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How big a
problem is money laundering?
It is impossible to put a figure on
the amount of money laundering that goes on throughout the
world. Criminals do not submit tax returns that
adequately reflect their earnings, and no-one has yet
designed a model that will accurately tell us how much
money is earned through crime each year.
What we do know is that the vast
majority of money that is earned through crime will need
to be laundered at some point. And conservative
estimates say that money laundering is the third biggest
"industry" in the world, with only oil and
agriculture generating more income.
In a statement issued in August
2003, HM Customs & Excise estimated that £25 billion is
laundered every year through the UK. When you
consider that that figure represents the laundering
through just one country in just one year, it is easy to
see that we are talking about seriously large sums of
money.
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Why is money laundering
wrong?
There is a school of thought that
holds that money laundering should not be classified as a
crime - that it is only a bit of clever money moving, and
that no-one is really hurt by it.
However, money launderers are greedy
and ambitious people. If you let them into your
institution, they will soon want more and more from you,
and could well end up in control. There have been
situations where launderers have managed - through
corruption and threats - to take over control of entire
countries.
It is also important to remember
that money laundering allows criminals to keep the money
that they have earned illegally. The crimes they
commit range from the commonplace to the heinous - and you
have no way of knowing which you are dealing with.
If you let the criminals keep their money, you're giving
them all the encouragement and funding they need to get
bigger and nastier.
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Why do
I need to provide anti-money laundering training for my
staff?
Under the law of the UK - and that of many other
jurisdictions - financial institutions (and frequently
others) are required to provide certain
groups of their staff with anti-money laundering
training.
This training should explain what money
laundering is, what the law says about it, what are the
personal obligations of the staff and the corporate
obligations of the institution, how to recognise a
suspicious transaction, and how to report suspected money
laundering. By providing this training, institutions
are complying with the law, and providing themselves with
protection from money laundering by having staff who are
aware of the issues and how to react.
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Can I trust
a small company to deliver the level of service I need?
Thinking about Crime Limited is a small
business - there's no denying it. But this means
that each and every customer is vital to me. I
cannot risk losing your business or damaging my
reputation in the sector I seek to serve, and so I work
as hard as possible to give you the service you need.
This means that I
work until the job is done. My flat rate pricing
structure for training means that the price you are quoted
is the price you pay, regardless of how much preparation
time is involved and regardless of how many delegates you
send to the training sessions - which makes your budgeting
so much easier.
Finally, I really love our
subject. I'm in this business because I can't
imagine anything I would rather do - not because it's
flavour of the month. I'm in it for the long haul,
as they say, and you can count on that. Thinking
about Crime Limited may be small
in size, but it's bigger than most when it comes to quality,
effectiveness and dedication - QED!
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What
is "suspicion"?
Anti-money laundering legislation
and regulations in most jurisdictions refer to "knowledge"
and "suspicion". Knowledge is a relatively clear-cut
concept - it requires certainty. Suspicion, on the
other hand, is a much more slippery customer. The
definition of suspicion is usually thrashed out in court,
and recent cases have looked at this in some detail.
In NJ2 Ltd v Cater Allen (21
January 2006, unreported), Nelson J noted that "suspicion
does not have to have a long history of misdoing before it
arises. It may arise in an otherwise seamless period
of good conduct from one important new piece of
information."
In R v Da Silva [2006] All ER (D) 131
(Jul) (a decision at the Court of Appeal), Longmore LJ said
that the defendant must "think that there is a possibility,
which is more than fanciful, that the relevant facts exist.
A vague feeling of unease would not suffice. But the
statute [in this case, the Criminal Justice Act 1988, now
superseded by the Proceeds of Crime Act 2002] does not
require the suspicion to be 'clear' or 'firmly grounded and
targeted on specific facts', or based upon 'reasonable
grounds'."
In the 2006 edition of their
Guidance Notes, the UK's Joint Money Laundering Steering
Group were of the view that suspicion should have some
foundation, such as "a degree of satisfaction and not
necessarily amounting to belief but at least extending
beyond speculation as to whether an event has occurred or
not".
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Why are
world governments suddenly so concerned about money
laundering?
For years, law enforcement agencies around the world have
expended huge amounts of effort and resources in trying
to bring criminals to justice, and to imprison them.
However, recent thinking suggests that a more effective
and efficient way to deal with senior criminals is to take
the profit out of crime.
The "Mr Bigs" of the
criminal world are almost impossible
to bring to justice, surrounded as they are by layers of
protection and any number of minions who will do the time
for them. What does hurt them, however, is the
freezing and confiscation of their assets - so this is
where law enforcers and governments are now focusing their
attention. In other words, the emphasis has shifted
from chasing the criminals to chasing their money.
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Why should
I be worried about money laundering, when I do not deal in
cash?
The idea that money laundering involves only cash and
banks is a dangerously outdated one. Laundering can be
committed with any sort of value, and through any type of
financial service provider (including professionals such
as lawyers and accountants, who look after client
funds). Money launderers are intelligent, canny
people who are always looking for new ways to conduct
their business. If you think that you are immune to
them, then you are their ideal target - they love the
complacent and the unaware.
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What's all this about
terrorist funding? Is that the same as money
laundering?
Since the attacks in America and Spain, terrorist
funding has been in the world's headlines. It's no
surprise to financial investigators, of course, but it
turns out that one of the best ways to track terrorists -
particularly those who are planning an attack - is by
following the money. Terrorists spend money on
accommodation, transport, supplies, communications and
training, and it can be these unusual patterns of spending
that give them away.
However, tracking terrorist funds is not easy.
"Normal" money laundering involves the processing of dirty
money to turn it into clean money. Terrorist
funding, on the other hand, frequently involves clean
money from the start - money that has been donated or
earned legitimately. In fact, some experts are of
the opinion that terrorists will steer clear of crime to
avoid drawing attention to themselves and to minimise the
risk of being detained before they can commit their
terrorist activities.
Governments around the world have realised this, and
changes are being made to legislation. The
definition of money laundering is being adapted to include
funds that are used to pay for terrorist activities, and
not just funds that are generated by crime. This is
a fast-moving area, so keep an eye on your local
definition of money laundering and its associated
offences.
