Editorial
| Pages | 1-2 |
| Published date | 25 May 2021 |
| DOI | https://doi.org/10.1108/JMLC-01-2021-145 |
| Date | 25 May 2021 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Bill Tupman |
Editorial
A Tale of Two Cities revisited
“It was the best of times, it was the worst of times [...]”to write an editorial on a topical
theme. The outcome of the US election, the impact on the economy and organised crime of
COVID-19, the impact on the movement of dirty money of Brexit and the so-called “FinCen
revelations”all add up to a period of unpredictability with which 2020 will end and 2021
commence. It is a great time for journalists to wallow in possible crises and confuse the
public with cries of doom and gloom,but it is a terrible time for experts who are supposed to
make sense of all this complexity, whereas the snake-oil salesforce peddles unlikely
conspiracy theoriesto help sell bogus products, both political and pharmaceutical.
The FinCen leak actually does not tell us much thatwe did not already know. SARs have
become a method of back-covering.Banks simply report and wait to see if anybody opens an
investigation. As this is unlikely, they carry on moving the money involved as they have
fulfilled their reporting requirements. There are simply not enough investigators or
prosecutors available to deal with the number of suspicious activities reported. Even if an
investigation takes place, it will only result in a deferred prosecution agreement for the
bank, which does not seem very successful at preventing repeat behaviour. This also
exposes the meaninglessness of the sanctions response to Western displeasure with the
activities of non-Westerngovernments. Sanctions evasion has been a lucrativebusiness ever
since the idea of sanctions was introduced, and big players such as oligarchs find it fairly
easy to evade them. Governmentshave had more problems.
International relations have entered the theatre of anti-money laundering policy.
Sanctions evasion, terrorist financing, tax evasion and the laundering of the profits of
criminal enterprises, especially fraudsters and financial criminals, are different phenomena
and are not appropriate for a one size fits all approach. Investigators are having too many
tasks thrown at them without adequate resources following. Policing has never been
adequately resourced and perhaps in a democracy never should be. Policing the market is
anathema to the neoliberals thatpurport to be followers of Milton Friedman, but maybe it is
time they actuallyread the words of their guru:
“I used to be asked a lot: ‘What do these ex-communist states have to do in order to become
market economies?’And I used to say: ‘You can describe that in three words: privatize, privatize,
privatize.’But, I was wrong. That wasn’t enough. The example of Russia shows that. Russia
privatized but in a way that created private monopolies-private centralized economic controls that
replaced government’s centralized controls. It turns out that the rule of law is probably more basic
than privatization. Privatization is meaningless if you don’t have the rule of law.”
Today, it is not just the Russians who have to privatise. It has also becomethe gospel of the
OECD. But no global institution is driving the rule of law alongside or ahead of
privatisation. In fact, the political class in power is attacking the impartiality of judges and
thus the courts themselves. The new authoritarianism is turning Aristotle upside down as
we return to the rule of demagogues and undermine therule of laws. The new privatisation
is creating private monopolies and oligarchs even in relatively new economic areas. They
can choose where to headquarter their companies and even the jurisdiction of which they
will be citizens. Those choices thus include where and whether they pay their taxes. The
once exclusive club of Westerners has been joined by Chinese, Russian, Indian and even
other unknown oligarchs. They laughat sanctions. Sanctions are a badge of honour, just as
an antisocial behaviourorder is for a juvenile gang member.
Editorial
1
Journalof Money Laundering
Control
Vol.24 No. 1, 2021
pp. 1-2
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-01-2021-145
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