Money Laundering Bulletin

How do you ensure that your institution is equipped to meet the challenges of information overload? Mary Bhawnani and Andrew Barnes of AML Risk Management Ltd, explore some of the difficulties in this area and offer some ideas on how to be effective .

In today’s US capital markets millions of securities, bonds and shares change hands every day. The participants – brokers, banks and investment managers alike – rely on the Depository Trust & Clearing Corporation (DTCC) to bring order to the settlement process. Ensuring orderly settlement of around 50 million trades every day, totalling around US$1.4 quadrillion per year, the DTCC is the beating heart of America’s financial centre. In a move that includes the deployment of anti-money laundering detection software from Norkom Technologies, the DTCC is acting to improve AML security for itself and its customers. A byproduct will be the creation of immensely powerful macro surveillance capability for regulators.

How effective are US law enforcement and intelligence in combating money laundering? Andrew Cave investigates.

A central purpose of the European Union’s (EU) Second Money Laundering Directive (2MLD), which came into effect in June 2003, was to extend to estate agents, amongst others, the anti-money laundering (AML) controls that until then had applied to financial institutions. The aim, although well-meant and logical, in some important ways is beginning to look more than a shade unrealistic, says Alan Osborn .

In November 2006, the Financial Action Task Force (FATF) published two research reports: one looked at new payment methods and how they are being abused by money launderers (reviewed in last month’s MLB) and the other examined the misuse of corporate vehicles, which Sue Grossey distils this month.

An odd fact about Serbia today is that hardly anybody in the country seems curious about the way its official government financial figures don’t remotely add up. Alan Osborn investigates.

Last year was identified with formal introduction in the UK of the risk based approach (RBA) although, as many in UK financial services point out, it was not exactly a new idea. Even so, over the coming months money laundering officers and their advisers will be grappling with the concept as they seek to understand how it will be interpreted by regulators and the courts; and in some areas they will be earnestly hoping for clarity or inspiration before the Third EU ML Directive is switched on in mid December. Several influential practitioners reflected on the challenges their organisations face in making the RBA work during a panel session at the recent Osney Media 6th Annual MLRO Convention in London. James London, Head of Financial Crime Policy Unit, UK Financial Services Authority (FSA) was in the chair.

Timon Molloy, Editor