Do they have a means form?

As my voluntary service, I work as a magistrate in Cambridge.  And when magistrates are imposing a financial penalty on someone, we always ask for their “means form”, on which they detail their income and outgoings – in short, we want to see how much money they have.  And then we base the fine on that – so, 50% of weekly income, or 100%, and so on, depending on the severity of the transgression.  This means that richer people pay more than poorer ones for the same offence, with the thinking being that the penalty should hurt everyone to the same extent – and levying a fine of £100 on someone who earns £2,000 a month will be far less painful for them than the same fine for someone earning £600 a month.  It’s a good principle, and one I have long championed for money laundering penalties on institutions.

And then I read this little piece on the BBC website, about how Neil Woodford, “one of the UK’s most high-profile fund managers”, has decided to sell his shares in HSBC because of his concerns about “fine inflation”: “Fines are increasingly being sized on a bank’s ability to pay, rather than on the extent of the transgression”, he said – as though that were a bad thing.  Well hurrah I say!  The only penalties that seem to have any effect are the ones that hurt – and this is true in any situation.  For instance, sending your kids to their rooms these days is pointless as a punishment, as most bedrooms now are fully-equipped entertainment centres.  So I’m all for large and painful penalties on institutions that fail to meet their AML obligations.  If, as Mr Woodford predicts, “a substantial fine could hamper HSBC’s ability to grow its dividend”, then so much the better.  Maybe a posse of outraged shareholders (or a a retreat of shareholders, like Mr Woodford) will force recalcitrant institutions to be more vigilant about AML – I don’t care what makes them do it, as long as they do it.

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