Have you ever imagined what a money-laundering toolkit would look like? According to senior law enforcement officials in the United Kingdom, it would include not only the primary launderer but also a coterie of accomplices including “an accountant, a fiduciary agent, a lawyer, a banker—then you have all you need to get the dirty money out.”
That official was quoted in a recent feature story in London’s Financial Times. According to the FT story by Cynthia O’Murchu, the UK government and top regulators have begun to turn their attention to the hundreds of billions in laundered cash each year—much of it from corrupt government and public officials from developing nations—that flow into the UK, and especially London real estate, every year.
Prime Minister David Cameron addressed these issues in a recent speech in Singapore, and he noted specifically the monumental laundering operation of a former Nigerian official from an oil-rich region that was facilitated by various English intermediaries.
In addition to prosecuting the primary perpetrators, UK officials are now vowing also to prosecute “professional enablers” such as lawyers, accountants, and real-estate professionals who cater to foreign nationals whose illicit funds should obviously raise red flags in the process of customer due diligence (CDD/KYC) and behavioral monitoring required by AML regulations.
The story echoed yet again the common theme of the lure of real estate for the laundering of the proceeds of corruption. Loose regulations permit ownership through off-shore shell companies, and due diligence requirements are not yet rigorously applied to shadowy buyers of real estate. The FT report noted glaring examples of massive London purchases by a son of Muammer Gaddafi and a son of a disgraced Kyrgyz leader—purchases that should have been flagged had even the most basic due diligence for AML been applied.
The report noted that even though some of the professions rife with facilitation of money laundering are required to file suspicious activity reports, very little oversight and enforcement result in very little filing. In fact, an official from the Solicitors Regulation Authority noted that at one law firm, the money laundering officer was a teenager working part-time.
Industry watchers and financial reformers are urging Prime Minister Cameron to make what they believe is the most important enforcement policy: Forcing the revealing and registry of ultimate beneficial owners.
The focus on Ultimate Beneficial Owners is everywhere in AML Compliance now, but tracking UBOs effectively presents one of the biggest challenges to financial institutions and others charged with AML Compliance. We at AML Partners anticipated this challenge, and so we built an end-to-end AML software solution that includes a Related Parties Registry for UBOs and other related parties. And best yet, the registry and the sanctions screening and negative news are built right into our SURETY products. For details or to learn more about how our end-to-end solution can meet your needs, contact us today.