A significant change was made to my AML-ish life on 26 October 2005: on that date appeared the Third Money Laundering Directive, with the addition of “and terrorist financing” to its title, whereas First and Second had been pure money laundering. I was not convinced at the time that AML and (what has come to be known as) CFT belong together. The thinking, I suppose, was that they have some elements in common: they both involve those who wish to move their assets around the world without being subjected to too many questions, or without anyone wondering where the value has come from or what its ultimate destination and purpose might be. And indeed, some of our AML skills – asking questions, looking at source of funds, monitoring relationships – can be adjusted, refocussed if you will, to address terrorist financing. But it always seemed a bit lazy to me – a quick way for governments to say, there, we’ve covered TF as well as ML, and now it’s down to the regulated sector to get on with it.
From a personal perspective, it was an unfortunate development because I am much less interested in terrorist financing than I am in money laundering. I’m not saying that TF is less important or less socially damaging than ML – just that I find it less intellectually engaging, as it tends to be more simplistic and repetitive in method. It has taken longer than I thought it would for terrorist financiers to move to the more sophisticated end of the spectrum of financial services; as the most recent National Risk Assessment for the UK (published in December 2020) observes, “terrorist finance activity in the UK remains varied and typically low-level in scale [with] terrorists using tried and tested methods to move funds, including physically carrying cash out of the country, bank transfers and the use of money service businesses (MSBs)”. In short, it’s boring – whereas money laundering is infinitely varied and fascinating.
And my belief that the two endeavours – AML and CFT – do not belong together is borne out by the fact that most regulators now make it clear to their regulated community that they must produce two separate (or at least, distinct) business risk assessments: one for money laundering and one for terrorist financing. Some jurisdictions, such as Jersey, have gone even further and have produced entirely separate national risk assessments for the two. Of course the two are related, but they are more like cousins than fraternal twins. For the MLRO (and this soon-to-be-ex trainer) who has struggled to shoehorn the two disparate topics into one training session, this will be welcome confirmation that I Was Right All Along.
Well, that was exciting! After a slow-ish start, the auctions for the MLRO mugs and cufflinks really took off, and all six items were snapped up by happy bidders. In total, we raised an amazing £210 for Book Aid International, and I will be able to think of snappily-dressed MLROs sipping coffee in Guernsey and the UK. Many thanks to all bidders – and if you’re ever running a charity auction yourself, I can highly recommend Jumblebee as the hosting service.