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US AML laws are already contradictory in and of themselves. The problem is that they serve two contradictory goals. From a sanctions and geopolitical perspectiv
by ellius 8y ago
US AML laws are already contradictory in and of themselves. The problem is that they serve two contradictory goals. From a sanctions and geopolitical perspective, Washington wants to shut bad actors out of the US banking system, which means they punish banks that retain "bad" customers. But from a law enforcement perspective, typically investigators much prefer accounts be kept open, as that is effectively a running financial wiretap on a target. When you close the account, you give up on new information and potentially alert the target (a good example was that without even closing the account, Paul Manafort walked away from his Bank of Cyprus accounts after merely being questioned by a bank officer). So the contradiction exists not just between AML and other US bank laws but within AML regulations themselves.
Frankly as someone who used to work in the field I found this insanely frustrating and would constantly hate that I was forced to get rid of customers who I wasn't positive had done anything wrong to protect the bank, and if they HAD done something wrong I was basically destroying law enforcement's lead and possibly alerting the target. But that's the current effect of the laws. They definitely need to be fixed not just for broader goals like banking inclusion but to effectively do what they're supposed to do in the first place.
- AnthonyMouse 8y agoIt's not only that, the entire concept of anti-money laundering as an anti-terrorism tool is basically a farce. The anti-money laundering laws came out of domestic organized crime. After the feds got Al Capone on tax evasion the mobsters started paying their taxes but the feds still wanted to go after them that way, so the concept of "money laundering" was created from whole cloth. The problem is it never really worked once the crime bosses had an accountant on payroll. And organized crime itself was primarily an artifact of Prohibition and the Depression and has been on the decline ever since. The WoD is probably the only reason it still exists at all, but unlike Prohibition, that is international. Which means the criminals can export the money from the US as cash or precious commodities and don't have to deal with the US banking system at all. With terrorism it's even worse. If some prince in the middle east is using oil money to fund terrorism, the money is never even in the US to begin with. It's the textbook example of a law whose costs outweigh its benefits but no one wants to fix it because they don't want to look soft on drugs/terrorism.
- ataturk 8y agoIt's hilarious to me that you used Paul Manafort as an example while the Clinton Foundation is likely the biggest money laundering operation in history.
- heyoni 8y agoIt still happens a lot: https://www.justice.gov/usao-edny/press-release/file/1003201/download https://www.justice.gov/usao-edny/press-release/file/1003201... Old school mafia are using check cashing places to launder money.
- AnthonyMouse 8y ago> It still happens a lot What, charging mobsters with tax evasion? It might still work on the occasional mid-level guy who was dumb enough to not pay his taxes. When was the last time a top-level crime boss was charged with it? > Old school mafia are using check cashing places to launder money. Of course they are. That's why the laws against money laundering are harmful. Most of the people you're trying to catch with them are adept at navigating around them, so all they really do is molest honest citizens/businesses and degrade privacy.