Lexology’s Anti-Money Laundering edited by BCL partner John Binns 2024.
There can be no doubt that the prevention of money laundering is both a worthwhile, even essential, endeavour for governments to pursue, and that it requires an unprecedented degree of international cooperation (reflecting the fact that much laundering activity now takes place internationally). But is prevention really what anti-money laundering (AML) laws achieve in practice? And if not, why do we do it?
The Financial Action Task Force (FATF) exists to coordinate the AML regimes of governments around the world. It is incredibly impressive in its activities and its membership: the overwhelming majority of countries subscribe to its recommendations, coordinate their responses in financial investigation units and submit to periodic monitoring by their fellow members in the form of mutual evaluation reports (MERs).
The result has been the creation, to different extents and in different ways from one jurisdiction to another, of a global AML framework. The FATF influence is a common thread through all the jurisdictions covered in this book: in some ways the similarities between jurisdictions’ approach to AML are more striking than their differences. But whether it is differences in laws or disparities in resourcing between various parts of the regime in different countries, we can surely trust any launderer with an international perspective to seek out and exploit the weak points of the global regime.
Traditionally, the launderer’s activity was seen as comprising ‘placement, layering and integration’. From a global perspective, we might more usefully see this in terms of the location of the predicate conduct that gives rise to proceeds, and the journey of those proceeds, potentially through other jurisdictions, to their present location.