In 1994, when I first started in money laundering risk and compliance, one of the messages I had as a tag line so people remembered the lessons was ″you can’t be a little bit suspicious like you can’t be a little bit pregnant.″
It’s an on-off switch, not a dimmer. It’s a gas cooker on full or nothing at all. The law does not provide for any graduated approach. It does not provide for vacillation. It’s simple: if there is any suspicion, the report must be made or you face prosecution.
Yet today we see people again referring to the “quality of submissions” and so over time have many others but the simple fact is that there is no protection for a reporting entity if it decides that information was not of sufficient quality and therefore does not submit a report. And it’s the same for staff and compliance officers and, even, directors who have individual responsibility.
While some regulators may provide some saving, that has no express impact on the application of the criminal law.
Making reports is a form of protection. Not making reports means there is no protection.
Furthermore, it is not for individuals within reporting entities to know whether the data they have may have value when added to data that may, or may not, already be in the hands of the FIU or may come into the hands of the FIU in the future.
The reporting entity – and its officers or partners – are always open to being second guessed and, therefore, of prosecution or regulatory action if they do not submit reports where suspicion exists or where, in the future, a court may decide that reasonable cause for suspicion existed and the individually was wilfully blind.
The solution cannot be to leave such discretion in the hands of reporting entities: it’s difficult enough to get them to submit reports even in the current circumstances.
By adding discretion, that will encourage those who are uncertain to find an excuse not to submit reports; and it will give comfort to those who support money launderers, etc. and seek an excuse not to submit reports.
I can see it now: a whole industry of people providing consultancy and training in how to produce an internal analysis of information and write an effective conclusion to justify not making a report.