The global system for combatting financial crime is hugely expensive and largely ineffective

Another bank is preparing to face the music over alleged failings in its efforts to curb flows of dirty money. NatWest, one of the UK’s largest lenders, is set to appear in court in London to respond to charges that it failed to properly scrutinize a gold-dealing client that deposited £365m with the bank—£264m of it in cash.

NatWest (which has said it is co-operating with the investigation) is the latest in a long line of banks to be accused of falling short in the fight against dirty money. 

In 2020 global banks were fined $10.4bn in penalties for money-laundering violations. This is an increase of more than 80% on 2019. 

In January, Capital One, an American bank, was fined $390m for failing to report thousands of suspicious transactions. 

Danske Bank is still dealing with the fallout of a scandal that erupted in 2018. Over $200bn of potentially dirty money was washed through the Danish lender’s small Estonian branch while executives missed or ignored a sea of red flags.

Closer examination suggests that the global anti-money-laundering (AML) system has serious structural flaws, mainly because governments have outsourced to the private sector much of the policing they should have been doing themselves. 

Read the full article on The Economist HERE

Citadel Advantage’s Principal Associate in Indonesia

Pictured on the left is one of Citadel Advantage’s Principal Associates, Richard Barr, “in action” at the Indonesian central Bank in Jakarta. Richard was there recently as a member of the United States’ Financial Services Volunteer Corps (FSVC) team.

Since 2014, FSVC has been working with the central bank of Indonesia, Bank Indonesia (BI), to strengthen its capacity for anti-money laundering/combating the financing of terrorism (AML/CFT). Indonesia's porous coastlines and geographic location pose specific money laundering and terrorist finance threats. Improving financial integrity by eliminating such threats encourages foreign investment and fosters a safer and more secure environment for citizens.

FSVC, with support from the U.S. Department of State, most recently conducted a workshop for staff members of BI's National Payments Division. The workshop covered basic AML/CFT principles, but focused specifically on money laundering/terrorist finance threats posed by payment products such as mobile money transfers and credit, debit and pre-paid cards. These products are commonly used to promote financial inclusion throughout Indonesia but require additional AML/CFT supervisory considerations. The workshop also addressed several key issues pertaining to unregulated money remittance providers, an increasing area of concern for regulators in Indonesia.