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Analysis & Opinion

OPINION: The FinCEN Files – Will they change anything?

By James Treacy, Managing Director, AMLi

The revelations in the FinCEN data dump do not come as a shock to those of us who work at the coalface of financial crime, the proliferation of dirty money being washed through the global financial system will come as a big surprise to people outside our bubble.

The amounts looted by corrupt politicians, bureaucrats and organised crime bosses are staggering. Even more repulsive is the ease with which they launder the proceeds of their criminal activities, aided and abetted by a class of enablers in the legal, financial and public relations professions.

We reported recently at AML Intelligence on Russian oligarchs and Chinese tycoons laundering billions through the “London Laundromat” and how this is impacting Britain’s reputation as a global financial centre. The FinCEN Files bear this out as does the BBC Panorama programme today delving into the murky world of money laundering facilitated by some of the world’s biggest banks in the UK.

Deutsche Bank in New York comes under serious scrutiny and is implicated in laundering millions of dirty money originating from Russia, with ties to that country’s mafia.

Something that does come as a shock however is the fact that Deutsche executives waved through dodgy transactions – even though they had been red flagged by the bank’s own Compliance teams.

So what does this mean and will there be any long lasting implications?

If we are to take any lessons from the last great financial crime scandal – the Panama papers, the answer is probably very little, that this will fizzle out without any major changes to the current extremely profitable money laundering system which rewards criminals with many trillions of dollars every year. What is particularly galling is that 98% of their corrupt earnings are successfully laundered and ready to be spent on exclusive properties in London, New York and Miami, or on whatever assets they fancy.

Do we throw in the towel and resign ourselves to business as usual, or can we take the fight to the criminals and the global system that enables corruption on a truly epic scale?

There are signs of a fightback, with European Union plans to create a robust AML authority to harmonise sharing of data, intelligence and typologies, and US watchdog FinCEN’s proposed revamp of AML rules. But without joined up thinking and more importantly – consistent application and enforcement of AML/CFT regulations and policies, we are on a hiding to nothing and the highly organised criminal networks will continue operating with impunity.

We will keep fighting the good fight along with our dedicated community of financial crime fighters around the world. We need to strengthen our public/private partnerships  as it will take organised networks of like-minded professionals  to take on the criminal networks.

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