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World Money Laundering Report

In the 2017 Tax Reform Bill, two major changes to the corporate tax structure will mean Financial Crime Risk Officers will need to scramble to understand how to handle US corporations and to re-write systems, says Nigel Morris-Cotterill. Christmas holidays are at risk if financial services businesses and advisers are to be ready for the new rules many of which will come into force on 1 January, even if PoTUS Trump has not signed the Bill into law by that date.

US President Trump has been looking for a win: for almost a year, the Senate has frustrated his legislative ambitions. His Bill to make fundamental changes to the USA's income and company tax structure was expected to be the next big failure. Instead, it has sailed through both Houses, but its final signing into law will be delayed due to "a procedural issue," although the result of that is a formality in favour of it being passed. Once in place, it will mean the biggest revision of the US Tax Code for more than 30 years. Some of the changes mean that MLROs etc. overseas will need to revise their policies.

Closed registers of shareholders and directors of companies, and company registers where the identity of shareholders and/or directors are not collected, have long been recognised as vehicles for financial crime. However, while governments are anxious to trace moneys relating to tax evasion (and, for political reasons, tax avoidance), to say nothing of money laundering and corruption, there are, in some cases, valid reasons for maintaining secrecy. As babies are, en masse, being thrown out with the bathwater, it's worth remembering what those reasons are.

It seemed like it was all over bar the shouting, or to be more precise, the haggling. Commonwealth Bank of Australia, CBA, admitted to the vast majority of the almost 54,000 failings listed in the civil penalty proceedings and in doing so entered what amounts to a plea in mitigation. AUSTRAC's response? To immediately file a further 100 allegations. That's just hostile litigation tactics and bordering on the malevolent, writes Nigel Morris-Cotterill, a former litigator.

The USA bangs on about how good its counter-money laundering laws are (they aren't) and New York State attacks foreign banks for failures on its soil (whilst ignoring breaches by US headquartered banks). Yet by its own admission (albeit unthinking), New York is far behind good practice in relation to company registrations. In fact, it's a secrecy jurisdiction that also facilitates confusion as to corporate identity and allows the hiding of both legal and beneficial ownership which benefits money laundering and terrorist financing.

There's a huge amount of money spent on financial transaction monitoring software but there is something that costs nothing but a bit of time and the application of knowledge that can identify suspicious activity before the money hits the bank. Welcome to the world of anti-spam filters and they are cheap or free.

Regulation
Policing
Impact on the conventional sector

"No head-scratching and audible sighs of relief as knickers become untwisted. "

Interacting with a blockchain

How Ethereum demonstrated the benefits of blockchain-based currency for financial crime reduction.

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