I like reliable. I know reliable isn’t exciting, but I’ve always preferred it to unpredictable or ad hoc. And my byword for reliability is the “International Narcotics Control Strategy Report” which is published by the US Department of State every 1 March. Not “the first week of March”, or “Q1”, or “March-ish”, but 1 March, on the nail. I like that.
The INCSR 2016 is a massive tome – well, two massive tomes. The first deals with drugs, which is jolly interesting I am sure, but I turn straight to “Volume II: Money Laundering and Financial Crime”. This is where (among much else) the US publishes its lists of countries that it considers to be centres of money laundering. It lists them in three categories: “of primary concern”, “of concern” and “monitored”. And brace yourself, readers, because we in the UK are in the first category. (And if you’re reading in Guernsey, Jersey or the Isle of Man – and I know you are – you needn’t look so smug: you’re in there with us. And you lot down in Gib: you’re in the middle category.)
So why is the UK “of primary concern”? Well, according to the INCSR 2016: “The UK 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. 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; inbound and outbound cash smugglers; and gatekeepers, such as 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. There are significant intelligence gaps, in particular in relation to ‘high-end’ money laundering. This type of laundering is particularly relevant to major frauds and serious foreign corruption, where the proceeds are often held in bank accounts, real estate, or other investments rather than in cash. Underground alternative remittance systems, such as hawala, are also common.”
If we’re honest, none of this comes as a surprise – we’ve already admitted to much of it in our own National Risk Assessment back in October 2015. But I remain very fond of the INSCR, both for its reliability, and because, sitting there alongside all of us in the “of primary concern” category, is the US itself. I like honest. Perhaps even more than I like reliable. Maybe I should get a Labrador.
It is most reassuring the US have been honest although, as I am reading this from Guernsey, I am slightly disappointed with the summary by the US of our MoneyVal report. They say “while no weaknesses have been identified in the legal framework, concerns remain with respect to the implementation of the money laundering provisions.” Rather a sweeping statement although, pleasingly, they do seem to then qualify this by then discussing the few ML cases and convictions we have had which was the main concern. The UK seem to be treated more fairly although they say the UK should include domestic PEPs for EDD purposes; ironic as I believe (but please correct me if I am wrong) their Bank Secrecy Act still only covers foreign political figures.
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