translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microf... more translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.
The purpose of this paper is to examine the increasing emphasis of the UK anti-money laundering (... more The purpose of this paper is to examine the increasing emphasis of the UK anti-money laundering (AML) legislative framework, on the financial arrangements of criminals. Our qualitative study engaged key stakeholders from the AML environment through a series of focus groups. This included law enforcement; accountants; prosecutors; bankers and, importantly, ex-offenders. We argue that the inclusion of the views of a traditionally hard to reach group of ex-offenders, adds significantly to knowledge and understanding about effectiveness of AML. The research findings suggest that, at first glance, the focus on asset recovery has been successful. However, our respondents shared with us areas of tension and inconsistencies in application of the law, in particular between police and the courts. For example, whether it was better to prosecute the predicate offence separately or in addition to the offence of money laundering; or whether to pursue criminal or civil recovery. We further find that criminals have been able to use their knowledge to circumvent the system, suggesting that greater effort is needed to promote cooperation, rather than competition, in successfully detecting and prosecuting offenders.
Intergovernmental Action Group against Money Laundering in West Africa (GIABA) for providing a st... more Intergovernmental Action Group against Money Laundering in West Africa (GIABA) for providing a studentship and a grant respectively to Abdullahi Bello for the research.
The interest of economists in crime is not a coincidence or a diversion from the attention of the... more The interest of economists in crime is not a coincidence or a diversion from the attention of their strict discipline. Apart from personal harm, most crimes concern financial loss and damage or criminal revenue: all of these are economic variables. This interest is traced back by various academics to Becker’s seminal 1968 work “Crime and punishment: an economic approach” (see for example, Brennan and Eusepi, 2008; McCarthey et al., 2014; and Arnone and Borlini, 2010). However, the relationship between crime and money and, more generally, the positioning of criminal activity as a natural facet of capitalist society, goes back further in the literature which was mainly focussed on white collar and corporate crime (see for example Bequai, 1979; Braithwaite, 1988). For example, Naylor (2003, p.82) describes “the inherent economic logic of profit driven offences”. Naylor further drew attention to the lack of precision of the definition of ‘economic crime’. He noted that the terms economi...
The Criminal Entrepreneur: a case study of an organised criminal family
This chapter reports on a study of a criminal family with a history of armed robbery, drugs, secu... more This chapter reports on a study of a criminal family with a history of armed robbery, drugs, security, fraud and tax evasion. Our family ‘the Baxters’, and specifically one of their sons, ‘Jack’, operated in a city in the North of England. Data was obtained from individuals who were familiar with his career as it unfolded and was captured through interviews held with key respondents providing us with six hours of interviews that produced 89 pages of transcript. Studying a criminal over their working life is not new, indeed such ‘life-course criminology’ (van Koppen et al, 2010:102) has been used in the analysis of different career trajectories. Others have focused on the personality characteristics of criminals, exploring their pre-disposition to a certain type of criminal activity and on the persistence of life-long criminal careers. This chapter argues, however, that it is not only the type of personality that the criminal has developed but also their entrepreneurial business acum...
Human dimensions in organised crime, money laundering and corruption
Organised crime, whether or not in its Transnational manifestation, is usually depicted in huge t... more Organised crime, whether or not in its Transnational manifestation, is usually depicted in huge threatening dimensions. However, despite this sometimes superhuman representation one should not forget that we are dealing with a human phenomenon and, therefore, should not lose sight of the corresponding human dimensions. This also concerns related phenomena such as money laundering and corruption. This forces itself upon us when we look back at the threat images that have been put forward by the authorities as well as the media in the past decades. What threat has come true since, say, 1970 or 1980? We observe still the same (criminal) 'business as usual', together with the alleged accumulation of huge amounts of crime-money. However, these threat images are mainly presented from an 'underworld gaze' directed at the criminal exploits of hoodlums and thugs, 'under' the 'civilised' society and often viewed as coming from abroad. Meanwhile the criminal (un...
Learning more about the FATF: Knowing the tree by its fruits
The FATF prides itself on being the authority that sets global standards for combating money laun... more The FATF prides itself on being the authority that sets global standards for combating money laundering, the financing of terrorism and the proliferation of weapons of mass destruction. It is an inter-governmental organisation and in that capacity a “policy making body”. It does not present itself as a public organisation falling under some other super-ordinate public organisation or authority. It is funded with public money: all members contribute to its operations, roughly in proportion to the size of their economy (GDP). This also applies to the ‘FATF style regional bodies’: the FSRBs. As the whole undertaking is funded from the public purse these bodies should be publicly accountable. Given the inter-governmental status of the FATF, this accountability is assumed to work through the G-20 Heads of State and/or the “FATF-ministers”: the real principals of the FATF who decide on determining and prolonging its mandate. Naturally, the ministers and Heads of State are politically resp...
The Monty Python Flying Circus of Money Laundering and the Question of Proportionality
This chapter explores the approach to AML, mapping its evolution from the US and the war on drugs... more This chapter explores the approach to AML, mapping its evolution from the US and the war on drugs in the early 1980s through to the establishment of the FATF and global regulatory framework that we have in place today. We unpick the figures behind the threat narrative and the size of the money laundering problem, highlighting the lack of clarity over what is or is not being counted. Drawing data from the mutual evaluation process and its associated costs, we expose that the severity of the existing anti-money laundering policy fails the basic test of proportionality.
We started this work by looking back to the late 1980s and introduced in the first chapter a hypo... more We started this work by looking back to the late 1980s and introduced in the first chapter a hypothetical layman questioning the gravity of the laundering threat that has loomed above our heads for decades without it actually coming down. In the previous chapter we reintroduced this layman with his persistent plain question “What is all this good for?” In relation to the two main aims of combating money laundering: integrity and crime reduction. Trying to answer this question left us rather speechless. Must we admit that there is not sufficient material for a satisfactory answer? Or shall we prevaricate and say the question is not well phrased? That would be nonsense: the question is perfectly clear and simple. Maybe it is a matter of a disorderly ‘conceptual cupboard’ which needs a severe tidying-up. While doing so we may find the outlines of a correspondingly simple answer, provided there is adequate material.
The arrival of the Proceeds of Crime Act 2002 was widely regarded as contributing a significant w... more The arrival of the Proceeds of Crime Act 2002 was widely regarded as contributing a significant weapon to the armoury deployed in the fight against crime. For a government focused on proving the adage ‘crime does not pay’, it provided extensive powers of asset recovery. However, the agencies tasked with recovering those assets have had mixed success with the much maligned Assets Recovery Agency being disbanded and its role absorbed within the Serious Organised Crime Agency. The purpose of this paper is to consider some of the issues that have arisen in connection with the UK asset recovery regime asking if this approach was ever meant to make a substantive contribution to reducing criminal activity or if it was only ever merely symbolic, to be used as a means of legitimising government action that was grounded in the imagery of threat. In order to achieve these objectives, the paper draws on asset recovery data and information on agency costs for both ARA and SOCA. This data is sour...
Money-laundering: a global issue and scarce knowledge
Writing a book on a subject that surfaced 25 years ago looks like writing a contemporary history ... more Writing a book on a subject that surfaced 25 years ago looks like writing a contemporary history book. Given that the subject, in this case money laundering, is still perceived to be an acute problem, there is nothing wrong with looking back and raising questions about what happened, what went well and what went wrong.
It can often be elucidatory to explain to a layman what one is doing and for what reasons. The ‘t... more It can often be elucidatory to explain to a layman what one is doing and for what reasons. The ‘tabula rasa’ of the layman forces one to explain what has been taken for granted in the development of the mainstream discourse and routines. So, let us allow that hypothetical layman, as a kind of modern Candide, already briefly presented in the introduction, to wander through the AML territory. We will try to answer the questions bubbling up from his pure, ‘child-like’ ignorance.
Banks assessing corruption risk: a risky undertaking
The authorities have increasingly imposed tasks on business to lend support in the fight against ... more The authorities have increasingly imposed tasks on business to lend support in the fight against acquisitive crime, including corruption. Business is expected to risk-categorise partners and clients to know where to invest the most anti-corruption effort. Regulators’ focus on country risk as opposed to case-specific risk means business’ primary driver in risk-categorising partners and clients is their country rather than their conduct. This creates unhelpful bias. The situation is exacerbated by the lack of constructive guidance from legislators and regulators on risk assessment and mitigation. As a result, banks sitting on the frontline of the corruption-related anti-money laundering (AML) fight may choose to take a blanket approach by de-risking, i.e. deeming clients linked to a specific country as being outside risk appetite. This paper will examine: (i) how banks approach risk; and (ii) challenges banks face in the context of UK and US anti-corruption and related AML legislation...
Uploads
Papers by Jackie Harvey