Money laundering

If they handed gongs for money laundering, there would be knighthoods a plenty. The numbers are staggering. If you add the money involved in drug and people trafficking to gun running it comes to over 360 billion Dollars a year. That’s almost a billion Dollars being laundered every day.

(As an aside, a billion is a big number. To give you some idea a million seconds is about 11.5 days, a billion seconds is over 35 years. A billion is a big, big number).

But fortunately there’s an upside to money laundering. It’s often the trail left by the flow of illegal money that gives the forces of law and order the best chance of catching the criminals. Famously Al Capone’s notorious Chicago crime empire was brought down not by the FBI, but by the tax office.

That’s why there’s an extremely tight net of international legislation drawn to spot unusual money flow, and bring it to the attention of the long arm of the law.

The problem for us is the laws designed to catch the big fish can also bring the well-intentioned global mobility professional minnow to the attention of the boys and girls in blue.

Ignorance is no defence

Why? Well the law’s best hope of success often comes from bringing legitimate money movers such as banks and global corporates to their aid in spotting irregularity. That’s why the Proceeds of Crime Act 2002 makes it a criminal offence for you to fail to report knowledge or suspicions or even reasonable grounds for suspicion. So it comes under our responsibility of due diligence to be actively cautious and suspicious, and to report our suspicions.

Global mobility is particularly vulnerable because we often have to operate in a “pay now, worry later” way. This is not of our making. It’s just that we are often dealing with self-validated cross border cash payments in parochial emerging markets. Because the numbers we deal are often small and variable, they offer the perfect way to drip feed and legitimise money. It’s our job to spot the unusual.

Look for the irregular

The way we deal with this serious fiscal responsibility at Hessel is to have processes in place to look for unusual behaviours and patterns. For example, one unusually high gas bill is probably ok, but two or three similarly disproportionately large bills in a row need investigation. That’s not to say there’s necessarily anything going on, it may just be a particularly cold snap; but because it doesn’t fit the expected pattern we have to take a preventative “what if” approach. What’s more, as tipping off potential miscreants also falls under the purview of money laundering legislation, we have an independent and confidential external legal body our staff can consult if they have any suspicions, no matter how slight.

However you choose to address the issue, it’s critical you recognise your responsibilities and put effective diagnostic processes in place. You’ll also have the benefit of knowing you’re making life harder for the criminal.

If you’d like to know more about how we can help you make sure your company is compliant with global legislation, e-mail [email protected] .