“The Song Remains the Same”*
Financial war on criminals must include private sector
- Written by John Byrne
- Comments: DISQUS_COMMENTS
As the AML community continues to grapple with stepped-up regulatory criticism; the rather silly debate on “de-risking”; media selective “outrage” at fines and penalties; and the global challenges (“challenges” seems like such a benign word, by the way) of developing a financial response to ISIS and their apparent unlimited access to funds, the question remains:
“When will the government recognize that a strong compliance infrastructure to deter and report crime cannot occur without bringing the private sector in as true partners?”
As I wrote what I know is a diatribe, I received an e-mail from a “think tank” (oh please) that wants to discuss the “recent trend” on exiting accounts.
Are we in such a time that everything is new?
As a History major, it bothers me that so many don’t do the minimal amount of research to determine that some AML issues (only 30 years old, by the way) occurred before 2014.
Together we’re stronger
Back to my point.
A recent speech by Deputy Assistant Secretary for Terrorist Financing Jennifer Fowler on the status of the U.S. response to ISIL is very well crafted and details the countering of the financing. Yet it only references the private sector once—and not the U.S. private sector. Check it out yourself.
This is a constant problem for me, the fact that we have so many tremendous AML experts in the private sector but because of the issues mentioned above, there seems to be an artificial barrier to real private-public sector partnerships.
For those of you in the government, I certainly recognize that there are some vehicles for private-public sector information sharing. But in my humble opinion they are few and far between. Also, the sharing has been, at some times, with a select group and not broad enough to be effective.
We can make this better
So what can we do?
First, without a close connection to government partners, reading public documents and announcements regarding the recent activities of terrorist groups is the key.
Treasury’s Fowler emphasized that the US government will “ 1) continue to gather information and take steps to prevent ISIL from gaining access to the international financial system and cash resources; (2) disrupt ISIL's sale of oil, both through coalition airstrikes and by working and sharing information with regional partners; (3) press our foreign partners to abide by their UN Security Council obligations to prevent ISIL from benefitting from ransom payments; and (4) work to prevent donations from becoming a more important source of revenue to ISIL.”
Hard to see where the private sector can figure out how to help in this important mission without more direction from the government.
It is clear that determining the source of donations is a place to start. But with the counter-punching of regulators complaining about exiting account relationships, what is the right response?
Second, the other issue that troubles the traditional banking sector is that Fowler said that “[w]e remain concerned that money services businesses in ISIL-held territory continue to maintain connections to regional counterparts through which ISIL could conduct funds transfers.”
So, what is an AML officer to do? React to MSB relationships or not? With de-risking an issue hanging over everything, perhaps the previous statement will confuse the AML community?
All of this is just another example of what happens when policies are pursued without consulting the impacted group.
Can we change the song?
There is a long history of the private sector working with the military or intelligence communities in very difficult times. Yet I have never seen the lack of either consulting or referencing the value of the private sector as I have in the past several years.
What makes it more frustrating is how many AML professionals came from the government and have spent their careers working diligently to respond to attacks from drug cartels and terrorists.
Perhaps, current government officials can actually look at who is running AML and show some semblance of respect.
*Led Zeppelin, a major 70’s band, named a 1976 concert movie after an album of the same name.
Tagged under Compliance, Blogs, AML & Fraud, BSA/AML, ABA Viewpoints, Feature, Feature3,
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