Local laundering

As you read this, I am enjoying the sunshine (well, the aircon while looking out at the sunshine) of Gibraltar.  I am delivering two days of training to members of the Gibraltar Association of Compliance Officers, and – as always – their committee asked me to make sure that my training was localised.  Thankfully this did not mean translating it into a dizzying mixture of English, Spanish and Llanito, but rather, making sure that some of the examples I used addressed specifically local concerns.  To be honest, for me this is one of the pleasures of working in several jurisdictions: I love reading the local news and keeping up with regional money laundering concerns.

In Gibraltar, for instance, they are in a physically interesting position.  This has caught the headlines recently, with the argument with Spanish fishermen over the artificial reef, but it is of much longer standing money laundering concern.  Sandwiched between Africa and Europe – and more specifically between Morocco and Spain – Gibraltar has to be on the lookout for smuggling between the two of drugs and people, and of course money.  Marbella, just up the coast in Spain, is dominated by organised crime gangs, always on the lookout for a nearby foreign jurisdiction through which to launder their proceeds.  Morocco is known to be home to various terrorist cells, including some linked with the 9/11 attacks.  On a smaller (but more daily irritating scale), there is the cigarette smuggling.  In 2011, 120 million packs of cigarettes were imported into Gibraltar (enough for 225 cigarettes a day for every man, woman and child in the place…), where they sell for about 27 euros a carton.  The majority of them are smuggled over the border into La Linea, the Spanish town next door, where they sell for about 43 euros a carton.  All that cash has to go somewhere.

Criminals are imaginative, and they take advantage of whatever their location has to offer.  The law must try to adapt – Peru has just announced, for instance, that its AML requirements will be extended to livestock auctions, which criminals are using to offload their cash (there must be some puns in there – I rely on you, dear readers).  And AML training has a duty to reflect local concerns – not just to be polite, which it is, but also to ensure that everyone realises that money laundering is not a distant, theoretical problem, but one that threatens their own community every day.

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4 Responses to Local laundering

  1. Claire says:

    Aren’t you lucky that Great Britain has so many islands & peninsulas where you can organize AML training! And in sunnier parts of the world. It seems to me that anywhere where there is a strait between two countries or two continents, that there are smuggling routes. I was once in Musamdam, the Omanian peninsula, across from Iran. The Strait of Hormuz looked more like a highway for smugglers, that many speed boats passed.

  2. Dear Claire
    You are so right: any difference between jurisdictions – in prices or licensing or taxation – leads to smuggling of various sorts. A Gibraltar friend suggested that Gib should slap more duty on cigarettes – which would (a) remove the smuggling imperative, (b) raise lots of revenue for Gib, and (c) reduce smoking-related illnesses in the population. But apparently it would not popular among smoking voters – it’s that pesky democracy thing again!
    Best wishes from Susan

  3. Roy McCarthy says:

    Livestock auctions in Peru? Allama-ing!

  4. Roy, you’re a sad loss to the stage!

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