I loved being a university student. I liked pedalling around on my bike, modelling my road positioning, arm signals and indeed wardrobe on those of Miss Jean Brodie (in her prime, gels, as the first two minutes of the movie will demonstrate), and kidding myself that reading books all day long was Real Work. It was fabulous, and an experience entirely wasted on the young. However, the potential of tertiary education facilities for money laundering has not been wasted on criminals.
I have written before (here and indeed here) about the dangers posed to the private school sector by those seeking to pass their dirty money unnoticed through the financial system, but any educational establishment that takes payment for fees – from a private nursery to a college or university – is at risk thanks in no small part to their naivety. In any jurisdiction whose legislation derives from the EU Directives, the obligation is to ensure that the AML family includes “high value dealers” – those who trade in goods for cash. Notwithstanding the recent slight expansion to include “art market participants” (“[anyone who] by way of business trades in, or acts as an intermediary in the sale or purchase of, works of art and the value of the transaction, or a series of linked transactions, amounts to 10,000 euros or more” – therefore covering any form of payment), the current definition of a high value dealer still leaves enormous gaps in the AML defences. What about those who sell services for cash, such as, oh, I don’t know, universities?
I have sympathy for universities, of course: their raison d’être is to promote excellence in learning and research – not to be on the lookout for scummy little devils trying to take advantage of their bank accounts. But such is the modern world, with those pesky banks asking all their tiresome questions, thereby forcing criminals to be more twisty and imaginative. Thankfully some universities are getting the message, and indeed sharing it with their staff. On one of my recent tumbles down an AML rabbit-hole I fell upon this AML policy from the University of Reading (hah – I told you that university was for reading). Crucially – and unlike many other similar documents I have seen – it doesn’t stop at simply saying “money laundering is against the law – we mustn’t do it”. Rather, it gives good, realistic examples of how – in the university environment – money laundering can occur and be spotted, and what controls have been put in place to guard against it. If you’re involved in education in any way – parent governor, trustee, part-time teacher – I recommend you share it.