Will that be cash, sir?

About three weeks ago Singapore announced that it is going to stop issuing its $10,000 notes because of “the risks associated with large value cash transactions and high-value notes”, according to the Monetary Authority of Singapore.  However, the notes already in circulation will remain legal tender indefinitely.  Now, ten thousand Sing dollars is worth about £4,750 – so that’s one stonkingly valuable note.  By comparison, the Bank of England issues banknotes into circulation worth £5, £10, £20 and £50.  (There is a “giant” banknote worth £1,000,000, and a “titan” worth £100,000,000, but you won’t find them in a cashpoint – they’re used to back banknotes issued by banks in Scotland and Northern Ireland.  For every Scottish or Irish pound issued, the issuing bank has to deposit the equivalent in sterling at the Bank of England – and the giants and titans are the shorthand for that.  I didn’t know that – isn’t it interesting?  I feel a financial crime novel coming on…)

Large value banknotes have always been popular with money launderers, because they are efficient: £1,000,000 in £20 notes weighs more than 50kg, while the same value in 500 euro notes weighs only 2kg.  And talking of 500 euro notes, in 2010 the Serious Organised Crime Agency estimated that 90% of 500 euro banknotes sold by bureaux de change ended up in the hands of organised criminals.  In May of that year, the UK government decided to withdraw the 500 euro note from sale in the UK – you can still sell them to bureaux de change, but you can no longer buy them.  We were not the first to regret a high-value note: in May 2000, the Canadians withdrew their $1,000 note – C$1,000 is now worth about £545.  Any C$1,000 note paid into a bank is shredded, but they are still legal tender – and nearly a million of them have yet to be turned in and destroyed.  According to money laundering expert Jeffrey Robinson: “They are used now to pay off IOUs, not as traditional cash.  [Criminals] keep paying with them, over and over, and it’s only the last guy in line who has to worry about cashing them.”  Leaving those existing Singapore $10,000 notes in circulation will no doubt create a similar situation in Asia.

So where will criminals turn now if they want to carry their cash proceeds in a slim briefcase rather than a bulky holdall?  There are various commemorative notes issued with large values, such as the 500,000 baht note (worth about £9,190) issued in 2000 to celebrate the 50th wedding anniversary of King Bhumipol Adulyadej and Queen Sirikit – but criminals would not be interested in such memorable notes, which would draw unwanted attention to them.  But in general circulation Singapore still has a $1,000 note (worth about £475).  Switzerland has a CHF 1,000 note (about £650).  And Brunei has a $10,000 note (about £4,650).  Of course it does.

This entry was posted in AML, Money laundering and tagged , , , , , , , , , . Bookmark the permalink.

6 Responses to Will that be cash, sir?

  1. James Barclay says:

    Hi Sue,

    Hope you well and I heard many years ago now on the regulatory intelligence grape-vine that the day before the official launch of the Euro the European authorities lost or had stolen a set of “master” plates for the €500 note. Not very well publicised for obvious reasons and the plates concerned went “missing” in transit via chartered private jet, complete with armed escort. Oops.

    My favourite AML story used to be the now dated case of the Luxembourg Police investigating a noise complaint received from an elderly resident of a block of residential flats and upon calling on the noisy resident concerned found the excessive noise was caused by a commercial money counting machine installed in his flat, this being used for the purpose of counting up the launderers clients ill-gotten cash deposits.

    Best regards

    James

    *From:* I hate money laundering [mailto:comment-reply@wordpress.com] *Sent:* 30 July 2014 10:27 *To:* jamesbarclay@galvan.co.uk *Subject:* [New post] Will that be cash, sir?

    ihatemoneylaundering posted: “About three weeks ago Singapore announced that it is going to stop issuing its $10,000 notes because of “the risks associated with large value cash transactions and high-value notes”, according to the Monetary Authority of Singapore. However, the notes a”

  2. Hi James
    They are both terrific stories – thank you. I shall squirrel them away for use in lighter training moments.
    Best wishes from Sue

  3. Roy McCarthy says:

    Love the idea of the high-value notes being passed around by crims until the music stops with one of them left holding it 🙂 I kinda miss the days of people posting brown envelopes full of notes to strange addresses.

  4. I know: it’s like criminal musical chairs, isn’t it! And I wonder why they always used brown envelopes – perhaps they might have escaped detection if they’d used a nice cream one – tee hee!
    Best wishes from Susan

  5. Nick Gilmour says:

    Lets be assured by one simple thing ‘criminals will find a way’. By the time these bank notes have been returned criminals (organised crime) will be securely entrenched in the virtual world, allowing money launderers to overcome the placement stage because the money (or other values) is already in the electronic form….

    Another great article Sue!

  6. Ah, but isn’t that what makes our (AML) jobs so fascinating and essential, Nick? If things stayed the same, we’d have all the problems solved by now – but with constant change and development, we have to keep sharp. And I’m glad you’re enjoying the blog.
    Best wishes from Susan

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s