One of my top reads of the year is, no, not the “Robin Ellis as The One True Poldark Bumper Christmas Annual (with free stick-on dashing facial scar)”, but the “International Narcotics Control Strategy Report” from the US Department of State. I admire the discipline of the operation – it is published every 1 March, come rain or shine – and its honesty. For those of you who are unfamiliar with this tremendous publication, let me explain. It comes in two (enormous) volumes: the first deals with drugs, and we can safely ignore that one, while the second focuses on money laundering and financial crimes – bingo! Within this second volume is an extremely useful table of jurisdictions, which shows whether the US considers them to be of primary [money laundering] concern or of concern, or if they are being monitored. (Incidentally, whenever I slightly mistype ‘monitor’, my spellcheck suggests ‘Minotaur’ – I should imagine being Minotaured would definitely being tears to your eyes and make you long for the halcyon days of being simply monitored.) And featuring in the list of jurisdictions of primary money laundering concern is the US itself – hence my admiration for this report’s honesty.
If you are on the primary list (that means you, dear readers, if you’re in the UK, Guernsey, Jersey, Isle of Man or dozens of other jurisdictions), the report goes into much more detail about why you’re in the hot seat (all very handy info for the MLRO and his list of high-risk jurisdictions). Turning to the exposé of the UK, we can read this: “The United Kingdom plays a leading role in European and world finance and remains attractive to money launderers because of the size, sophistication, and reputation of its financial markets. Observers feel the UK’s current regulatory architecture and the high degree of financial secrecy afforded to directors of British firms also are attractive to global criminal syndicates. Although narcotics are still a major source of illegal proceeds for money laundering, the proceeds of other offenses, such as financial fraud and the smuggling of people and goods, have become increasingly important. The past few years have seen an increase in the movement of cash via the non-bank financial system as banks and mainstream financial institutions have tightened their controls and increased their vigilance. Money exchanges; cash smugglers (into and out of the UK); and traditional gatekeepers, including lawyers and accountants, are used to move and launder criminal proceeds. Also on the rise are credit/debit card fraud, internet fraud, and the purchase of high-value assets to disguise illicit proceeds. Underground alternative remittance systems, such as hawala, are also common.” Ouch. It’s a bit like being Minotaured – but all true.