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World Money Laundering Report

A post on LinkedIn recently * says "In the line of duty as a Compliance, I always said to my friend and subordinate; "Never ever say can not until the regulation really declare can not"."

Is this a safe policy?

The perception of car theft is that it is, mostly, someone stealing a car to get home after the trains have stopped running or as a getaway car for another offence. It may be that a car is stolen and used by the thief, or someone else, to run around town with the number plates being replaced from time to time to match those of a similar make and model which is legally taxed and insured, so in effect duplicating the identity of a similar car. But there are other offences and they are a lot more lucrative and, surprisingly, performed in a far more sophisticated way.

It's pathetic: according to a report in The Law Society's Gazette, the official publication of the Law Society of England and Wales, "The Legal Sector Affinity Group, whose members include the Law Society and Solicitors Regulation Authority, has told the Treasury that a ‘sensible supervisory approach’ to the new regulations would give firms and individuals time to adjust to their new obligations." Apparently the membership body and the regulator haven't had time to prepare their Guidance. Too busy with finding new crazy obligations to impose on an already over-stretched profession, one might conclude.

The Australian Securities and Investments Commission (ASIC) and Queensland Police Service (QPS) have worked together to identify those with criminal histories and continued connections with suspected criminal activity who also hold company directorships, including directorships of private companies: then ASIC has removed them from their boards. The action is designed to limit the use of corporations in the commission of crimes, including money laundering.

US TV carrier Dish Networks is popular for its service and incredibly unpopular for its business practices. US States have been putting the company under pressure for a decade and still it fails and ends up paying whacking fines. At the heart of its problems are these issues: collection, validation and use of internally generated data, use of externally generated data, balancing commercial needs with regulatory demands, all things that are the daily diet of Financial Crime Risk Officers in financial institutions and other businesses affected by money laundering, terrorist financing and bribery/corruption issues.

Nigel Morris-Cotterill suggests that banks and others who terminate e.g. correspondent banking relationships and customers' accounts saying it's because of de-risking might have another option: mentor them to get it right.

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Nigel Morris-Cotterill is one of the world's most experienced counter-money laundering strategists. www.countermoneylaundering.com.
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Every so often, Bitcoin hits the news because a criminal gang is using it for some nefarious purpose. We examined BitCoin in a special issue (see here) in 2013. It was not our first look at virtual currencies: that was way back in the mid 1990s, before we even launched World Money Laundering Report, and we've kept a watching brief ever since. Here's the current scary stuff.

Long long ago, there was a phrase circulating among money laundering investigators that in every money laundering scheme, there is a lawyer. The Financial Conduct Authority, in an action in the Central Criminal Court, has proved that you can't run a property fraud unless someone is doing the paperwork and, in the UK, that's likely to be a solicitor.

We have identified illegal copies of World Money Laundering Report publicised on YouTube, a Google / Alphabet company via a link to a domain difa.us which is registered behind an anonymous e-mail account. When we looked further into the circumstances we found illegal copies of the works of a number of other publishers of professional material including Lexis-Nexis posted under several apparent aliases.

For decades we have been told that we should address everyone by their Christian or first name, even if we have never met. In the past ten years or so, we have been subjected to the constant diminishing of the term "Friend." It's time to stop this and to return to a world where there are boundaries and where everyone knows where they are. And more, it's time to return to formality in business correspondence and, most importantly, to start to show respect for each other instead of a presumption of homogenisation. Why? Because we need healthy scepticism not blind acceptance of everyone and everything.

Yesterday, the USA named several people under the OFAC Specially Designated Nationsls "SDN" list. They are all PEPs in Venezuala so they have gone from "be careful with.." to "don't touch."

One might imagine that, in a post-11 September 2001 world, The Americas would be the worst place that anyone could use an aircraft for illegal purposes. But it's not so. The skies remain friendly to drug dealers for whom aircraft are a tool of choice.

Just how much money can a group of tourists hide in their socks and knickers, plus a variety of other methods of concealment? It's far more than you might think.

Continuing our analysis of AFP v Ganesh Kalimuthu & Anor

For part one see here

The case is said to be on its own facts but the Court was not invited to consider all the relevant facts. It is therefore a narrow judgment. It is a precedent but it is not a comprehensive precedent and creates an open door for international transfers of large amounts of money with impunity.

The facts of the case of Commissioner AFP v Ganesh Kalimuthu & Anor [2017] WASC 108 are superficially simple but that simplicity belies a state of affairs that is not at all straightforward. It involves cross-border payments, the use of an unlicensed money transmitter thinking him to be licensed but which turned out to be a hawala-style transaction of the sort that criminal gangs developed in the Philippines to facilitate expatriation of proceeds of illegal gambling. Now someone has given it a name - the especially stupid name of "cuckoo smurfing." The AFP made a logical decision to freeze moneys but the logic has been defeated by the Court. WMLR looks at the case which, at least in part, is a reflection of the dreadful drafting of Australia's Proceeds of Crime Act 2002.

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