Anti-money Laundering Muller
Linda Berens
This paper reports on our research towards an economic analysis of money laundering schemes utiliz-ing cryptocurrencies, which are convertible decentralized virtual currencies based on cryptographic operations. They gain ground as means to offer enterprises and its customers new payment methods, investing opportunities and some are even intended as substitutes for centrally controlled government-issued fiat currencies. Our starting point is the observation that their increasing popularity attracts the attention of practitioners and scholars, particularly because of raising anti-money laundering concerns. Consequently, work has already been conducted in this area, mainly focusing on implica-tions on anti-money laundering efforts. However, we argue that the potential benefits for criminal in-dividuals are an important, yet neglected factor in the dissemination of cryptocurrencies as money laundering instrument. Addressing this issue, the paper firstly presents the structure of the money laundering process and introduces prevailing anti money-laundering controls. This forms the basis for the subsequent analysis of contextual and transactional factors with respect to their influence on the incentives of criminals to utilize cryptocurrencies for money laundering. This aims at providing an answer to the open question, whether cryptocurrencies constitute a driver for money laundering.
Jeremy Moller is a risk advisory lawyer based in Sydney. He has over 15 years' experience working in Australia, the United Kingdom and New Zealand as a lawyer specialising in anti-money laundering, international sanctions and export controls as well as foreign transparency and influence.
Working with a team of multi-disciplinary experts within the firm's risk advisory team, Jeremy acts as a trusted advisor to a number of large financial institutions and corporate clients in relation to financial crime compliance with a particular focus on anti-money laundering (AML) and counter-terrorism financing (CTF). He is experienced in dealing with a range of regulators both in Australia and overseas, including the Australian Transaction and Reports and Analysis Centre (AUSTRAC). His work includes leading, implementing and reviewing financial crime programs, such as conducting business wide risk assessments, as well as advising on litigation arising out of regulatory investigations and acting on Royal Commissions.
"The issue with money laundering is it tends to take two to money launder: You have the criminal who committed the original crime, but then you also have the bank, the lawyer, the accountant that actually moved the money into the financial system."
Over the past 50 years, the U.S. has made policy changes toward curbing money laundering. Notably, Congress passed the Bank Secrecy Act in 1970, which requires banks to report cash transactions over $10,000.
Rodgers of the Center for the Advancement of Public Integrity says it may not be Trump who should necessarily worry about money laundering charges at this point. The president may have good reason to fear, according to some reports, but the person in the most pressing legal jeopardy could be Trump's former campaign manager, Paul Manafort.
"I personally think they're looking at money laundering for Manafort," Rodgers said. "It looks like they may get something there, given the sheer number of accounts he has, and the number of transactions involved."
"Anyone facing serious charges for money laundering and tax offenses involving undisclosed foreign bank accounts would have huge incentives to trade cooperation for prison time," Jonathan Winer, the State Department's top money laundering expert during the Clinton administration, told McClatchy.
Mathias Müller specialises in Swiss financial market supervisory law, with a particular focus on anti-money laundering, sanctions compliance and combating corruption. He also has experience with FINMA investigation and inspection mandates.
ACAMS is the largest membership organization dedicated to enhancing the knowledge and skills of financial crime detection and prevention professionals worldwide. Its CAMS certification is the most widely recognized anti-money laundering certification among compliance professionals. Visit the ACAMS website at www.acams.org.
Tim's expertise also covers advising on cross-border investigations of foreign authorities. In addition, his practice focuses on advising clients on economic and financial sanctions regulations and anti-money laundering issues. Furthermore, he specialises in conducting internal investigations and advising on cybercrime incidents.
Not least due to the introduction of the Fourth and Fifth Anti-Money Laundering Directive there are already strict EU anti-money laundering rules. However, as directives have to be transposed into national law, some EU member states do not apply the rules in a uniform manner. Already back in July 2019, the EU Commission pointed out structural deficits regarding the fight against money laundering and terrorism financing and presented numerous measures to address this.
In the first quarter of 2021, the EU Commission will propose the establishment of a supervisory body at EU level. It remains to be seen whether this will constitute a new supervisory authority or whether the supervision remains the responsibility of the European Banking Authority (EBA). Since 1 January 2020, the EBA has taken on the leading role in coordinating and monitoring the prevention of money laundering and the financing of terrorism at EU level (see also our contribution on this). However, EU vice president Valdis Dombrovskis said when the measures were presented that if the EBA was to be given this task, it would need to improve.
Pursuant to the Anti-money Laundering Directive (AMLD), the Commission is legally obliged to identify high-risk third countries whose rules on combating money laundering and terrorism financing contain strategic deficits. As a result of the modified method, the new list is now more aligned with the lists published by FATF.
The Commission is assessing whether the action plan will lead to new regulation. In light of the planned review of the EU rules on combating money laundering and terrorism financing, it intends to carry out an impact assessment and present legislative proposals in early 2021. The results of the public consultation will be taken into consideration for this impact assessment.
The first handbook of its kind, Anti-Money Laundering: International Law and Practice published by John Wiley & Sons is now available. This 834-pages hardcover book covers key topics in money laundering and practice and makes it easy for the reader to compare the legislation and rules in different countries. This is a useful reference and guide to those seeking information on anti-money laundering, which is an important but increasingly complex subject involving a globally interconnected system of law and regulation. It will be valuable to those involved in international financial services with its in-depth coverage of anti-money laundering in some 41 countries and territories, with contributions from top-tier international specialists. This book is a concerted effort by a team of experts.
OCT. 30, 2017: Manafort and his longtime business associate Rick Gates surrender to federal authorities in Washington, D.C., after a grand jury approved charges unrelated to the Trump campaign brought by Mueller on the previous Friday, including conspiracy against the United States, money laundering and working as unregistered foreign agents for Ukrainian clients. Both Manafort and Gates plead not guilty to those charges.
MARCH 8, 2018: Manafort pleads not guilty to charges of tax evasion and money laundering among others. Gates, who was indicted alongside Manafort, pleaded guilty in February to two felony counts of conspiracy against the U.S. and lying to federal authorities, and as part of a plea deal, had begun cooperating with the special counsel and began sharing incriminating information about Manafort.
The International Monetary Fund (IMF) finds that Estonia's efforts to tackle money-laundering are "sufficient," and has praised the exchange of information between the supervisory authorities in the wider region in the course of their anti-money laundering work, the Bank of Estonia (Eesti Pank) says.
Member of the Management Board of the Estonian Financial Supervisory Authority Andre Nõmm meanwhile said that: "It is good to see that the analysis approves of the efforts made in Estonia, where high-risk flows of money have been reduced drastically in the financial sector over the years. The IMF's project and the new methods it used are a good example of how we should measure money-laundering risk in payment flows and how we should cooperate on such issues."
The IMF has also recommended that the Nordic and Baltic countries could combat money-laundering and terrorist financing (AML/CFT) better by collecting even more cross-border data. and by investing in advanced data analytics tools.
The IMF further recommends that the countries of the region should be prepared to take joint steps to strengthen their respective financial supervision, if, for example, any bank in the region should prove to present an increased money-laundering risk in the future.
The IMF used various methods to understand the international money laundering risks better, applying machine learning technology at the country level and regional level, analyzing how sensitive the AML/CFT supervisory tools are in responding to risks, and making recommendations for ways to make those tools more effective. It also looked at ways of quantifying the impact of money laundering shocks on financial stability.
The analysis also noted the clear direction that has been taken in the region in consistently strengthening the measures taken to stop money laundering and terrorist financing. Because the risks to financial credibility change all the time, it is important for activities to be coordinated in order to keep pace with those risks, and for innovative solutions to be identified.
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