Just as the fourth edition of this invaluable guide is published to update us on all that has happened since the last edition in December 2009; so it is that recent events demonstrate already that there will be much to write about when the hard working editors come to consider a fifth edition in a few years time.
Recently the bitcoin crypto-currency has been in the news with the closure of the Silk Road website and the collapse of Mt Gox and Flexcoin, one a bitcoin exchange and the other a bank. Whatever may be the fate of bitcoin, there are sure to be other crypto-currencies in the future, independent of any central bank control and an obvious attraction for money launderers. This book rightly points out that the international community will have to legislate to combat the threat to the global financial system posed by such new currencies and to harness them for the good of the law-abiding majority; not least because it appears that the FBI now has possession of a large amount of bitcoin as a result of its actions against Silk Road.
After three decades of international efforts to combat first drug money laundering, then all crimes money laundering and terrorist financing and more recently nuclear proliferation financing, it is indeed striking, as the guide points out, that there is, as yet, no comprehensive international legal instrument dealing with money laundering on a universal basis. Surely this would be an objective worth striving for in the next decade so that the international community could have a realistic prospect of engaging collectively in an effective battle against money laundering in all its forms. It is the link to economic prosperity that will drive a new approach to the international law in this area because, without it, future economic development will be stifled. This challenge is a significant one and probably too long term a goal for most election driven, sound bite politicians.
This guide continues to be an extremely useful one stop shop for international money laundering law. Starting with a very helpful overview of the development of money laundering law and the work of international organisations, chief of which is the Financial Action Task Force, the guide covers money laundering law in 36 jurisdictions around the world ranging from Saudi Arabia to Switzerland and the Ukraine to the US.
There can be very few countries where activists have gone on hunger strike to protest against corruption and to demand that money laundering be made a crime, but that is what happened in India in 2011. The demonstration was broken up with excessive force by riot police and 50 people were reported injured.
More prosaically, and closer to home, the guide provides a helpful insight into the Fourth EU Money Laundering Directive. There is much there for lawyers, compliance officers and, especially, regulators to get their teeth into. It will be fascinating to see the member states own risk assessments which are likely to come in alongside risk assessments for firms. How such “self-risk assessments” will be evaluated by other member states and countries outside the EU will be another interesting question. As we look today at the problems in Ukraine and the tough conditions that international institutions, the EU or any foreign government will impose as a condition of bail out, such risk assessments will become highly significant in future international financial support negotiations.
Other developments under the new Directive will affect enhanced due diligence and its application to domestic PEPs, a subject that has already caused some consternation in the UK when one major bank was reported to have targeted MP’s as domestic PEPs. Other stricter changes are proposed in the simplified due diligence area. What is certain is that money laundering compliance will continue to be a high priority for regulated businesses. Failure to comply is being visited with substantial criminal and civil penalties both in the UK and around the world; most obviously in the US. It is fair to say that the regulators have only started to generate work in this area and this new edition of the guide is sure to be in high demand.
For UK practitioners, there are four separate chapters by contributors from the general editors’ firm, Baker & McKenzie, Ernst & Young LLP and Jonathan Fisher QC, making the guide particularly informative for local practitioners. The somewhat cosmetic changes to the Financial Services Authority, which has become the Financial Conduct Authority, and the Serious Organised Crime Authority which has become the National Crime Agency, came too late for inclusion in this edition but by the time the next one is due those organisations may well have changed their names again. This edition should have a place in every practitioner’s library.
Peter Binning, Partner, Corker Binning
International Guide to Money Laundering Law and Practice’ (Fourth Edition)
Authors: Arun Srivastava, Mark Simpson, Nina Moffat
The book review can also be viewed here.
Nick Barnard comments on the subtle shift in government rhetoric regarding crypto regulations
February 2 2023
Nick Barnard writes about crypto wallet freezing orders in Thomson Reuters
January 25 2023
Peter Binning comments on regulatory regimes in the Financial Times
January 25 2023