Showing posts with label Money Laundering. Show all posts
Showing posts with label Money Laundering. Show all posts

1 May 2017

Compliance hiring at fever-pitch!

My (pessimistic) prognosis of  'One Compliance Kommissar behind every productive Staffer' is soon (already?) sad reality. Wish the same could be said about politicians and civil servants! Did Ancient Rome not die after suffocationg on legal and bureaucratic overkill?
Deutsche Bank hiring in compliance - Business Insider

29 Aug 2015

Money Laudering: what is a 'suspicious' transaction?

Apart from finance professionals being clairvoyants it is extremely tricky to safely fulfil the regulator's insistence to report all suspicious transactions. With hindsight it is always possible for authorities to hit banks and asset managers with a big club and claim a transaction should have been reported. The only really safe procedure would be to report ALL transactions and put the burden of compliance on the shoulders of the regulators. Alternatively there should be an EXHAUSTIVE and detailed checklist giving details of any signs that should arouse suspicion. As always we want to remind readers that in our opinion poor and unnecessary legislation or sloppy work by police authorities are the real reasons for the anti-money laundering hysteria. There was no more crime before the politicians invented the need to control citizens more and more in a costly, intrusive - and ultimately ineffective - way.

30 May 2015

Anti-Money Laudering measures bark up the wrong tree

Prevention, detection and prosecution of money laundering has become big business during the past 20-30 years. And it will keep on growing and feed an ever-expanding army of regulators, compliance officers and assorted consultants. By definition the term money-laundering can be applied to nearly all business transactions and it taints everyone - even innocent parties - that is involved in commerce. For who can with 100 percent certainty say that someone he transacts with is not in some way associated with a proscribed activity? As re-iterated on this site for a few times money-laundering legislation is only a get-out for poor legislation and poor government. If the crime (and quite a few of the proscribed activities do not rank as crime in everyone's eyes) would have been prevented, detected or prosecuted, or even better, bad laws would not have been enacted, the need for anti-money laundering would vanish. High and arbitrary taxes (tobacco, alcohol, VAT), discriminatory subsidies (EU agriculture), moral crusades (drugs, prostitution) are all imposed on upright citizens and cannot be justified by any standard. It is also noteworthy that money-laundering accusations are regularly added to accusations that are not really involving any money laundering. One example would be where the someone is accused of tax fraud. Naturally there will be some financial transactions involved but to claim that money laundering was involved is not grounded in any rational sense of justice. But it suits today's political class to create a climate of all-pervasive supervision and fear among the citizens they are supposed to serve.

6 Jan 2014

J.P. Morgan to pay $2 billion over Madoff case

Not sure if one should cry or laugh when reading headlines such as this one. How did the parties to this shameful deal arrive at the number? Did it get picked out of thin air? Is there any real proof of culpability? Since when is it a crime to conduct one's business prudently? If the regulators did not spot the Madoff fraud have they received any punishment? And why is JP Morgan management agreeing to this 'settlement' (which leaves the question where the money goes, is it just used to plug the hole in the government's budget?)

P.S.: it is gratifying to read that a 'portion' of the $2 billion penalty will be earmarked for victims of the Madoff fraud. How generous, and the state appropriates the majority of the loot for itself. Why don't the regulators make a contribution to the victims as well? I guess the only reason why regulators do not throw the book at specific JP Morgan executives is that they want to avoid questions over why they are spared jail after such a major cock-up as the failure to detect the Madoff fraud in good time.

Nothing can surprise me with respect to the ever-increasing reach that the 'authorities' give the interpretation of the ill-fated and useless money laundering laws. Soon the £5 loan that a schoolchild receives from a granny will have to be reported as 'suspicious' by anyone who has knowledge of it, for who but the 'regulators' can (with hindsight) determine what is suspicious or not? Already anyone trying to open a bank account (or even access a long-forgotten one) is basically treated as a potential criminal these days. And all this wasteful effort is expended in order to undo the results of bad laws imposed by an undemocratic process.

22 Nov 2010

Kafka alive and well in US Government

The absurd consequences of the obsession with fighting symptoms rather than causes and increasing the reach of government and civil servants at all costs is demonstrated by news (Wall Street Journal, 20 Nov 2010) that major US banks are intimidated enough to refuse to conduct business with a large number of foreign embassies in the USA. In countries such as the UK opening a bank account is a major burden for consumers and achieves no demonstrable benefit in terms of fighting crime or terrorism. The costs of complying with regulations that become more complicated by the day is immense, not only in direct costs related to the governmental enforcement agencies but also in terms of additional staffing in financial service firms.

10 Mar 2009

Banking Secrecy - Enemy Number One or convenient scapegoat?

During the recent past politicians and lobbies of all persuasions seen to have found a new 'Enemy Number One' - Banking Secrecy and linked to this Tax Havens large and small.
Politicians and their paid servants, the regulators, have failed miserably to prepare for the current global financial crisis. For example, the Bank of International Settlements has spent roughly 10 years to produce a report of nearly 1000 (!) pages but this Basel II framework did nothing to prevent the debacle that has afflicted major banks around the world.
So it appears to be nothing more than a desperate search for scapegoats when politicians attack banking secrecy and tax havens. They are not the cause of the current crisis!
Not so long ago there was a time when anyone could walk into a Bank in Austria and open a bank account without presenting any form of documentation. No one asked what their name or address was. You paid in your money and you received a bearer passbook that was the only document you needed to claim back your money. In his teenage years the author even opened a number of passbooks on the same day. That way he pocketed a small amount of money that the banks put into new passbooks as a reward for opening the account.
Was crime any higher as a consequence of lax banking regulation? Was corruption rampant? Not at all. Since the (US inspired) crusade against banking secrecy gathered speed both crime and corruption have - if anything - increased. The world certainly does not seem to be a safer place.
Ironically, much crime and corruption can be traced back to ill-conceived legislation: the war on drugs, arbitrary taxes (tobacco, alcohol), questionable regulations and subsidies (agriculture, trade tariffs, soon to be exceeded by fraudulent carbon trading), limits on prostitution. All these laws and regulations may be well-intentioned but they provide a fertile field for criminal activity and usually are counterproductive as well as costly to the taxpayer and citizen (who most of the time get no say on respective laws).
If countries want to close down tax loopholes they can avail themselves of a solution that is easy to administer and leaves the precious privacy of all citizens untouched: Legislators can decide to impose taxes at source. If politicians are really only interested in reducing the amount of tax that in unpaid this solution should be suffice. Anything more intrusive indicates that the authorities are really interested in invading the private sphere of the individual and increase the control that the state already has over the citizen's lives.