As I mentioned in my last post (isn’t that a tune?), I spent Friday 15 March hobnobbing with the great and the good of the AML world in Brussels. Yes, darlings, I was walking the corridors of power at the EU. Actually, to be precise, I was riding the escalators in one of their many buildings – but I was very over-excited by it all. What to wear? (A 1960s wool dress in a graphic print of pink, purple and cream, so that people would remember me amongst all the serious black.) Where to sit? (Third row from the front, aisle seat.) It was just as you see it on telly: semi-circular rows of seats, head-phones for simultaneous translation, blue circles with yellow stars absolutely everywhere – including on the notepaper, some of which I have brought home to leave on my desk as a swank. Now that I have set the scene, I suppose I should tell you a bit about what I heard. There was a lot said, by over a dozen speakers (including two Commissioners, which we were told several times was Quite An Honour), so I shall do several blogs this week about it.
But what I must say first of all is that – wait for it – I have touched greatness. Yes: I shook the hand of John Carlson, Principal Administrator at the FATF Secretariat. And I’m not being sarky; for me, it was a real thrill to meet the man who puts his paw-mark on the revised Recommendations, the new methodology, the lists of naughty countries and more. And so that I didn’t descend into the depths I have experienced before when meeting heroes*, I prepared a couple of questions to make me sound sensible rather than stalking. In the morning break, I asked about the extension of the definition of PEPs to cover the domestic variety, and on behalf of my beloved small jurisdictions who may be thinking of adopting the new FATF standard on this, I asked whether it would be acceptable – for domestic PEPs – to limit that definition to the PEPs themselves and not include their families and close associates. I explained that in some jurisdictions, the wider definition would haul in everyone on the island. And he said that in his view it should be possible to risk assess domestic PEPs, and – as long as they are spotted as being PEPs and the rationale behind your decision is then recorded – not to then apply EDD to them.
Flushed with success, and wanting to give him the opportunity to remember me and my dress, I collared Mr Carlson again at the end of the conference, and hit him with my second question. Why, I wondered, does the definition of high value dealers mention only trading in goods for cash, and not services for cash – when the risk is not what they are buying, but the cash that they are using. As examples, I suggested people paying school fees in cash (and schools being entirely unaware of the dangers, with not being in the AML family), and criminals disguising money movements as payments to consultants. And do you know what he said? “Because we’ve never thought of it.” I can’t believe that’s true, and will put it down to the poor man being tired at the end of the week, but wouldn’t it be fun if I had thought of something new? So I said that I would expect to see it in the next revision of the Recommendations – cheeky! – and if it does appear, I at least shall be referring to it as the Grossey Clause.
* About a decade ago, I saw Stephen Roche (retired Irish cycling superstar) at a race in London. I finally fought my way through the crowds to meet him, and all I could manage was, “Mr Roche, I’m a really, really big fan”. I may have simpered. And I do know that my normally tolerant husband pretended not to know me for at least an hour afterwards.
I shrieked in disbelief when I read: ”Because we’ve never thought of it.” Honestly, they should frequent a few money launders before they start working on their AML legislation! Of course the whole money laundering thing is about spending the cash you have!! Without anyone in AML knowing about it. I believe there is kind of a laziness about it. I can’t remember if I ever told you about the time my ex was mentioned in the newspapers re: the biggest tax fraud scandal in my home country. When I was divorcing my ex, I went to see the federal agent in charge of this case. He told me: yes, we read about this man in our files, but we thought he was a fictional person! (he was actually applying for the citizenship of my home country at that time…). They looked through my files, but they just put it all aside with a shrug. This major fraud case has been the joke here. No wonder it just continues. Sometimes I think that unless it is thrown in their lap, they don’t have to go digging too deep, nothing much is done about it. And you know just as well as I do that the whole issue with money laundering is to hide what they are doing, divert the attention to something legal looking. I am looking froward to the Grossey clause! Printed on pink paper 😉
What a great idea for an AML team outing, Claire – a visit to some money launderers!
Can I apply for the job of tourguide? 😉
I can’t think of anyone better!
Hi Susan, very interesting. Can’t wait to hear more.
I’ve decided to go all out and blog FIVE TIMES this week – there is so much to tell you!
Best wishes from Susan
Susan, FATF regulations do consider persons dealing in goods or ‘providing services for cash payment’. Why would you specifically need to align it to ‘high value dealers’?
I am a bit confused by your comment. By “FATF Regulations”, do you mean the Recommendations? And if so, I can’t find the definition you quote. Please could you point me in the right direction?
It occurs to me that you might be referring to MLD4, but this mentions ” providers of gambling
services and dealers in goods with a threshold of EUR 7,500″. This brings in providers of gambling services who accept cash payments, but not providers of any other service for cash payments (e.g. schools and universities, consultancy firms, perhaps even top-notch brothels and escort services…).
But I may have missed the bit you mean – which would be a great relief, as I really think that providers of services for cash should be included!
Best wishes from Susan
Apologies, I’ve found the source of my ‘weak thought’ see http://europa.eu/rapid/press-release_IP-13-87_en.htm
These two specific and additional proposals aim to ‘bring within its scope all persons dealing in goods or providing services for cash payment of Euro 7,500 or more.
Neck sufficiently wound back in…..
Many thanks for this clarification. So this suggests that the suggestion [to include cash dealers in services] was tabled, but booted out during discussions – although the threshold was lowered [for cash dealers in services, and providers of gambling services for cash] from 15,000 to 7,500 euros.
As I remember, this is what happened during the run up to MLD3 as well. So there is obviously a very powerful lobby during the horse-trading that manages to get cash-services-traders excluded each time – I wonder who?
Best wishes from Susan
Thank you for this first update on your adventures, including the all important “what to wear” considerations.
It’s great to see that, as well as your efforts paying off in terms of receiving this prestigious invite, the blog is also attracting more comments and conversation.
Glad to see that my sartorial comments are of some help – so much easier for you men with your suits (although I’ve seen some sights on Dress Down Fridays, I can tell you).
And like you I am delighted to see more people commenting and chatting on the blog – after all, it’s much more useful as a dialogue/multi-logue than as a soliloquy.
Best wishes from Susan
Pingback: Now that’s what I call a service charge | I hate money laundering
Pingback: Better late than corrupt | I hate money laundering