A while ago I read an interesting book called “Nudge” by Richard Thaler and Cass Sunstein – it’s all about improving your decision-making skills, which appealed to me (as someone who has turned dithering into an art form). Regular readers will know that I am always – but always – looking for links to financial crime, and there, on page 72, I found it: two paragraphs with the heading “Conformity and Tax Compliance”. It turns out that we are more sheep-like than we would care to admit. In an experiment in Minnesota in the US, some taxpayers were told that their taxes were being spent on the public good, while others were told about penalties for not paying, others were given links to further information on how to complete the forms, and yet others were told that more than 90% of Minnesotans are already law-abiding taxpayers. Only the last group changed their behaviour in any way at all – by being more honest with their tax – and the researchers conclude that “some taxpayers are more likely to violate the law because of a misperception… that the level of compliance is pretty low. When informed that the actual compliance level is high,they become less likely to cheat.”
So maybe we’ve been getting it wrong all these years. Perhaps we shouldn’t be passing AML legislation, with offences and scary penalties for individuals and corporations, but rather putting out lots of cheery and encouraging publicity material saying things like “99.8% of people do not launder money for criminals”, and “99.7% of financial sector employees are reporting their suspicions in exactly the right way”. I’m not convinced that the world’s regulators and law enforcement agencies will go for it – it might be a bit soft and fluffy for their taste.
I hate money laundering 