Data doom and delight

With writing a post once a week only (I’ve fallen into writing longer posts less frequently – hope that’s OK), there’s sometimes a bit of a delay until I get round to dealing with something that’s been in the news.  Personally, I think that’s no bad thing – we’re sometimes too quick to react, and a bit of mulling never hurt anyone.  All of which is a preamble to saying that today’s topic is a set of data that was published on the Politico website on 19 May 2020.  It’s titled “The world’s dirty money by the numbers”, but really it’s looking at the situation in the EU.

Whenever you look at crime stats, the numbers are huge – to the point of being unimaginable – so you can try dividing it until it does make sense.  Apparently money laundering worldwide could total $4.5 trillion in 2020 [I’m guessing these are pre-pandemic estimates for GDP].  So that’s $4,500,000,000,000 in a year, which is $12,328,767,123 a day, or – and this figure is actually possible to grasp – $142,694 a second.

Personally I have no gripe with the fact that only 10% of SARs made in the EU are further investigated immediately, while 90% sit on file in case they’re needed – surely that’s the nature of policing in any field.  But it is interesting to read that we in the UK are the most avid reporters of suspicion – you’re gonna miss us when we’re gone [or maybe not].

I was fascinated to read the reasons behind SARs; as I work so frequently in the Channel Islands, I’m used to “tax concerns” topping the list, but taken across the EU, “fraud and swindling” [great word] runs it a close second.  And who knew that 3% of SARs mentioned “counterfeiting and product piracy” as the suspected predicate offence?

And in these days of contactless payments and cyber-currencies, it seems that criminals are touchingly traditional.  The cops at Europol put it best: “While not all use of cash is criminal, almost all criminals use cash at some stage during the money laundering process.”  Part of the problem for the EU is its ongoing love affair with high-value banknotes, which are rarely seen by ordinary folk but are much hoarded and treasured by criminals.

Finally, it is a little depressing to read that two-thirds of managers with compliance-related responsibilities are hesitant to report suspicious activity externally as “it might sour our relationships”, while 73% say they focus on “box ticking” to be regulatory compliant, instead of actively trying to prevent issues.  And 72% (the same ones? could be…) are aware of financial crime taking place in their global operations in the last twelve months.  Here’s hoping that the Politico number-crunchers update this information regularly, to remind us both what we’ve achieved and how far there is to go.

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5 Responses to Data doom and delight

  1. Mark Cardwell says:

    Completely off topic, but while wandering in the Khazad-dûm of HMRC’s internal manual, I happened upon the following definition:

    “Dirty money is the term given to payments made in some industries to employees who work in exceptionally dirty or unpleasant conditions or in confined spaces, for example in the ship repairing industry. Dirty money is extra pay which is taxable as earnings.”

    • Really? In all my AML years, I have never heard that. Now I’m curious… Do I dare put “hmrc dirty money” into the search box?! Although I have found a company called “Dirty Money Entertainment Limited”… (And not off topic at all – very much on topic!)

  2. patersonloarn says:

    Thank you, this information is very useful to me.

  3. Fraudsters Diary says:

    Another great posting, however, I would add the following (1) Fraud is one of the most underreported crimes of all so the figures bear no resemblance to the reality of the situation and (2) SARS sit in a plie rather than on file so unless they have been analysed they are of no use at all.

    • Welcome to the blog, and thank you for your comment. Yes, the under-reporting of fraud is a major concern, for many reasons. And I must admit that I had thought SARs were processed quickly these days, with being submitted electronically… But if they’re not, then the electronic submission is a waste of time and money!

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