Credit where credit is due

I’m about to get onto my soap-box again, so you have been warned.  Last week I mentioned the recently-published INCSR 2016, with its summaries of jurisdictions of primary money laundering concern.  In a comment on that, a Guernsey reader has pointed out – quite correctly – that her jurisdiction is often lambasted for not getting enough money laundering convictions.  This is indeed the case: the number of money laundering convictions in Guernsey and Jersey and the Isle of Man and Gibraltar is lower than you might expect, given the financial busy-ness of these places.  But there is a good reason for this, and it’s certainly not that those places are no good at investigating and prosecuting money laundering.

As it is the example that was raised, let us consider Guernsey (although the situation is similar in those other places I mentioned).  Anyone who has read the crime reports in the Guernsey Press knows that local crime rates are wonderfully low; my favourite ever headline was “Car aerial bent in Town”.  As a result, the chances of a major money laundering scheme originating in Guernsey are quite slim; it tends to be used for layering or integration rather than placement, if you will.  Nonetheless, the money laundering investigators in Guernsey, working at the Financial Intelligence Service, are really rather good at their job.  In particular, they are very helpful to other jurisdictions who often contact them to ask about suspected dodgy money that has passed through Guernsey at some point.  The FIS leaps into action and sends the requesting jurisdiction all sorts of juicy and handy information, not least because the AML regime in Guernsey is jolly efficient, and Guernsey regulated businesses collect plenty of customer due diligence information and regularly make informed and detailed reports of suspicion.  Joy and delight: a money laundering conviction is secured, and a filthy, dirty money launderer is punished.  But – and here’s our problem – this conviction does not go on the Guernsey tally, but on the tally of the requesting jurisdiction (often my own).

In the grand scheme of things we really shouldn’t care: as long as the FDML is locked up, it really doesn’t matter where.  But when evaluators like MONEYVAL or the FATF come calling, they do look at the bald conviction statistics.  Perhaps there could be a “credit” system instigated between jurisdictions, such that any FIU that contributes to a money laundering conviction secured in another jurisdiction is given a tick that can be shown to evaluators as proof of their understanding of, commitment to and participation in money laundering convictions.

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

4 Responses to Credit where credit is due

  1. David Maxwell says:

    Dear Susan
    While I agree with the main point of this post, I’m not comfortable with the logic behind your contention that because crime rates are low in Guernsey, the chances of money laundering schemes originating there are slim.
    I think you’re on much firmer ground where you state that it is the role Guernsey might play in money laundering scheme that means it is more likely to be involved in the layering and integration phase, rather than the placement stage.
    Regards
    David

  2. Dear David
    I think what I meant was that there is little large-scale acquisitive crime in Guernsey which would lead to local criminals having to place their proceeds into the local financial system; I take it that you are talking about more complex crimes where the money is pinched from an account/structure domiciled in Guernsey. And you’re absolutely right: Guernsey is certainly not immune to that. Many thanks for the clarification.
    Best wishes from Susan

  3. Robert James Long says:

    Hmmm.
    I suspect that Guernsey may be home to more than a few “Proffessional enablers”. Prosecuting them might up the tally a bit.
    Of course you have the same issue the city of London faces, that is if the industry is that important to overall economy, can you not tolerate a few, shall we say mavericks rather than prosecuting them and giving a impression which might drive investment out.

  4. You might very well think that, Robert; I couldn’t possibly comment.

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