4 ms·

> you are aware that there is no "post 911 world" in 90% of the world, right? In the financial world, there definitely is. Because of how 9/11 was bankrolled,

> you are aware that there is no "post 911 world" in 90% of the world, right? In the financial world, there definitely is. Because of how 9/11 was bankrolled, AML laws were severely tightened. Quoting the subject line of the relevant EU directive [1]: "[...] prevention of the use of the financial system for the purposes of money laundering or terrorist financing" Which is the point that the grandparent was getting to. Edit: To be more specific, in today's financial world, technically, shell companies should be pointless because any bank transacting with such a company is required to know the beneficial owner, ie the natural person ultimately behind that company (no matter how many layers). [1] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015L0849&from=EN https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELE...

TheOtherHobbes 6y ago
If you have eight figure net worth or access to same from external sources it's not particularly difficult to start your own offshore bank. It's also pretty easy to buy a passport and create a fake identity. And not that much harder to create nominee directors who will never be vetted. And/or to create "legitimate" businesses with interests in art, property, and other high-value items - including in-game currencies - which can be used to transfer assets in creative ways. https://www.wired.co.uk/article/money-laundering-hmrc-tax-update https://www.wired.co.uk/article/money-laundering-hmrc-tax-up... And if you've been following the history of Wirecard you'll understand how easy it is to create a legitimate cover story for what appear to have been some rather less legitimate background operations. https://www.bellingcat.com/news/uk-and-europe/2020/07/18/worlds-most-wanted-man-jan-marsalek-located-in-belarus-data-points-to-russian-intel-links/ https://www.bellingcat.com/news/uk-and-europe/2020/07/18/wor... And even if you go with a traditional bank, KYC is mostly box ticking. And some of the biggest banks have been directly implicated in money laundering, AML laws and all. https://www.marketwatch.com/story/netflix-documentary-re-examines-hsbcs-881-million-money-laundering-scandal-2018-02-21 https://www.marketwatch.com/story/netflix-documentary-re-exa...
- ckastner 6y ago
  > If you have eight figure net worth or access to same from external sources it's not particularly difficult to start your own offshore bank. An eight figure net worth is not even close when it comes to considering starting an own bank. Furthermore, offshore today means just one thing: "red flag". Because of AML rules, the list of Non-Cooperative Countries or Territories [1], and FATCA/CRS reporting, the only people still going through the hassle of using offshore to hide something are people who really want to hide something -- hence the red flag. Finally, banks don't exist by themselves. They need other banks to partner and transaction with. For example: say you are a bank in the British Virgin Islands. Now try to buy stock on the NYSE. For that, you need a bank with access, and no bank with access would partner with some shady outfit. > And if you've been following the history of Wirecard Wirecard is a scandal beyond comparison. It is unfathomable to me how this could have gone on so long. To contrast that, working for a bank myself, I was involved in numerous audits by financial regulators, and you wouldn't believe the level of detail they went into. Any flaw or inconsistency -- no matter how trivial, at what org level, or even across levels or topics -- was brought up. But perhaps that was just coincidence, and we had the luck of being audited by most the diligent of auditors. > And even if you go with a traditional bank, KYC is mostly box ticking. Absolutely not true, at least not with the banks I'm familiar with (and our peer group services mainly high-net-worth clients). Every single client can be subject of an AML audit. Any irregularity in a record will be construed as an overall failure of AML policies in the institution. You don't just "tick the boxes" with high-risk clients. Background checks happen. Plausibility checks happen. > And some of the biggest banks have been directly implicated in money laundering, AML laws and all. Laws cannot prevent crime, they can only deter crime. Yes, big banks are occasionally still involved in money laundering, but compare this to 20 years ago. The incentives are diminishing. [1] https://en.wikipedia.org/wiki/FATF_blacklist https://en.wikipedia.org/wiki/FATF_blacklist
  - eigen 6y ago
    > An eight figure net worth is not even close when it comes to considering starting an own bank. there are many credit unions with < $1 million in assets. https://www.bestcashcow.com/credit-unions/page-499 https://www.bestcashcow.com/credit-unions/page-499
neiman 6y ago
Wasn't the EU directive was put in place after terror attacks in Europe in the previous decade? What does 9/11 got to do with it?
- ckastner 6y ago
  The first iteration of the aforementioned EU directive was published in 2005 [1]. Before that, individual countries had tightened their individual rules. The Wikipedia page on money laundering [2] details the consequences of 9/11 on regulation quite well. The keyword there is the "Financial Action Task Force", whose recommendations the EU directive aimed to implement. [1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32005L0060 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32... [2] https://en.wikipedia.org/wiki/Money_laundering#History https://en.wikipedia.org/wiki/Money_laundering#History
  - neiman 6y ago
    Thank you, I take what I wrote back.

TheOtherHobbes 6y ago

If you have eight figure net worth or access to same from external sources it's not particularly difficult to start your own offshore bank. It's also pretty easy to buy a passport and create a fake identity. And not that much harder to create nominee directors who will never be vetted. And/or to create "legitimate" businesses with interests in art, property, and other high-value items - including in-game currencies - which can be used to transfer assets in creative ways. https://www.wired.co.uk/article/money-laundering-hmrc-tax-update https://www.wired.co.uk/article/money-laundering-hmrc-tax-up... And if you've been following the history of Wirecard you'll understand how easy it is to create a legitimate cover story for what appear to have been some rather less legitimate background operations. https://www.bellingcat.com/news/uk-and-europe/2020/07/18/worlds-most-wanted-man-jan-marsalek-located-in-belarus-data-points-to-russian-intel-links/ https://www.bellingcat.com/news/uk-and-europe/2020/07/18/wor... And even if you go with a traditional bank, KYC is mostly box ticking. And some of the biggest banks have been directly implicated in money laundering, AML laws and all. https://www.marketwatch.com/story/netflix-documentary-re-examines-hsbcs-881-million-money-laundering-scandal-2018-02-21 https://www.marketwatch.com/story/netflix-documentary-re-exa...

ckastner 6y ago
> If you have eight figure net worth or access to same from external sources it's not particularly difficult to start your own offshore bank. An eight figure net worth is not even close when it comes to considering starting an own bank. Furthermore, offshore today means just one thing: "red flag". Because of AML rules, the list of Non-Cooperative Countries or Territories [1], and FATCA/CRS reporting, the only people still going through the hassle of using offshore to hide something are people who really want to hide something -- hence the red flag. Finally, banks don't exist by themselves. They need other banks to partner and transaction with. For example: say you are a bank in the British Virgin Islands. Now try to buy stock on the NYSE. For that, you need a bank with access, and no bank with access would partner with some shady outfit. > And if you've been following the history of Wirecard Wirecard is a scandal beyond comparison. It is unfathomable to me how this could have gone on so long. To contrast that, working for a bank myself, I was involved in numerous audits by financial regulators, and you wouldn't believe the level of detail they went into. Any flaw or inconsistency -- no matter how trivial, at what org level, or even across levels or topics -- was brought up. But perhaps that was just coincidence, and we had the luck of being audited by most the diligent of auditors. > And even if you go with a traditional bank, KYC is mostly box ticking. Absolutely not true, at least not with the banks I'm familiar with (and our peer group services mainly high-net-worth clients). Every single client can be subject of an AML audit. Any irregularity in a record will be construed as an overall failure of AML policies in the institution. You don't just "tick the boxes" with high-risk clients. Background checks happen. Plausibility checks happen. > And some of the biggest banks have been directly implicated in money laundering, AML laws and all. Laws cannot prevent crime, they can only deter crime. Yes, big banks are occasionally still involved in money laundering, but compare this to 20 years ago. The incentives are diminishing. [1] https://en.wikipedia.org/wiki/FATF_blacklist https://en.wikipedia.org/wiki/FATF_blacklist
- eigen 6y ago
  > An eight figure net worth is not even close when it comes to considering starting an own bank. there are many credit unions with < $1 million in assets. https://www.bestcashcow.com/credit-unions/page-499 https://www.bestcashcow.com/credit-unions/page-499

neiman 6y ago

Wasn't the EU directive was put in place after terror attacks in Europe in the previous decade? What does 9/11 got to do with it?

ckastner 6y ago
The first iteration of the aforementioned EU directive was published in 2005 [1]. Before that, individual countries had tightened their individual rules. The Wikipedia page on money laundering [2] details the consequences of 9/11 on regulation quite well. The keyword there is the "Financial Action Task Force", whose recommendations the EU directive aimed to implement. [1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32005L0060 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32... [2] https://en.wikipedia.org/wiki/Money_laundering#History https://en.wikipedia.org/wiki/Money_laundering#History
- neiman 6y ago
  Thank you, I take what I wrote back.