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World Money Laundering Report

As the euphoria of the overturning of a much disliked government wanes, there are several important matters to deal with.

Perhaps the most difficult will be the question of corruption which has been endemic and systemic for many years.

Strangely, the one person who might be credited with kick-starting the widespread rejection of corruption might be the one person who is first amongst those whose conduct will be open to question.

The USA makes a lot of noise about money laundering, etc. and since the early 1990s, it's been at the forefront of pointing out the inadequacies of other jurisdictions while having a surprisingly lax, even holey, regime at home. Let's not forget that there were times when death threats were made to politicians who supported an improved KYC regime and civil rights groups protested in the streets and in forceful terms in the a media that was more than happy to accommodate them. Yes, the USA PATRIOT Act improved matters and there have been incremental improvements but equally there have been serious mistakes. But today is a good day as raft of helpful requirements comes into force under the headline "Customer Due Diligence
Requirements for Financial Institutions." Yet, today is also a bad day: as usual with the USA, it's a half-arsed attempt that falls short of what is actually required.

The news that Australia is to be the latest country to limit, in some circumstances, cash transactions above a certain financial limit has raised some questions. WMLR takes a critical look at some comments.

For the past week, all the news in Australia has been about the huge give-aways planned for today's budget. Every single news broadcast since Thursday has had the story up front and pushed a message that for the first time in years, there is money in the kitty and the government intends to spend it. But the big stories are about tax reform and measures against tax evasion including banning large cash transactions. That's the headline. It's not quite the reality and, as always, a budget speech is a declaration of intent not fully reasoned legislation. Even so - it's a significant move. (edited)

There is suspicion, belief and knowledge. Then there is wilful blindness and, finally, sheer bloody mindedness aka stupidity. A solicitor was warned that her client should be the subject of proper KYC / CDD and her research showed a clear connection to alleged criminal conduct. She went ahead with the multi-million deal anyway and made no suspicious activity report. The fine might seem small and some would argue she should have been jailed but, as the first solicitor to be prosecuted for this conduct, the importance of the case comes not from the penalty but from the fact that it was brought at all, and that it was successful.

Ah, Shreveport. It's one of those picture postcard towns that seems more suited to a Nicholas Sparks novel or a Hallmark TV romance than to intrigue and dirty dealings. But...

The risks to financial institutions, lawyers and accountants presented by their venture capital clients has long been recognised. But what of the risks that venture capital providers face as a result of their investments? WMLR identified a range of risks for both angel investors and those with a full VC involvement.

For the second time recently, a matter before the Solicitors' Disciplinary Tribunal in England and Wales has considered the use of a firm's clients' account for the provision of quasi-banking services. The SDT is starting to impose more substantial penalties and has clearly had enough of solicitors who fail to comply with their obligations under counter-money laundering laws and regulations. Like in the first case, the solicitor concerned is elderly and one might say that he might be considered as having carried on long-standing practices in the face of changing practice requirements and culture.

Aside from giving Digital Currency Exchanges a TLA (three letter acronym) AUSTRAC has sidestepped all the "is it, isn't it?" fuss in so many countries and stated the obvious: because digital currency is "money" in the economists' sense of the word, anyone operating an exchange is subject to the same rules and regulations as anyone operating an exchange in fiat currencies. But here's the surprise: the requirement to register with AUSTRAC and to put in place money laundering, etc compliance and risk management systems comes into force today. And the notice was only published this morning. Moreover, there is an unexpected consequence for the mainstream financial sector.

When assets are frozen, seized, confiscated or, in the case of ships and aircraft, arrested, there is one major difficulty for the lawyers and state bodies obtaining those Orders. . Unlike state sanctions, those obtaining the Orders have no simple route to bring their Orders to the attention of persons, be they individuals or entities, that may be holding assets to which the Orders relate.

Today, with the launch of GlobalKYC by World Money Laundering Report, all that changes.

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