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!