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While a lot of text written out, this is an extremely weak argument. It boils down to "they can't do it perfectly so they shouldn't try at all". And the exact

While a lot of text written out, this is an extremely weak argument. It boils down to "they can't do it perfectly so they shouldn't try at all". And the exact opposite of defense in depth. Tons of places people will cast a blind eye to things that they know are illegal if they can profit off it. Banking is absolutely one of those areas where there are huge incentives to do so, as it requires no effort and is easy to profit off of criminality. This law says we're not going to allow you to be part of the broader global system while knowingly profiting off of criminality. Yes you may not catch 100% of it, but you sure have to thoroughly try to eliminate it. And there will be financial punishments to ensure you're not doing it just in name only. This is exactly what we want in our financial system. I really don't understand the motivation behind your post. "Let's eliminate a great law for crime prevention because it doesn't prevent 100% of crime?" That makes no sense.

infamouscow 4y ago
I think the question is whether there's any evidence these laws have mitigated or prevented anything. After 20 years there should be a vast body of evidence to justify the second, third, and fourth order effects these pernicious laws have had on society. Rather than looking at the facts, we keep pointing to nonsense perpetuating the existence of a self-licking ice cream cone. It's easier to put your head in the sand and ignore or downplay legitimate grievances when the rules you impose on everyone (and enforced at gunpoint) objectively has zero positive outcomes and a litany of negative outcomes. I'm sure the TSA confiscated a lot of leatherman multi-tools at the airport, but that isn't a benchmark for their success. Take a guess how many terror plots have been foiled by the FBI/DHS/TSA versus random people over the same time span -- or how many caught by random people were already a person of interest by FBI/DHS/TSA.
mike_hearn 4y ago
> "Let's eliminate a great law for crime prevention because it doesn't prevent 100% of crime?" That makes no sense. It makes no sense because that's not what my post says. In the final paragraph it advocates for a reform of AML law, not total abolition. > This law says we're not going to allow you to be part of the broader global system while knowingly profiting off of criminality No it doesn't, please read my post again. Your statement would be correct if you deleted the word "knowingly". AML laws can jail bankers if they provide services to criminals, even if they didn't know of their criminal nature and even if they did actually make extensive efforts to "know their customer". In fact it can jail them even if there was no actual crime happening at all, simply for procedural reporting failures.
- BoiledCabbage 4y ago
  > The fix would be a mix of changes to AML rules and the PATRIOT Act, transforming the system into something a lot more mechanical and objective. It might make some crime a bit easier, but that can be counterbalanced by e.g. increased funding to the police. Without a real suggestion of what to replace it with, all I'm really hearing is get "rid of it and magic some some other solution." Transforming it into something more mechanical and objective? Taking a pop culture related concept (a bit contrived compared to what actually happens) of "banks must report all transactions over $10k." Mechanical and objective. So now criminals do transfers in $9k amounts. And we sit around waiting for a new law to be passed to catch this loop hole while criminality runs wild laundering. Then the new law passes, they spend 1 week to circumvent it and we wait around for another law to pass. It's like trying to legislate what specific exploits a company needs to have patched to say they prevented hackers. Then a new exploit comes out, it isn't in the law and that's used until the law catches up. It's useless. The solution is recommend/require best practices and also require that companies are responsibility for the security of their systems. Meaning they need to stay on top of things in earnest, and not just say we have those 5 legally mandated patches so we did our part. Current security is a mess - and I guarantee if companies did have the equivalent banking laundering laws applied for security, all of a sudden a lot of companies would be interested in "provably safe" technology. Instead of today's world of essentially "do what's convenient for security, but nothing that will inconvenience our profits too much."
  - mike_hearn 4y ago
    My post was pretty long already. A complete proposal for reforming AML laws would be a book sized topic. Structuring is a good example of an AML rule that makes no sense any more. The goal was to try and build a database of transactions that might be vaguely relevant to crime (large cash transactions) but it was phrased in an odd way with a per-transaction limit triggering a report to the federal government, probably to deal with the limitations of paper based banking at the time. Due to this poor lawmaking - whether forced or not - of course criminals just started making deposits of $9,999 each time to avoid the reporting and this was addressed with yet more terrible law, specifying a suspicious transaction pattern whose only definition is "you should know it when you see it". Then they threaten bankers with jail if they don't see it. What if the two sides disagree on knowing-it-when-they-see-it? Well, the bankers always lose. This is hardly upholding the core principles of the justice system and only raised the difficulty for organized crime by a small amount, essentially just requiring the bring-up of front companies so they could deposit large amounts of cash without appearing to be suspicious. Structuring rules could be abolished entirely. Since that time computers and databases got a lot more powerful, and so now in reality the US monitors all financial transactions of any size regardless of the SAR rules. They just do it via semi-secret programmes at the Treasury (TFTP), CIA and NSA. Arguably they shouldn't and an ideal system would abolish all those things, with FinCEN being folded into the FBI and it being the only agency that engages in financial forensics. Reporting in turn could simply be eliminated and replaced with a system in which the investigative agencies submit database queries to banks, and those queries are then approved by bank staff if they are complying with the rules that constrain police activity. This would bring it into line with how other requests for information (are supposed to) work in the modern era. You could also go further and state that there's nothing special about finance and that as fishing expeditions aren't allowed in classical law enforcement, transaction reporting should be eliminated entirely. That would be consistent with other areas of law, but is presumably too radical for you. > It's like trying to legislate what specific exploits a company needs to have patched to say they prevented hackers. Then a new exploit comes out, it isn't in the law and that's used until the law catches up. It's useless. Yes, and AML is like passing a law that says "don't get hacked, if you do you go to jail for a couple of decades if a regulator thinks you didn't make enough effort". What counts as enough effort? What even counts as getting hacked? They won't tell you these things and in reality it depends on what the press says. If such a law were passed and then actually enforced you'd just see people refusing to work in the computing industry because no salary is worth that kind of risk.

infamouscow 4y ago

I think the question is whether there's any evidence these laws have mitigated or prevented anything. After 20 years there should be a vast body of evidence to justify the second, third, and fourth order effects these pernicious laws have had on society. Rather than looking at the facts, we keep pointing to nonsense perpetuating the existence of a self-licking ice cream cone. It's easier to put your head in the sand and ignore or downplay legitimate grievances when the rules you impose on everyone (and enforced at gunpoint) objectively has zero positive outcomes and a litany of negative outcomes. I'm sure the TSA confiscated a lot of leatherman multi-tools at the airport, but that isn't a benchmark for their success. Take a guess how many terror plots have been foiled by the FBI/DHS/TSA versus random people over the same time span -- or how many caught by random people were already a person of interest by FBI/DHS/TSA.

mike_hearn 4y ago

> "Let's eliminate a great law for crime prevention because it doesn't prevent 100% of crime?" That makes no sense. It makes no sense because that's not what my post says. In the final paragraph it advocates for a reform of AML law, not total abolition. > This law says we're not going to allow you to be part of the broader global system while knowingly profiting off of criminality No it doesn't, please read my post again. Your statement would be correct if you deleted the word "knowingly". AML laws can jail bankers if they provide services to criminals, even if they didn't know of their criminal nature and even if they did actually make extensive efforts to "know their customer". In fact it can jail them even if there was no actual crime happening at all, simply for procedural reporting failures.

BoiledCabbage 4y ago
> The fix would be a mix of changes to AML rules and the PATRIOT Act, transforming the system into something a lot more mechanical and objective. It might make some crime a bit easier, but that can be counterbalanced by e.g. increased funding to the police. Without a real suggestion of what to replace it with, all I'm really hearing is get "rid of it and magic some some other solution." Transforming it into something more mechanical and objective? Taking a pop culture related concept (a bit contrived compared to what actually happens) of "banks must report all transactions over $10k." Mechanical and objective. So now criminals do transfers in $9k amounts. And we sit around waiting for a new law to be passed to catch this loop hole while criminality runs wild laundering. Then the new law passes, they spend 1 week to circumvent it and we wait around for another law to pass. It's like trying to legislate what specific exploits a company needs to have patched to say they prevented hackers. Then a new exploit comes out, it isn't in the law and that's used until the law catches up. It's useless. The solution is recommend/require best practices and also require that companies are responsibility for the security of their systems. Meaning they need to stay on top of things in earnest, and not just say we have those 5 legally mandated patches so we did our part. Current security is a mess - and I guarantee if companies did have the equivalent banking laundering laws applied for security, all of a sudden a lot of companies would be interested in "provably safe" technology. Instead of today's world of essentially "do what's convenient for security, but nothing that will inconvenience our profits too much."
- mike_hearn 4y ago
  My post was pretty long already. A complete proposal for reforming AML laws would be a book sized topic. Structuring is a good example of an AML rule that makes no sense any more. The goal was to try and build a database of transactions that might be vaguely relevant to crime (large cash transactions) but it was phrased in an odd way with a per-transaction limit triggering a report to the federal government, probably to deal with the limitations of paper based banking at the time. Due to this poor lawmaking - whether forced or not - of course criminals just started making deposits of $9,999 each time to avoid the reporting and this was addressed with yet more terrible law, specifying a suspicious transaction pattern whose only definition is "you should know it when you see it". Then they threaten bankers with jail if they don't see it. What if the two sides disagree on knowing-it-when-they-see-it? Well, the bankers always lose. This is hardly upholding the core principles of the justice system and only raised the difficulty for organized crime by a small amount, essentially just requiring the bring-up of front companies so they could deposit large amounts of cash without appearing to be suspicious. Structuring rules could be abolished entirely. Since that time computers and databases got a lot more powerful, and so now in reality the US monitors all financial transactions of any size regardless of the SAR rules. They just do it via semi-secret programmes at the Treasury (TFTP), CIA and NSA. Arguably they shouldn't and an ideal system would abolish all those things, with FinCEN being folded into the FBI and it being the only agency that engages in financial forensics. Reporting in turn could simply be eliminated and replaced with a system in which the investigative agencies submit database queries to banks, and those queries are then approved by bank staff if they are complying with the rules that constrain police activity. This would bring it into line with how other requests for information (are supposed to) work in the modern era. You could also go further and state that there's nothing special about finance and that as fishing expeditions aren't allowed in classical law enforcement, transaction reporting should be eliminated entirely. That would be consistent with other areas of law, but is presumably too radical for you. > It's like trying to legislate what specific exploits a company needs to have patched to say they prevented hackers. Then a new exploit comes out, it isn't in the law and that's used until the law catches up. It's useless. Yes, and AML is like passing a law that says "don't get hacked, if you do you go to jail for a couple of decades if a regulator thinks you didn't make enough effort". What counts as enough effort? What even counts as getting hacked? They won't tell you these things and in reality it depends on what the press says. If such a law were passed and then actually enforced you'd just see people refusing to work in the computing industry because no salary is worth that kind of risk.