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Money Laundering Regulations, Police State?

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  • spinbuster
    spinbuster Posts: 50 Forumite
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    I agree that most regulations have loopholes and can be exploited, but hopefully it will disrupt some criminals, admittedly not the criminals with good accountants
    Yes, we could speculate that Serious Organised Crime would buy its own solicitors e.g. to purchase property, and so evade notification to SOCA. Provided the money transferred to the vendor’s bank account is in keeping with sale price the bank would have no reason for suspicion.
  • spinbuster
    spinbuster Posts: 50 Forumite
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    bowlhead99 wrote: »
    So, I'm curious how you would propose to address the issue, other than voting UKIP in the hope that they ignore what the rest of the world is doing and maybe come up with something you prefer.
    Your contribution to the discussion is very thorough as usual, and your comments about UKIP were spot on. I took part in the anti-establishment vote because of a current concern i.e. EU: Democracy or Oligarchy?
    Yes I should suggest a solution and have uncovered one after a lot of thought. However, I am going to suggest it to a politician first and then report the results back to this post later.
  • spinbuster
    spinbuster Posts: 50 Forumite
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    dunstonh wrote: »
    perhaps you have something to hide and that is why you don't like it?
    This comment is in keeping with the “suspicion-based regime” referred to by Lord Jopling.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    spinbuster wrote: »
    I am advocating revision/amendment not abolition. Also, I believe all the major points in my post have been supported by a reference.

    Well, you gave a reference / example of how the anti money laundering regs should be implemented by solicitors which is broadly how the accountants etc do it.

    And you portrayed that very negatively, as if they were being made to be quasi-policemen; because you don't like the idea of those professionally handling funds or assets to have a duty to properly identify their clients and source of funds, and report suspicion in situations where a whether a reasonable trained person might find the activities suspicious. Because it's imperfect, and a hassle for the client.

    However, presuming a client acting illegally is not going to report himself to the police voluntarily, you didn't suggest who an earth else should do it, if it should not be the industry professionals who are actually moving the money and assets and regulated in those activities. As Lord Jopling said in the other article you quoted, "We did not question the utility of this; it is central to the fight against money-laundering."

    So, broadly the solicitors guidance rules are ok and you didn't really need to link them. Other than for the sensationalist value of being able to say, "this is shocking, the banks and the solicitors and accountants and government and police are *working together* to get the bad guys, we are in none other than a Big Brother State, let me just link to a 5-year-old article at the impartial see-both-sides-of-the-story website, "Big Brother Watch".

    You also postulated that the tipping off rules didn't work, and that acres of extra confidential data was now being held by the professional firms to be "leaked to criminals and terrorists". But I didn't see any "references" supporting whether the tipping off rules worked or not, or what if any personal data collected for AML purposes (above and beyond the transactional information already held) has been leaked from the professionals' files to criminals and terrorists on any noticeable scale in recent memory.

    You did give us some Telegraph links to the trouble HSBC has got into by failing to implement adequate procedures -shortfalls in many areas apparently across a large number of spot checks, though no real details given, and as mentioned by others, the regulations are principles-based. Likely most of these will be shortfalls against HSBC's own internal standards, just as many multinational businesses will have when subject to spot checks. The U.S.regulator flagged the problems but did not ban them from operating (presumably told them to improve). And eventually they got in trouble.

    However, after first telling us that it's outrageous for banks and solicitors and accountants and brokers to be expected to act as "unpaid policemen", I'm not sure that view is consistent with then moaning that one bank dealing in hundreds of trillions of dollars a year is not doing a good enough job at being an unpaid policeman.

    So, we wait with baited breath for your solution which revises how it all works. It's perhaps a little bizarre that you come to a savings and investment discussion board to ask what everyone thinks about the regulations, and then when challenged for your own solutions, you say you have come up with one but need to run it past a politician first.
  • Conrad
    Conrad Posts: 33,137 Forumite
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    I've had enquiries from people wanting mortgage info whereby they cannot prove the legitimacy of their deposit. A number of these have placed significant cash assets in Turkish Bank accounts that were for a while paying 10% interest I believe.


    They are always cagey and defensive about where the cash actually comes from. In all cases I felt no tax had been paid on this cash when 'earned' in the UK.


    Now they are keen to get back into UK real estate but no one will touch them with a barge pole and furthermore their cash in Turkey has lost significant value.


    It irks me because all too often they are the type that bemoan public services such as pot hole repair. They want the benefits of UK society but do not want to pay in.
  • Tiglath
    Tiglath Posts: 3,816 Forumite
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    spinbuster wrote: »
    Yes, we could speculate that Serious Organised Crime would buy its own solicitors e.g. to purchase property, and so evade notification to SOCA. Provided the money transferred to the vendor’s bank account is in keeping with sale price the bank would have no reason for suspicion.

    You know that SOCA no longer exists, right? Given personal liability on MLROs and 'reasonable grounds to suspect,' I think the system works fine. I suggest you get in touch with the JMLSG and make your suggestions though; they write the guidance notes that financial industry professionals implement.
    "Save £12k in 2019" #120 - £100,699.57/£100,000
  • dunstonh
    dunstonh Posts: 116,831 Forumite
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    I have seen several frauds over the years and they all involved Mr Average doing average transactions (either to begin with but then later stepping it up or just doing regular small amounts in the belief they would stay under the radar).

    The financial services employees/employers face imprisonment, massive fines, de-authorisation etc. When faced with that, I am sure you would have a different mindset.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • spinbuster
    spinbuster Posts: 50 Forumite
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    Tiglath wrote: »
    You know that SOCA no longer exists, right?
    OK. So, for clarity, which authority is now receiving the notifications?
  • spinbuster
    spinbuster Posts: 50 Forumite
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    BillJones wrote: »
    so why get so upset?
    I have as many concerns about where the regulations are not being applied as where they are being applied because of:-
    Financial Misconduct or Financial Crime?
    Too big to Fail.
    Establishment Power: “Do as I say, not do as I do”,
    Decreasing accountability as you approach the top.

    It’s all covered in this debate at:-
    http://www.publications.parliament.uk/pa/ld201213/ldhansrd/text/121218-0001.htm#1212186400091
    “Banks: Money-laundering” see 4th Question at 2.58pm “To ask Her Majesty’s Government whether they are satisfied that sufficient steps have been taken to prevent money-laundering by United Kingdom banks.”
    Unfortunately Lord Green did not participate see:-
    http://www.theguardian.com/business/2012/jul/19/hsbc-money-laundering-trade-minister-lords
    Would the debate have taken place if it had not been for our American cousins?
  • spinbuster
    spinbuster Posts: 50 Forumite
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    Re. Abuse of the Regulations
    dunstonh wrote: »
    There is no requirement by regulations. There are guidelines which are left open to interpretation and based on risk analysis. It would be rare for any info from AML checks to be useful for marketing purposes.
    If you are a financial advisor you are allowed to collect personal information from your clients. You cannot do the job without it. Selftrade is an execution only dealer. If you ask them for advice they politely tell you where to go.
    So why did they issue Fact finds to their clients?


    Are there any legal eagles out there who can comment on this?
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