Money Laundering:
We often hear about offshore financial centres, or “tax havens,” as a home for money launderers.
This reputation for offshore centres has built up over many years, commencing initially with the legendry Swiss bank accounts, identified by numbers only. In this context, offshore means offshore from an individual’s home country; in other words, away from the prying eyes of the tax authorities and law enforcement. The use of numbered accounts was designed to achieve even greater anonymity.
Typically countries with small economies saw great opportunities to grow their wealth by attracting offshore banking business. The desire to increase income to the country by attracting offshore customers in large numbers, encouraged some countries and banks within those countries not to identify the individuals opening the accounts and not to ask where the money was coming from. Such actions had the immediate effect of encouraging criminals to launder their money through the weakest link in the law enforcement chain.
The response to this in recent years has been cooperation between law enforcement agencies throughout the world and a number of criminal prevention organisations. This cooperation has encouraged all countries to join the fight against organised crime.
Governments were asked to take positive steps to tackle the area where it hits the criminal the hardest, preventing him from using the money he obtained by criminal means. Such actions by governments have resulted in the situation (described last week’s article) that, before bank accounts are opened, the owners of the funds must always be identified and the source of the monies disclosed, and where necessary, verified. The governments make it law, and the bank’s must comply.
One such world body, the Financial Action Task Force, from time to time provides lists of what it refers to as Non Cooperative Countries. These countries are deemed to have extremely weak anti money laundering regimes.
Deservedly, the Turks and Caicos Islands is not one of those countries.
The impact to a jurisdiction in appearing on the list can be catastrophic. It will attract criminals who see the country as a loophole to enable them to launder or hide their money.
Secondly, it will deter any genuine law abiding customer from banking in the jurisdiction for fear that they become tainted with the bad reputation which will inevitably result from being associated with criminals.
Paul Coleman, vice president of compliance at International Banking Group, has more than 40 years experience in the banking industry. He is a professionally qualified expert in Operational and Business Risk, Internal Audit, Anti Money Laundering and Regulatory Compliance.
The views expressed are the opinions of the writer and whilst reflective of general policy implemented by IBG, there may be aspects of detail which may differ between this article and detailed procedures adopted by IBG. IBG accepts no liability for errors or actions taken on the basis of this information.
source: Offshore financial centers work to keep things legal
We often hear about offshore financial centres, or “tax havens,” as a home for money launderers.
This reputation for offshore centres has built up over many years, commencing initially with the legendry Swiss bank accounts, identified by numbers only. In this context, offshore means offshore from an individual’s home country; in other words, away from the prying eyes of the tax authorities and law enforcement. The use of numbered accounts was designed to achieve even greater anonymity.
Typically countries with small economies saw great opportunities to grow their wealth by attracting offshore banking business. The desire to increase income to the country by attracting offshore customers in large numbers, encouraged some countries and banks within those countries not to identify the individuals opening the accounts and not to ask where the money was coming from. Such actions had the immediate effect of encouraging criminals to launder their money through the weakest link in the law enforcement chain.
The response to this in recent years has been cooperation between law enforcement agencies throughout the world and a number of criminal prevention organisations. This cooperation has encouraged all countries to join the fight against organised crime.
Governments were asked to take positive steps to tackle the area where it hits the criminal the hardest, preventing him from using the money he obtained by criminal means. Such actions by governments have resulted in the situation (described last week’s article) that, before bank accounts are opened, the owners of the funds must always be identified and the source of the monies disclosed, and where necessary, verified. The governments make it law, and the bank’s must comply.
One such world body, the Financial Action Task Force, from time to time provides lists of what it refers to as Non Cooperative Countries. These countries are deemed to have extremely weak anti money laundering regimes.
Deservedly, the Turks and Caicos Islands is not one of those countries.
The impact to a jurisdiction in appearing on the list can be catastrophic. It will attract criminals who see the country as a loophole to enable them to launder or hide their money.
Secondly, it will deter any genuine law abiding customer from banking in the jurisdiction for fear that they become tainted with the bad reputation which will inevitably result from being associated with criminals.
Paul Coleman, vice president of compliance at International Banking Group, has more than 40 years experience in the banking industry. He is a professionally qualified expert in Operational and Business Risk, Internal Audit, Anti Money Laundering and Regulatory Compliance.
The views expressed are the opinions of the writer and whilst reflective of general policy implemented by IBG, there may be aspects of detail which may differ between this article and detailed procedures adopted by IBG. IBG accepts no liability for errors or actions taken on the basis of this information.
source: Offshore financial centers work to keep things legal
