Back to school for AML

British public schools have a lot to answer for – David Cameron, BoJo, Michael Gove, rugby – but to this list we can now add money laundering.  I don’t want to claim any glory (well, maybe just a bit) but I’ve been banging on about this for a while.  Our current definition of high value dealers – those who trade in goods for large amounts of cash – is missing a trick that money launderers do not miss: the laundering of cash through businesses that accept cash in exchange for services.  Businesses such as clinics, sporting academies, universities and public schools.  Imagine how simple it is.  You send your child off to school with the year’s fees in cash in his satchel.  Only when the bursar opens the envelope, why, there is ten times too much money!  Apologies, say the parents on being contacted, we have muddled up the exchange rate – those pesky decimal places.  But we don’t want little Egbert spending all that cash on comics and gobstoppers, so please could you just pay it into our bank account – here are the details.  Et voilà, as they say: lots of lovely lolly laundered.

Personally I cannot understand why businesses that sell goods for cash should be expected to do all the AML stuff – due diligence, record-keeping, etc. – while those taking huge cash amounts for services do not.  Surely the key thing is how you’re paying, not what you’re buying.  If you pay by credit/debit card or bank transfer or (dinosaur alert) cheque, at least the money is going through a financial institution somewhere along the line, and there is an expectation (at least in reputable jurisdictions) that some AML checks will have been done by them.

In a recent interview with the Guardian, Ben Wallace (who is either the UK Minister of State for Security and Economic Crime or an American retired professional basketball player, depending on which Wikipedia entry you favour) finally got the idea: “We need to go after the people who have not played their part in hardening the environment and reporting.  So the purveyors of luxury goods, the public schools, the sporting institutions, who don’t ask many questions if suspicious people come along with cash or other activities, we will come down on them.”  In my opinion, such businesses have had enough chances to show that they are on the ball and looking out for dodgy transactions, and they have blown it – now is the time to amend the definition of high value dealer to include sellers of services.

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

One Response to Back to school for AML

  1. Pingback: ‘Dammed if you do | I hate money laundering

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