ACAMS Today Magazine (Nov-Dec 2008) Vol. 7 No. 6 | Page 27

AML AROUND THE WORLD insurance companies, lawyers, casinos, accountants, real-estate agents, etc. The response from the sector has been variable, and it would be fair to say that cooperation has increased in line with the increase in legislation forcing cooperation! Where does information go and what happens with it? This should be no surprise, as complying with the law often means loss of business, and it certainly means increased staffing and infrastructure costs. Companies often say frequently in their statement of ethical behavior, that they would not wish to do business with criminals, and this legislation helps them to fulfill that wish. To be fair, however, a great but necessary burden has been placed upon the regulated sector, and the most common complaint heard at any gathering of compliance officers is that of the “black hole,” the black hole where all the information and reports go when they submit them, never to be seen or heard of again. Feedback equates to higher levels of prevention It might be said that it is of no concern of the banks and others what happens to that information once submitted; and that is a valid point, especially when weighed against the anonymity guaranteed to the maker of the report by the legislation. However, the essence of the complaint is not really some prurient desire to find out what happened but more to get some feedback as to actually what is or is not useful for the effective prevention and detection of crime and terrorism. The suspicion and risk-based approach of the system means that no definition is given of what should or should not be reported; so, the regulated sector says that any feedback would help direct their efforts in the most efficient way. Providing some feedback to the sector in an informal way has been done for some years now by the police. Following the excellent response by the financial sector to the suicide attacks on London in 2005, the National Terrorist Financial Investigation Unit (NTFIU) invited financial sector representatives to seminars. At these meetings, the NTFIU gave them an indication of how their contribution assisted in the postincident investigation and other ongoing operations. This was not entirely, or even mainly, about the SAR regime; however, it gave information (albeit limited, owing to the sensitivity of the subject) back to the financial sector and helped those employed in it see some of the results of their efforts. A system that encourages reciprocal information flow On a wider scale and specifically in the SAR arena, sections 33 and 34 of the Serious Organised Crime and Police Act 2005 developed a system of ”gateways” through which information could be shared with anyone that SOCA thought appropriate. A system of “alerts” has also been developed to highlight particular issues or vulnerabilities to the FIU information providers. These alerts are formulated by a group made up of law enforcement officers and members of the industry, who have been vetted, or security screened, to a very high standard. This enables a two-way flow of information and a mutual understanding of the problems facing both the suppliers and receivers of information in the form of SARs. There have also been around 200 seminars and bilateral visits annually run by the FIU with the financial sector. Future “black hole” eradication hopeful— and helpful Whether or not the industry feels that these efforts are addressing their previous complaints— whether there is light escaping from the “black hole” is difficult to judge. Certainly the SARs Annual Report 2007 contains endorsements from private sector members, but only time will tell how effective these initiatives have been. What is difficult to deny is that the judicious use of sharing information is mutually beneficial wherever it is attempted. When one understands the motivations, the rationale and the obligations of the other party in a situation of mutual interdependence, there grows an appreciation of each other’s problems, and a united effort can be made to solve them. Hopefully the initiatives taken in the U.K. do produce results and are given an opportunity to develop A and expand. Simon Dilloway BSc(Hons), MSc, MSyI, principal, Lopham Consultancy, London, U.K., [email protected] www.ACAMS.org November / December 2008 | acams today 27