Topic: a national money laundering strategy in place,

 

Topic:  A critical comparative analysis on the implementation of the Financial Action Task Force (FATF) Recommendations in UK & Australia to combat the illicit activity of anti-money laundering.

 

 

Abstract

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In order to deal with these perceived threats to their national economies and tax-bases, a range of anti-money laundering policies and legislative frameworks have been introduced in a number of jurisdictions, further considering its success in implementing international measures to combat money laundering.

 

Being a dominant concern, the Financial Action Task Force was established by the G-7 summit in Paris in 1989 and was soon renowned worldwide for developing a series of recommendations that are recognised as the international standards of combating money laundering and proliferation of weapons of mass destruction.

 

An examination as to how these instruments and proposals are put in place by a number of institutions including the United Nations, the Financial Action Task Force and the European Union, the dissertation initially sketches an expansion of the traditional global anti-laundering policy to comprise aspects such as having a national money laundering strategy in place, the implementation of international instruments and the role of government and regulatory agencies.

 

Thereby, the aim of this research is to give an overview of how far the global AML

Policy adopted by the three most developed countries namely UK & Australia have been successful in implementing the FATF Recommendations to combat the illicit proceeds of money laundering.

 

This dissertation critically starts with the discussion on the evolution and history in the light of money laundering. Secondly, it confers the evolution and importance of FATF which is one of the highlight of my research. Thirdly, separate chapters are made which demonstrates each of the legislative frameworks mentioning all the preventive measures that has been incorporated into their legal systems. Fourthly, it then seeks to provide an analytical summary of how and to what extent these policies have been effectively applied into the jurisdictions by stating the recent comments employed in the Mutual Evaluation Reports accessed by the FATF to sketch down the success and failures each has attained in implementing the FATF Recommendations into their legislative frameworks. Lastly, my concluding chapter reflects my view on the critical analysis and comments by comparing which country I discover as the most successful one in implementing the FATF Recommendations along with its reasoning.

 

 

 

 

 

 

Content

 

1.    Abstract…………………………………..

2.    Table of Contents………………………………

3.    Introduction…………………………………………….

o   Concept of Money Laundering………………………………

o   Development of anti-money laundering strategy……………

 

4.    Evolution of the Financial Action Task Force along with the FATF 40+9 Recommendations…………………………………..

 

5.    Policy Background/ Anti Money Laundering framework in the three developed countries:

 

o   UNITED KINGDOM

o   AUSTRALIA

o    

6.    comparative analysis onto the extent of successful implementation of the FATF   Recommendations between:

 

o   UNITED KINGDOM………………………………………………….

o   AUSTRALIA…………………………………………………………

 

7.    Conclusion……………………………………………………………………….

 

8.    Bibliography………………………………………………………………………

 

 

 

 

 

 

 

INTRODUCTION

 

The statistic that money laundering (ML) is a global phenomenon holding no direct harm, and has no direct negative effects on the society for lack of private interest in regulating ML, is taken as a big challenge and thereby, remains to have effective actions to regulate such activities onto the regulators. 1

The term ‘money laundering’ was first used at the beginning of the 20th Century to label the operations that in some way intended to legalise the income derived from illicit activity, thus facilitating their entry into the monetary flow of the economy. 2  Thereby, it is regarded as an old way of trying to hide illicit proceeds from drugs, fraud and other crime and take back into legal economy which became an international issue only in the last 20 years; and it is only since 9/11 that it holds a figure of a prominent issue of national and international safety on the agenda of the international organisation. 3

It has been initially argued the phrase ”money laundering” was used by Al Capone in the 1930s who used launderettes for disguising illegal alcohol revenues during prohibition of US Launderettes, a flourishing business4 and was also taken as an old technique to circumvent government scrutiny as asserted by Zdanowicz.5

As per to the Black’s Law Dictionary Free Online Legal Dictionary money laundering is “taking money gotten illegally and washing or laundering it so it appears to have been gotten legally”.6 On the other hand from a legal point of view, Achillies Heel has defined ML by relating it with the so called ‘predicate offences’ which generate the proceeds that make laundering necessary7 and was also clarified of not being termed as a ML activity unless hiding the source of money was not obtained from a criminal activity (Busuioc 2007).8

The jurisdictions of UK as well as EU generally amounts ML9 as taking action with any form of property,10 derivative of a criminal act that will disguise the fact that  property is the proceeds of a crime or obscure its beneficial ownership.11 In other jurisdictions, such as the US ML is recognised mostly by way of being engaged in financial transactions to conceal the identity, source, or destination of illegally gained money, whereas in other cases the offence of ‘handling’ the proceeds of crime suffices to include ML.12 Moreover, Australia being one of the largest financial markets in the Asia-Pacific region is also found to be very susceptible to illicit financial activities presenting its first AML legislation in the 1980s.13

Nevertheless, ML being known as the process by which criminals disguise the original ownership of the proceeds of criminal conduct (dirty money)14 by making such proceeds appear to have derived from a legitimate source.15  The process involves resorting to transactions, real or imagined, that is intended to confuse the onlooker and confound the inquirer.16 Hence, misrepresentation is the key to the laundering process which involves three stages; namely, placement, layering, and integration.17

1 Brigitte Unger and Daan Van Der Linde, Research Handbook on Money Laundering (2013)

2 Nicholas Ryder, Money Laundering- An Endless Cycle? A Comparative Analysis of the Anti- Money Laundering Policies In the United States of America, the United Kingdom, Australia and Canada (published on 2012)

3 Dennis Cox, Handbook on Anti Money Laundering (published on 2014)

4 Brigitte Unger and Daan Van Der Linde, Research Handbook on Money Laundering (2013)

5 Brigitte Unger and Daan Van Der Linde, Research Handbook on Money Laundering (2013)

6 Tracey A Anderson & Michael J Anderson, ‘Anti-money laundering: history and current developments’ 2015

7 Brigitte Unger and Daan Van Der Linde, Research Handbook on Money Laundering (2013)

8 Brigitte Unger and Daan Van Der Linde, Research Handbook on Money Laundering (2013)

9 The definition given under Art.1 of Council Directive 91/308/EEC

10 Includes intangibles as under Art3(3)2005/60/EC

11 The Common Law definition further expanded under the Proceeds of Crime Act 2002 Part 7 and the Money Laundering Regulations 2007.

12 A. Deitz & J. Buttle, Anti-Money Laundering Handbook. Sydney: Thomson Law book Co. (2008) Page-4

13 Nicholas Ryder, Money Laundering- An Endless Cycle? A Comparative Analysis of the Anti-Money Laundering Policies in the United States of America, the United Kingdom, Australia and Canada (Routledge: London, 2012) Page-5

14 Angela Veng Mei Leong, ‘Chasing dirty money: domestic and international measures against money laundering’ (2007)

15 INTERPOL, ‘Crime Areas – Money Laundering’

https://www.interpol.int/Crime-areas/Financial-crime/Money-laundering

16 Barry A K Rider, ‘The price of laundering dirty money’ (2006) Private Paper, Jesus College, University of Cambridge, Cambridge as cited by Angela Veng Mei Leong, ‘Chasing dirty money: domestic and international measures against money laundering’ (2007)

17Angela Veng Mei Leong , ‘Chasing dirty money: domestic and international measures against money laundering’ (2007)