Publication Date02 May 2017
Date02 May 2017
AuthorBill Tupman
SubjectAccounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime
AML architecture post-Brexit and Trump
Bankers and crime after Brexit and Trump
At rst sight, 2017 looks set to be a year of change for banking […] or at least of a return
to minimum regulation. Newly inaugurated President Trump has promised to gut the
Dodd–Frank Act and throw out the Volcker Rule. In the UK, Brexit, when Article 50 is
activated, looks set to change the relationship between banking in London and banking
in the rest of the European Union (EU), calling into question the implementation of the
Fourth Money-Laundering Directive and other European regulatory instruments of
These appear to be victories for lobbyists who have been trying to “free” bankers
from the framework brought in as a consequence of the nancial crash of 2008.
Nevertheless, general popular hostility towards bankers continues to exist. Lobbyists
argue that all these regulations are costly, reducing prots and, of course, the prospects
for “wealth creation”. The same argument will be used to lobby for a reduction in
anti-money laundering (AML). Bankers are unhappy at having to be an arm of the police.
Criminal bankers?
But Manhattan prosecutors are pursuing individual bankers in the courts. Deferred
prosecution agreements (DPAs) are seen as punishing customers rather than the banks.
Bonuses continue to be paid and there is no punishment for the individuals who broke
the law or the top managers who either turned a blind eye or even authorised the activity.
Bankers have conspired to x LIBOR, laundered money for Mexican drug car2tels and
falsied SWIFT account numbers to conceal sanctions-busting. DPAs do not seem to be
deterring bankers from misbehaviour, at least when we consider the cases of 2016.
Prosecutors are turning to identifying and bringing criminal prosecutions against
individuals in an attempt to change behaviour.
Can the Trump administration rein in the Manhattan prosecutors? As most of the
accused appear to be foreigners, “British” and “European” banks being the main victims
from the point of view of the European media, which may of course be turning a blind eye
to prosecution of “American” banks. The inverted commas are because all these
institutions are multi- or trans-national rather than national. A Trump administration
may be happy to continue prosecuting “foreign” banks, while giving freedoms to “US”
banks in the name of “America First”.
In fact, change is all going to take time to come to fruition. The legislative process in
the USA and the negotiation process in the EU could take a couple of years, with Easter
2020 looking to be a date at which the new nancial architecture will emerge. So 2017
may turn out to be a year of smoke without much re.
The UK Government only started consultation for transposition of the Fourth
Money-Laundering Directive in late Autumn 2016 with doing nothing as one of the
options, although there is a nancial action task force (FATF) Assessment of the UK
coming up soon. The City of London’s heart is not in the creation of a highly regulated
environment, and Chancellor Hammond’s threat to create an offshore haven for hot
money may be music to the ears of merchant bankers and law rms. The treasury’s
project fear may have failed to win the referendum, and a similar approach may not be
the most rational negotiating strategy for the preservation of “passport rights” for City
Journalof Money Laundering
Vol.20 No. 2, 2017
©Emerald Publishing Limited
DOI 10.1108/JMLC-01-2017-0003

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