Why oligarchs choose London for their dirty money

Britain is one of the best places in the world to launder dirty money. Our new film tells you why—and asks whether that's likely to change.

Why is identity important in financial services? - Decoding: Banks - Episode 5

From 11:FS. There are one billion people globally who can't prove their identity. That's a big problem for accessing financial services. Banks need to know your identity for a number of reasons. It helps them to combat money laundering, which they spend £28.7bn on every year. So you know they're not messing around. But why else? What is KYC? And does financial services have an identity problem?

Podcast “American Kleptocracy”

Casey Michel with the Hudson Institute's Kleptocracy Initiative joins the podcast for a very lively discussion about his new book, American Kleptocracy: How the U.S. Created the World’s Greatest Money Laundering Scheme in History. Casey discusses America’s role in the problem of global kleptocracy and shares some optimism about the path ahead.

To listen click HERE. 

"Thieves of State": Sarah Chayes on Afghanistan

Afghanistan is in the new once again. With the lightning collapse of the Afghanistan Government and the return of the Taliban we offer you a replay of this podcast, originally published in June 2017 on Bribe, Swindle or Steal.

Sarah Chayes, author of Thieves of State, draws on her time in Afghanistan to explain the systemic corruption that contributed to the rapid crumbling of the state. 

Click HERE to access this Podcast.

Bribe, Swindle or Steal explores the world of financial crime—corruption, fraud, money laundering and sanctions—and what motivates people to break the law, how wrongdoers cover their tracks and what can be done to put a stop to the looting through interviews with experts in the field.

Moneyland, Kleptopia & On Corruption - How the corrupt operate

Oliver Bullough, Tom Burgis and Sarah Chayes, authors of three of the best books on global corruption, gather for a panel at the Annapolis Book Festival for a fascinating discussion about how the corrupt operate, often with impunity, and what can be done to slow the pace of looting.

March Webinars from Compliance Online

Compliance Online, the largest GRC network, offer a comprehensive range of Banking & Financial Compliance Webinars.

Check out their March program. For details click on the program title.

REGISTER NOW!!

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2 March 2016

Guidelines for Performing a Corporate Wide Internal Audit Risk Assessment - Marna Steuart

4 March 2016

NACHA Operating Rules for Stop Payments and Unauthorized Entries - Donna K Olheiser

Report Writing for Auditing Professionals - Phil Vassallo

Implementing Operations Risk Management within an ERM Framework - Mario Mosse

9 March 2016

Foreign Exchange Hedging for Corporations - Jonathan Wetreich

10 March 2016

Third Party Vendor Risk Assessment for Financial Firms - Rules, Regulations and Best Practices - Lisa Marsden

AML Investigations and SAR Preparation - Armen Khachadourian

15 March 2016

Cyber Attacks, Incident Response Checklist, Testing & Resources - Beyond Disaster Recovery - Rayleen Pirnie

17 March 2016

Bitcoins - Fear, Uncertainty and Doubt (FUD) -  Ray Graber

18 March 2016

Risk Management - Best Practices, Roles and Responsibilities, Types and Preventives, Case Studies - Robert Geary

 

Understanding Money Laundering

By Stanley Epstein

Money laundering is a subject that often is misunderstood by the general public.

The goal of many criminal acts is to generate a profit for the individual or a group that carries out the crime. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. Once successfully processed it enables the criminal to enjoy these ill-gotten gains without jeopardizing their source.

When a criminal activity generates substantial profits, the individual or group involved must find a way to maintain control the funds without attracting the attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

Through money laundering, these assets can be ‘washed’ so that they appear to have a legitimate origin enabling them to be retained permanently or recycled to fund further crimes.

Money laundering got its name from a string of laundries that the Mafia used in the United States as a front for their illegal business.

Just as soap and water are used for cleaning clothes money laundering uses a three phased process of ‘placement, layering and integration’ to ‘clean’ these illegal proceeds or ‘dirty money’.

Money laundering may look like a polite form of white collar crime, but it is the companion of brutality, deceit and corruption. The process deprives governments of tax revenues, thereby raising the relative burden of honest citizens. Because of rapid movements of large amounts of money, normally stable financial institutions can become undermined, threatening the savings and retirement funds of thousands of innocent people.

According to UNODC (United Nations Office for Drugs and Crime) it is estimated that the annual value of money that is laundered globally is between 2% and 5% of global GDP. In cold hard numbers this puts the amount at between US$800 billion and US$2 trillion. This is a really frightening set of numbers.

So how is money laundered? Well, generally a three stage process is used. These stages are called placement, layering and integration. We now look at these in a little greater detail.
 
Placement

Placement is the physical disposal of the initial proceeds derived from the illegal activity. The first step is to introduce cash into the financial system.

The money launderers use various vehicles to do this e.g. deposits, money transfers, purchases of monetary instruments such as travelers’ cheques, bank cheques or money orders, foreign currency conversions etc. They may also use insurance companies, brokerage accounts, credit cards and other financial services to achieve this.

Layering

Layering is the separating illicit proceeds from their source by creating complex layers of transactions designed to disguise the audit trail and provide anonymity.

Layering is like a shell game - many transactions and conversions take place to blur the trail back to the original crime. This may include investments, purchases of goods and services, cashing cheques, using several smaller cheques to purchase a bank transfer and so on.

Integration

Integration is the provision of apparent legitimacy to criminally derived wealth. The laundered proceeds re-enter the financial system, appearing as normal funds.

Integration is the final stage of the money laundering process. This is when the criminal re-introduces the funds into the legitimate economy with an apparently legitimate origin. Examples include investing in a company, purchasing real estate, luxury goods, etc.

The fight against money laundering

In recent year there have been a number of new developments in the global financial system that have made combating money laundering much more difficult.

These difficulties have been fueled by issues such as ‘dollarization’ (i.e. the use of the US dollar in transactions), black markets, the general trend towards financial deregulation, and the creation of new havens of financial secrecy (though the latter is today being shrunk by a huge international effort to curb tax evasion).

Why is the UK’s anti-money laundering system being seen as "woefully inadequate"?

Britain is being used to wash billions in dirty money — and banks are blocking moves that could crack down on it

From Business Insider –

“Britain's "woefully inadequate" anti-money laundering system has left the country wide open to corrupt money and terrorism funds and needs radical overhaul, a leading anti-corruption group said on Monday.

Each year billions of pounds of dirty money flow through Britain, but the system for identifying it is too fragmented and unaccountable to be effective, according to a report by Transparency International UK (TI-UK).”

Read more>>

Banks did not do enough to police FIFA transactions, says global agency

From Business Insider –

“A global group of government anti-money-laundering agencies said that financial institutions have not done enough to police suspicious financial activity by officials at soccer’s global governing body FIFA, and cautioned banks to step up scrutiny.

The warning from the Paris-based Financial Action Task Force came in the wake of last month’s indictment by the U.S. of nine current and former FIFA officials and five business executives on a series of corruption charges, including bribery, money laundering and wire fraud.

With the U.S. investigation continuing to widen, and a separate Swiss probe gearing up into whether there was corruption involved in FIFA’s awarding of the hosting rights to Russia and Qatar for the next soccer World Cups in 2018 and 2022, the warning will add to banks’ concern about handling certain soccer accounts for organizations and individuals.”

Read more>>