,000.

That leaves some worried about how effective another planned public register will be: for owners of overseas companies that own British property. Moreover, the timetable for this has been pushed back to 2021; it could slip further.

Others, not least in government, have a more pressing concern: a looming evaluation of Britain’s anti-money-laundering progress by the Financial Action Task Force (FATF), which sets global standards, expected by December. The report card should contain at least a few low grades; the FATF is, for instance, no fan of relying on unverified data. An unfavourable assessment would give anti-corruption activists even more ammunition to urge a proper clean-up of the London laundry.