Britain’s denial that it launders money is like Russia’s denial that it poisons spies. No one believes a word of it. If I walked into my bank and tried to deposit £55m, I would be asked to see the manager, if not the police. But if I were to shift such sums through a Belgravia flat or a West End jeweller or an offshore tax haven, I would be offered a tier 1 golden visa and honoured status as an inward investor. It is McMafia stream this way, sir, no questions asked. Eat your heart out, Polish plumber.

I have some sympathy for Zamira Hajiyeva, who this week had her right to financial privacy stripped by the high court. Her husband, imprisoned in their native Azerbaijan for fraud, is what her lawyer called a “fat cat international banker”, which he clearly thought would woo the court. She has two properties worth £22m, plus £4,000 a day to spend at Harrods, a Gulfstream jet and an Ascot golf course. These are naturally “based” in Guernsey and the British Virgin Islands. Hajiyeva might reasonably protest that she is just like any other upright Knightsbridge citizen down the ages.

The first ever of the government’s unexplained wealth orders merely requires Hajiyeva to “explain” the source of her riches. The suspicion is clearly that it was her husband’s bank. Her lawyers rightly point out that the granting of the order “does not and should not be taken to imply any wrongdoing”.

When tax-haven transparency was supposedly introduced two years ago, it was assumed that openness would be a deterrent to money laundering. But it took the Panama Papers scandal of 2016 to reveal the full extent of Caribbean tax poaching rackets.

The contrast was in what happened next. Tax dodgers in New York were paraded from their offices in handcuffs. The Germans brought 71 prosecutions. The Spaniards successfully prosecuted Lionel Messi and Cristiano Ronaldo for tax fraud. Pakistan jailed its prime minister, no less, for 10 years.

Facebook Twitter Pinterest ‘London’s mayor, Sadiq Khan, seems just as relaxed about London’s status as his predecessor, Boris Johnson.’ Photograph: Michael Bowles/REX/Shutterstock

In Britain, the revelations led to just four arrests and six interviews under caution. In an extraordinary explanation, the deputy director of HMRC, Richard Las, last month said that “wealthy and prominent members of the community” were often not prosecuted, as HMRC preferred to use their fear of “the reputational damage of custodial sentences” in private negotiations. Welcome to banana republic justice.

Governments have long implied that offering houseroom to laundered money harms no one, benefits Britain and ranks as “inward investment”. Tony Blair and David Cameron openly welcomed Russian oligarchs, Saudi princes and Chinese property hoarders. Experts put the amount of dirty money floating around the world offshore at some £21tn, with as much as £390bn removed from Russia since the fall of the Berlin wall alone. The idea of such loot clearly dazzled British ministers, even though the Treasury sees virtually none of it.

If other countries allow their wealth to be stolen it may not be Britain’s problem, but it makes Britain an accessory to the greatest kleptomania of the century. To the US tax authorities, as to the man in the Moscow street, London is the capital of oligarchia, of McMafia operations. It is responsible for two-thirds of the world’s tax havens, mostly in the Caribbean, their legality no defence against their deplorable morality. They are like medieval pirates, a standing rebuke to the world’s economic order.

A related issue is fairness. Last week, the property magnate Nick Candy refinanced his London flat at a stupefying £160m, a valuation that proves that cash is continuing to flood out of Russia, China and the Gulf. At the last count, there was some £35bn of Russian money alone sloshing through London’s jurisdiction. With housing supposedly in dire supply, planners have allowed whole streets in Westminster, Kensington and Chelsea to become ghost towns, rows of empty townhouses and blocks of flats. The impact on London’s property market of this “buy-to-leave” is becoming stark. Having lived in London all my life, I find its status as the world’s financial funk-hole sickening. Yet it leaves London’s mayor, Sadiq Khan, as relaxed as it left his predecessor, Boris Johnson.

Other countries require foreigners, at the very least, to pay local income and realistic property taxes. London’s oligarchs pay little more than £2,000 a year to their councils. Residents of Manhattan pay two, three or even 10 times that, and even the richest condominiums tend to require owners to be resident. Other world cities ban foreigners from owning, leasing or at least failing to occupy property – among them Berlin, Singapore and Hong Kong. Australia bans incomers from buying in Sydney and Melbourne. This does not appear to harm their economies. As for such blatant tax dodging as “non-domiciled” status, it is indefensible. Britain legalises what puts American citizens in jail.

Will unexplained wealth orders make a difference? Seeking to keep out fraudsters and thieves is a reasonable thing for a country to do. But it means little if the authorities do nothing beyond declare an occasional individual persona non grata.

As long as “fat cat bankers” can win tier 1 visas, and as long as crown territories are treated with kid gloves, the world’s cash will beat on London’s door. As long as governments refuse to restrict property ownership or levy realistic local taxes, the money will come. Now we have Brexit, and with it the likelihood of an exodus of respectable investment. Any money, clean or dirty, may seem like good news. Does London really want to become another Monaco or Macau, a refuge for fiscal piracy on the fringe of Europe? I will not hold my breath.

• Simon Jenkins is a Guardian columnist