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