HOW WILL THE MONEY LAUNDERING REGULATIONS WORK?
| DOI | https://doi.org/10.1108/eb024825 |
| Published date | 01 January 1995 |
| Pages | 36-42 |
| Date | 01 January 1995 |
| Author | MICHAEL CLARKE |
| Subject Matter | Accounting & finance |
HOW
WILL THE MONEY LAUNDERING REGULATIONS
WORK?
Received:
7th November, 1994
MICHAEL
CLARKE
MICHAEL
CLARKE
IS
A LECTURER AT
THE
DEPARTMENT OF
SOCIOLOGY
AND CO-DIRECTOR OF THE
UNIT
FOR
THE STUDY OF WHITE COLLAR CRIME,
LIVERPOOL
BUSINESS SCHOOL. HE
IS
A
MEMBER
OF THE EDITORIAL BOARD OF THE
JOURNAL OF
FINANCIAL
REGULATION AND
COMPLIANCE
AND JOURNAL OF
ASSET
PROTECTION AND FINANCIAL CRIME.
ABSTRACT
This paper looks at how the new
money
laundering
regulations
are likely to
work,
not
in
the
light of
the
stringent
penalties for
failing to
observe
them,
but of
the
practi-
calities of
implementation.
These
include
the
traditional
concern
with
speed
and
dis-
cretion
in banking
transactions,
the
lack
of
capacity of the reporting authority the
National Criminal Intelligence Service
(NCIS),
and of
the
supervisory authority
the
Bank of
England,
the
risk of regulatory
arbitrage
and the feasibility of sanctioning
individual bank employees for lax
observa-
tion of
the
regulations.
Finally
the
implica-
tions of partial
success
of
the regime
are
evaluated
in
terms
of
the
increased pressure
upon
launderers
to find an outlet for
their
money.
INTRODUCTION
A good deal has been made of the
unprecedented character of the new
money laundering regulations in
terms of the requirements laid upon
financial institutions to 'know their
customers' and to take action to
report any suspect transactions to
the appropriate authority, in
Britain's case the National Criminal
Intelligence Service (NCIS). Financial
institutions seem to have responded
by taking the new requirements on
board and engaging in a cascading
programme of staff training, begin-
ning with briefings for senior
management, the devising of train-
ing programmes and discussions
with middle management, leading to
training sessions with the junior
front line staff who are required to
implement the regime.1 Consider-
36
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