One of the trickiest things about money laundering is knowing how much of it goes on. We know it’s a LOT, but with most of those who are required to comply with the Money Laundering Regulations (or their equivalent) working in sectors that are very numerate, it would be nice to be able to be rather more specific than “a LOT”. The most quoted statistic was put out by the International Monetary Fund way back in 1996, when they said that the amount of money being laundered was equivalent to 2-5% of the world’s Gross Domestic Product. Does that really help us much? For a start, how big is the world’s GDP? And then “2-5%” is a huge range – is it 2% or 5%? So really we’re back to where we started: it’s a LOT.
Some people have tried to home in a bit more, such as my hero Professor John Walker with his Crime Trends Analysis, and more specifically his “Walker Gravity Model” for measuring global money laundering. There is also Brigitte Unger and her book “The Scale and Impacts of Money Laundering”. But measuring money laundering – indeed, measuring any crime – is inherently fraught with difficulties. Do we measure what criminals confess to, or what they are convicted of? Do we trust that law enforcement agents and the criminal justice system employees are doing what they should to investigate, prosecute and punish money launderers – given that Transparency International says that these are the two most corrupt sectors in the world?
So maybe we will have to content ourselves with that most imperfect of estimates: a LOT. A VERY BIG LOT.