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