During some AML training last week, someone asked me a question that I am regularly asked, and – despite this (you’d think I’d learn) – I still don’t have a good answer to it. In short, they wanted to know how far back to go with source of wealth enquiries – how many years, or how many generations? I talked about best endeavours, and feeling comfortable with the information you are given, and seeing that it all fits together into a coherent story, blah blah blah, but the truth is that there is no clear answer to this question. Certainly no AML legislation or guidance (as far as I know – please tell me if I’m wrong) puts a time limit on this; no-one says that you have to go back four generations, or fifty years, or to Adam and that apple. And so – as with so much of CDD these days – it comes down to a judgement call: have we found out enough to satisfactorily mitigate the risk in this case?
Some smarty-pants (usually me…) will point out that nowadays financial institutions are delighted to have the Kennedys and their chums as clients, despite Joe Senior’s rather murky start in business. And how many of our leading companies in the UK were founded on the proceeds of the slave trade? Even with more recent criminality, it seems that it takes only a few years for illegal proceeds to attain a patina of respectability – particularly if those who own them are in a position to quash any suggestions of irregularity. The divine Imelda Marcos and her relatives are once again riding high in the Philippines, and efforts to trace the origins (and indeed the current location) of the family fortune are being stymied. The Marcos lawyers are still claiming that the late Ferdinand was a very successful gold trader – which is news to the Filipino tax authorities. The head of the local Commission for Good Governance is circumspect when asked about the source of the Marcos wealth, saying “Your guess is as good as mine”. Sadly for MLROs, this is unlikely to be an acceptable CDD entry on client files.