Knowing when to know

After a recent training visit to Gibraltar, I was sitting in the departure lounge at the airport.  A woman sat down next to me and – seeing me not reading and assuming that I wanted to chat (actually, I was simply too tired to do much at all) – she asked why I had been in Gib.  Usually I am a bit more savvy and don’t mention the words “money laundering”, otherwise people bend my ear about how unfair it all is when the bank they have been with since Noah launched the ark has asked for a copy of their passport.  But this time – tired, as I say – I let it slip.  “Ah yes,” she said, nodding sagely, “I know all about that, because I used to be an accountant.  Retired now, but I know it’s all much tougher than it used to be.”  I smiled, relieved – I’d got away with it, I thought.  “I’m always having to changes euros into sterling when I visit Gib,” she continued, “but I use the same place every time and although the manager alters the due diligence threshold all the time, the staff know me and tip me the wink so that I can pay in just under it and don’t have to go through the identity rigmarole.”

Thankfully our flight was called at this point, and she trotted off to her priority boarding queue while I didn’t.  As you can imagine, my initial reaction was to rear back (mentally, I mean – too tired to move physically) in revulsion at this idea – that the staff of a bureau de change would warn favoured customers about changing CDD procedures so that they can avoid hassles around verification.  But then I thought about it a bit more, and I wondered whether – in pure crime prevention terms – it really matters.  The point is that the staff in this place know the retired accountant – and presumably would spot any unexplained changes in her pattern of transactions.  What they wouldn’t spot, of course, is any change in her identity information – but they still know her by sight, which is the main purpose of gathering clients’ photographic ID.  Bypassing of internal CDD procedures is not good practice for the firm, and they might come unstuck during a regulatory inspection – or indeed a criminal investigation – but (again, purely from the perspective of preventing money laundering) is it better for this customer to return to the same place every time, where she is known, than for her to be alienated by their procedures and go elsewhere where she is not known?

I have learned one thing, however: when sitting alone, always, but always, hold a book and look really engrossed in it.

This entry was posted in AML, Due diligence and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your 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 )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.