Standing my AML ground

Money laundering and I – or rather, AML and I – have been on intimate terms for more than two decades now.  The muscle memory in my fingers is such that I cannot type the word “money” without following it with “laundering”, and almost any word beginning with a capital M ends up as “MLRO”.  I feel rather protective of AML, even maternal towards it.  We’ve been through a lot together.  We weathered the storm in 2005 when the Third European Money Laundering Directive allowed that upstart, that impostor, that johnny-come-lately terrorist financing to have equal billing, so that all of a sudden everyone wanted to talk about some hybrid creature called AML/CFT (and sometimes AML/CTF – even uglier).

But recently things have Gone Too Far.  As I have said in earlier posts, the new AML legislation in the UK has the most ghastly name: the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 – so that’s someone else muscling in on AML territory.  And in Guernsey they are now talking of renaming the MLRO as the FCRO – Financial Crime Reporting Officer.  The cuckoo in the AML nest.

I am often asked whether I can deliver training on “financial crime, including money laundering, corruption, tax evasion, cybercrime and so on”.  To me, this makes little sense.  Money laundering is not a financial crime: it is the financial crime.  All of the others are simply crimes that generate money – with some of them doing it by abusing financial institutions.  Once the basic crime is committed – whether it’s drug trafficking or bribery or cyber-fraud or art theft  or tax evasion – the criminals proceeds are then available for the main event: money laundering.

Money laundering is not like other crimes: it is not done to make money, but rather to preserve and disguise money from other activities.  (Granted, there are a few professional money launderers who make their living from money laundering, and when we consider how to prosecute them – for laundering the proceeds of laundering – it’s something of a legal minefield.)

So please: let’s restore money laundering to its rightful place as the financial crime supreme, the one that touches every other acquisitive crime.  Demoting it to the status of a standalone crime, just something else that can be done to make money, downplays its importance, its spread and its danger.  AML for one, and one for AML!

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2 Responses to Standing my AML ground

  1. Robert Long says:

    Plenty of people do make money form money laundering though. If it did not generate a profit, my life would be considerable easier.

    I think I posted before that there is a trend inside my community to see almost anything a criminal does with money as money laundering, that instead of the old three stage model of placing, layering and integration we focus on what is being done with the money. The “raising” of funds, moving etc. I think this in turn has changed how we see what I sall call “crimes with money” or directly involving money (fraud, bribes etc. obviously most crime involves money at some part) as all part of money laundering, even as we recognise that the term is money laundering can’t cover all the things we now ascribe to it.
    So we just started talking about financial crime instead. It works in LE since many enforcement officers have limited interest in the less, shall we say, physical exciting crimes (they watched TV shows where they were screaming round London catch armed blaggers, not sitting at desks working out how this trade imbalance actually represents drug cartel money), they want to leave all that money stuff (all of it, fraud Money laundering etc) to the professionals. If we call the ML teams Finical crime teams they will have to take those jobs. So now we have anice neat box that has all those tricky crimes in.

    Which in turn will feed back how we report to governments on these issues. Our reports will be titled “A review of Financial crime” or similar. That is bound to have a influence.

    More optimistically I think it is a very good idea to remind private enterprise that they have a role to play in combating wider fiscal malfeasance. Given how many of the moan about having to do any AML and employ anyone in that capacity, it is probable a bit much to expect them to have separate departments/officer for each individual crime (that and they will miss things if all the relevant data is not in the same spot.)

  2. A very interesting take on the issue. Robert – thank you. I can see the sense in what you say.

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