The global anti-money-laundering system relies on the private sector to weed out dirty money. The study shows this “risk-based” regime to be broken
Banks and corporate-service providers barely differentiate between clean and risky clients
.But to what end? The book’s authors are putting the finishing touches on a study that suggests little has changed. The banks and corporate-service providers (CSPs)—firms that set up companies for others—meant to be in the front line of the fight against financial crime do a terrible job of differentiating between legitimate would-be clients and those waving red flags.
The three academics behind the study—Jason Sharman of Cambridge University and Daniel Nielson and Michael Findley of the University of Texas at Austin—undertook what they call a “mystery shopping expedition”. They registered shell companies with varying risk profiles and then sent more than 30,000 emails to banks and
CSPs in every country of the world to set up bank accounts. The riskiest-looking of these brass-plate firms were domiciled in places with a high corruption risk, such as Papua New Guinea or Pakistan. The safest-looking were from Australia or New Zealand. In between were shells from havens of offshore secrecy like the British Virgin Islands. In some missives the authors and their team posed as legitimate businessmen; in others as dodgier-sounding supplicants or actual miscreants, such as people on sanctions lists. headtopics.com
The global anti-money-laundering () system that has evolved since the 1980s under the Financial Action Task Force (FATF), a multilateral agency, relies heavily on the private sector to weed out dirty money. Banks must follow “know your customer” rules and identify a would-be client’s real, or “beneficial”, owner.
This “risk-based” regime is broken, suggests the study. The authors found that the varying risk profiles made “almost no difference” to banks’ willingness to open an account;CSPs were even less sensitive to risk. (One Singaporean bank, however, deserves credit for smelling a rat, replying “Hey, you’re the Global Shell Games guys!”)
The study shows that the grunt-work ofAMLis being “pushed onto a private sector which can’t or won’t do it,” says Mr Sharman. “Banks are unable or unwilling to make the fine-grained risk judgments the system demands, because they use standardised, generic procedures.”
Although the conclusion fits broadly with previous research by the authors, Mr Sharman says he was surprised by the level of risk-insensitivity, because “some of our approaches were ridiculously dodgy”. Other experts will also be taken aback: scholars surveyed by the authors before they went shell-shopping predicted that the study would show the system to be working much better than it was before the transparency reforms of the past five years. headtopics.com
TheFATFknows the system is far from perfect. Last year its chief, David Lewis (who has since resigned), admitted that nationalAMLlaws were rarely being used effectively. He also implored bankers to “stop just ticking the boxes”. Even before this study the agency was reviewing its approach. More than tinkering is in order.
■sign up to Money Talks, our weekly newsletter. Read more: The Economist »
‘Spider-Man: No Way Home’ Trailer Unleashes a Multiverse of Villains
Tom Holland surprised fans at a launch event in Sherman Oaks, Calif., where the mood was electric.
👿 bern_blotz Es un Escandalo de alli sale Azufre& Pus Miles de Millones de Euros& Dolares&Lavados de Activos....Pero quien Denuncia penalmente?Nadie pura poesia Porque le tienen miedo a Wall$treet& Bancos& Banqueros& Empresarios Lavadores de activos Desde hace mas de 80years...🐀🐀🐀🐀🐀🐀. Certainly not the honesty or sophistication of journalism! The overwhelming majority of offshore finance carries on perfectly vanilla and anodyne but nowhere is this discussed. It’s in no way at all “secret”. No, a false narrative is peddled by media for £ and for propaganda.
Pandora Paper is U.S. government filtered propaganda (and blackmail material) and lack of names of U.S. billionaires n corrupt politicians in the provided material. That's a Devine Comedy (hilariously outrageous) to expect firms that set up offshore shell corporations to also act as a 'first line of defense'.
Who cares ? Money makes the world go round ! Spelling. The spelling of the name of the scandals have changed. That’s it. Every thing is happening under the supervision of FATFNews If it wasn't for brave, ballsy whistleblowers we wouldn't know virtually anything of the underhand business that the government gets up to on the quiet.
Anti money laundering 🙄 Come up with a better term. Take the case of India, no money came in our government Exchequer. It is all sham No hope 💬 We demand safety of Bangladeshi Hindus.✊ SaveBangladeshiHindu SaveHinduTemples SaveHumanRights SaveBangladeshiHindus BangladeshiHinduWantSafety SaveBangladeshiHindus BewareHindu SaveHinduBoys SaveHinduGirls SanatanaDharma BlackdayDurgaPuja2021 PleaseStandWithHindus
Plot Twist: ‘Outer Banks’ Was Not Actually Filmed in the Outer BanksEverything is a lie.
Did the study include a fox and a hen house? ¯\\_(ツ)_/¯ They are aren't looking for it. They are keeping their money and coming after everybody else's money. Bank Transactions $600 Your clients can breathe more easily.
As yields rise, some U.S. banks shift cash to TreasuriesSome big U.S. banks are buying more U.S. government securities as yields start to rise and the Federal Reserve appears ready to taper its bond-buying program - a balance sheet shift that analysts say could boost bank earnings by several percentage points depending on how they play their hands.
U.S. banks see wealth management boom on borrowing, new assetsBig U.S. banks' wealth management businesses put in another stellar performance in the third quarter, buoyed by record levels of new money flowing into accounts and surging demand from clients to borrow against their investment portfolios.
Here's how much 10 big banks have cut their China growth forecastsMajor investment banks cut their predictions for China's 2021 GDP, warning that power cuts and a slump in the property market may drag down growth.
This quarter will be inflection point for banks: RBC's CassidyGerard Cassidy of RBC Capital Markets joins SquawkStreet to discuss big bank earnings: 'The numbers that have been reported have been very strong.' SquawkStreet We are not afraid of dirty mullahs Reactionary Globalist islamists communists etc Every nation should take advice from history That any nation that wants to live with pride must be ready to sacrifice its lives & sacrifices. King Pahlavi II
All the hidden meanings behind Adele's new single Easy On Me unveiledAdele has just dropped her new single, Easy On Me, for the first time in six years - and the hidden meanings behind her lyrics have been revealed