Artificial harmony. Why cooperative efforts to create a global financial intelligence unit have faltered
| Published date | 07 October 2014 |
| Pages | 428-439 |
| Date | 07 October 2014 |
| DOI | https://doi.org/10.1108/JMLC-08-2013-0030 |
| Author | Clifford Williams |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation |
Articial harmony
Why cooperative efforts to create a global
nancial intelligence unit have faltered
Clifford Williams
Thomas Jefferson School of Law, San Diego, California, USA
Abstract
Purpose – The purpose of this paper is to explain that the commonly used method allowing for
inter-agency cooperation between national nancial intelligence units, the memorandum of
understanding, is inadequate and ineffective in creating a cooperative global nancial intelligence unit
capable of combating money laundering typologies on an international scale.
Design/methodology/approach – Methods of international nancial intelligence unit (FIU)
cooperation have chiey occurred in two ways: rst, through the efforts of the Egmont Group; and
second, through the inclusion of provisions concerning FIUs contained in international legal documents.
The rst is an impossibility.
Findings – This paper proposes that the result of implementation of the 2012 Financial Action Task
Force Recommendations will be an informal network of FIUs where the Egmont group acts as a
centralized operator for information exchange, effectively creating an informal global FIU (“GFIU”), but
that this system, or a cooperative global nancial intelligence unit system based on FIU-to-FIU
exchanges will not allow for effective multilateral, international cooperation.
Research limitations/implications – This is because national interests and unfamiliarity with
capabilities provided in the Egmont Group’s cooperative platform have and will continue to result in
under-utilization of cooperative efforts, and because the traditional mechanism employed for
FIU-to-FIU exchanges, the memorandum of understanding (“MOU”), makes uniform or standardized
information request and transfer procedures that are required for multilateral or multi-agency efforts to
combat money laundering across international boundaries an impossibility.
Practical implications – The Egmont Group’s cooperational structure should be the primary means
by which to achieve a GFIU.
Social implications – The global combat on money laundering will be more effective, thereby more
fully protecting the global economy.
Originality/value – A comparison between the Egmont Group’s network building mechanism and
the existing use of MoU to create global cooperation against money laundering has not been analyzed.
Keywords Cooperation, Memorandum of understanding, Financial intelligence unit, FIU, Global
Paper type Conceptual paper
HSBC Holdings PLC on Tuesday plans to acknowledge that for years it ignored possible
money laundering, part of a record $1.9 billion settlement with USA authorities that caps the
bank’s disastrous foray into the USA market (Barrett and Perez, 2012).
Introduction
The resolution of the HSBC money laundering case, the settlement of which is expected
to reach a record $1.9 billion, will bring to a close the investigation by multiple US
agencies into what is potentially the largest, in terms of dollars involved, and most
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
JMLC
17,4
428
Journal of Money Laundering Control
Vol. 17 No. 4, 2014
pp. 428-439
© Emerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-08-2013-0030
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