I talked yesterday about my excitement at attending an EU conference on AML/CFT in Brussels, and meeting one of the grandes fromages of the FATF. Two further speakers whom I did not meet in person but who both made quite an impression on me were Jeremy Carver and Anne Birgitte Gammeljord. (By the way, I did notice that the moderators for the panel sessions were able to pronounce all speaker names without any hesitation, despite the range of nationalities – I wonder if they practise in front of their bathroom mirror in the morning?)
Jeremy Carver is a Senior Adviser to Transparency International UK, and started his allotted eight minutes with quite a statement: “Despite decades of AML effort, the volumes of illicit funds flow are increasing, not diminishing – is much of our effort being targeted in the wrong direction?”. He did have a solution: “If you’re going to make a difference, you need to concentrate on the primary financial markets of the world – notably London. We should go to the people working in those markets and say, ‘You know what goes on here, you work out how to control it, and there will be very significant penalties if you fail.’.” The English-speakers in the room gasped first, followed by all the others as the translators caught up. (From this point on, several speakers made disparaging reference to London – culminating in a question from the floor where the person introduced themselves as being from “the evil city of London”.) In a later session, Mr Carver elaborated on his theme: “Who knows better how the banking industry works than the bankers? They need to come up with innovative solutions that will work for them, across borders. We need rules generated from within the city; we need to cherish our own city and protect it, so that we have a rush to the top rather than one to the bottom – everyone will want to have a city with the highest standards.” Mr Carver also had a robust attitude to beneficial ownership: “Creating a legal person is a public act, and that transparency should be maintained throughout the life of the legal person – the default should be full transparency.”
Ms Gammeljord represents the Council of Bars and Law Societies of Europe – the trade body for lawyers’ trade bodies. And she “notes with regret that MLD4 [the Fourth Money Laundering Directive] goes beyond the FATF Forty Recommendations”. In particular, she said that her member organisations – and by extension their member lawyers – were concerned that the five-year retention period for records for clients about whom there has been no money laundering suspicion might not accord with human rights requirements. She also said that the new requirements around beneficial ownership (and keeping a record thereof) “will impost significant administrative burdens on legitimate companies, which thankfully are still in the majority”. Finally, and here we could really see the lawyer coming to the fore, she concluded that the penalties specified in Article 56 of MLD4 are “unacceptable, because such sanctions ought to be applied only by a court of law and not by administrative bodies”.
I was sitting next to a lawyer from France, and she shook her head several times as she listened through her headphones; when I asked her during the break why she had been disagreeing, she said that such nit-picking makes lawyers look bad, and that it is a waste of time arguing against things that have already been decided – it just makes lawyers seem to be bad losers and “anti-AML”. During the response time at the end of the panel session, Jeremy Carver (whose plain-speaking may be something of a novelty in the velvet-gloved environs of the EU) ventured the opinion that “lawyers are not sanctified and legal professional privilege is garbage – they are simply financial intermediaries”. Many people in the room applauded – although personally I was too busy writing notes for you, dear readers.
I hate money laundering 