Uncomfortable truths? ML=BS and AML= BS2
| Pages | 294-308 |
| DOI | https://doi.org/10.1108/JFC-08-2017-0071 |
| Published date | 08 May 2018 |
| Date | 08 May 2018 |
| Author | Ronald F. Pol |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Uncomfortable truths? ML=BS
and AML= BS
2
Ronald F. Pol
AMLassurance.com, Wellington, New Zealand and
School of Government and International Relations, Griffith Business School,
Griffith University, Nathan, Australia
Abstract
Purpose –The purpose of this paper is to advance debate and prompt new strategies substantially to
improve thecapacity to disrupt serious profit-motivatedcrime.
Design/methodology/approach –Using interdiction rates (the proportion of criminal funds seizedor
forfeited) as an interim proxy effectiveness indicator, this article challenges elements of the dominant anti-
money laundering/counter-financing of terrorism (AML/CFT) narrative, and reflects on policy effectiveness
and outcomes.
Findings –Interdictionrates in jurisdictions surveyed hardly constitutea rounding error in the accounts of
profit motivated criminalenterprises. The current AML/CFT model appears almost completely ineffectivein
disruptingillicit finances and serious crime.
Research limitations/implications –With such research at an early stage, some data are poorly
substantiatedand methodological inconsistencies rife.
Practical implications –For policy interventions with a reasonable prospect for crime not to pay,
beyond rhetoric,frank evaluation of results and a potential step-change in policy, regulatoryand enforcement
vision and capability,may be required.
Originality/value –Scholars haveexposed a paucity of meaningful links betweenAML/CFT controls and
crime and terrorism prevention,yet the dominant narrative persists largely unchecked. Thispaper examines
componentsof that narrative in the context of scholarship on “bullshit”.
Keywords Outcomes, Anti-money laundering, Financial Action Task Force,
Counter-terrorism financing, Policy effectiveness, Profit-motivated crime
Paper type Research paper
However beautiful the strategy, you should occasionally look at the results.
These words offer sage advice to look at the results of the global anti-money laundering
strategy. Widespread attribution of the ‘quote’to Winston Churchill addresses another
feature of this article. It may not be possible to prove Churchill didn’t say it, butabsence of
verifiable substantiation suggests that its provenance matches the abbreviated word
repeated in the title.
Introduction
Responding to a general reluctance to “call a spade a spade”(Rider, 2013), this article frankly
asserts that the current anti-money laundering/counter-financing of terrorism (AML/CFT) model
is almost completely ineffective in disrupting criminal finances and profit-motivatedcrime.
The Financial Action Task Force (FATF) as global standard-setter has been so
successful promoting adoption of AML/CFT controls that in less than three decades a
standardised template of policies, regulations and institutions is now globally ubiquitous.
Nearly every country and jurisdictionhas implemented extensive AML/CFT controls. They
JFC
25,2
294
Journalof Financial Crime
Vol.25 No. 2, 2018
pp. 294-308
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-08-2017-0071
The current issue and full text archive of this journal is available on Emerald Insight at:
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