Billions of dollars are wasted each year trying to prevent ‘dirty money’ entering a financial system that is already awash with it. The authors challenge the global approach, arguing that complacency, self-interest and misunderstanding have now created long-standing absurdities.
International and government policy makers inadvertently facilitate tax evasion, corruption, environmental and organised crime by separating crime from its root cause. The handful of crime-fighters that do exist are starved of resources whilst an army of compliance box-tickers are prevented from truly helping. The authors provide a toolbox of evidence-based solutions to help the frontline tackle financial crime.
laundering and the people involved. It is also challenging to understand how such meaningless publications, statements and those watered-down case studies can still be allowed to reflect demonstrable proof in leadership across AML/CFT compliance and/or financial intelligence. The knock-on effect All this regurgitation of common sense means that money laundering, again as the guidance material will have us believe, fits a three-stage process of placement, layering and integration. Yet, critically, this is a model that has not been updated since it was first
three-stage process of placement, layering and integration to describe greater and greater distance from the predicate crime. This has led to many, many people thinking that money laundering is complicated. We agree that the definition is complicated, but not the act of money laundering. In the other half of the dirty money army, criminal lawyers produced a quite simple definition and showed how easy it was to identify and prosecute dirty money – which they defined as ‘any property derived from or obtained, directly or indirectly, through the commission of an
make the illicit value usable . Dirty money, which is money gained through crime can never be made clean – despite the word laundering implying that when it comes out of the three-stage process of placement, layering and integration it is then somehow clean. Equally there is no need to hide the illicit value, because if it is hidden, how can it then be spent? It is the change of appearance where money laundering is most effective. Although there may be many definitions of money laundering, the principles are always the same: illicit money should appear clean so
leadership strategies and skills. The AML regime has enormous resources, but they are pointing in the wrong direction; we need to move from ‘prevention’ to ‘enforcement’. So how should we do it? The definition of money laundering as ‘placement, layering and integration’ is misleading and obstructive. It should be scrapped and replaced by the United Nations’ Conventions wording: ‘The acquisition, possession or use of any property derived from or obtained, directly or indirectly, through the commission of an offence.’ 1 In this way the AML regime of each country
cash or recognising obvious strange behaviour. If prevention is to happen, there need to be efforts to identify the activities surrounding transfers and purchases. We do not believe money laundering is a three-stage process of placement , layering and integration , nor is it a practice that can be separated into typologies. We see money laundering as transfers and purchases that are equivalent to those happening each day across the globe. They are managed in such a way as to appear no different to those that are for non-illicit purposes. If the world is
, layering and integration; they do not use the words ‘money’ or ‘laundering’ either. The fact that there is neither ‘money’ nor ‘laundering’ in any money laundering definition matters; the term is misleading, and people put their own interpretation on the words. If you want to understand what journalists and expert commentators are really saying, read on. Our bluffer’s guide to the jargon of dirty money comes next.
