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.