Yes, for reasons of marketing and expediency, we fell into line and called our Group “The Anti Money Laundering Network” and we even call part of our e-learning marketing “antimoneylaunderingtraining.com” but the fact is that it’s wrong and in an area where accuracy and precision is important, surely the language we use should aid and assist, even facilitate, clarity of thinking and effectiveness of actions.
Let’s start with the basics, the absolute truth about money laundering.
We cannot and will not stop it. It is all pervasive, it is part of our DNA. It’s part of that DNA that isn’t even human: animals hide their food using a variety of techniques to protect it. It doesn’t matter what we are protecting it from: it’s being protected so that it is available later.
Money laundering is bad for society because it allows criminals to benefit from their actions which are against part or the whole of society. In principle, a thug who steals the pearls from an old woman’s neck is no different to someone who breaks into a house and steals cash or someone who convinces people to give them money under false pretences nor, even, who induces them to make bad investments from which he will in some way benefit.
There is a hackneyed phrase, first used, so far as I recall, in the late 1990s when the UK was preparing for laws that would allow the confiscation of assets derived from criminal activity. That phrase is “taking the profit out of crime.”
It would be nice. And there are periodically successes, just as in the world of drugs and weapons and people trafficking there are successes but, in the wider context, those successes do not make much of a mark on the industry as a whole, even if they do result in the so-called “take-down” of a particular gang.
The fact is that almost the entire effort relating to combating money laundering relies on criminals embarking on their money laundering schemes.
At that point, it is no longer about the money: it’s about information and specifically, about information flows through choke points.
Aside from the crime reduction objective, governments have three objectives:
1) identify the assets and confiscate them
2) identify the criminals involved in the scheme back to the person who committed the original crime and
c) tax the proceeds in addition to confiscating them.
So, governments are not “ANTI” money laundering.
Far from it: they are dependent on it for all the information that is collected by banks and all those in the regulated sector. They are looking not to prevent money laundering but to prevent successful money laundering. In this way, they are, properly, “COUNTER” money laundering.
They are REactive not PREactive.
The sad thing is that, when European governments (not only those in the EU) were developing their policies and legal frameworks in the late 1980s, they used the correct term of “counter-money laundering”.
Then, along came the American juggernaut and with it the USA’s unerring ability to use the wrong word or phrase out of a choice of two, a change was made.
After all, they chose “billion” when they should have chosen “milliard” and now the rest of the financial world dances to that illiterate error.
And they made up “hawalas” because they were too (think of an adjective that explains the irrationality of creation rather than research) to learn that the correct word is “hawaladar.” And it’s at least a couple of thousand years old.
All of this means that those who are coming into the field have been taught a mistake.
They think efforts are to prevent money laundering when, in fact, they are to control it.
That is a vast and vitally important difference.
It is a difference which most policy makers, and apologists, are either unaware of or intentionally evade.
It’s time to put it right and to properly educate those coming into the industry.
AML is dead, it just doesn’t know it yet because so many lemmings keep saying it without any comprehension of what it actually means.