Nicholas Gilmour and Tristram Hicks on what has gone wrong in the war against money laundering and what could be done to turn the tide
Money laundering is a scourge of the modern financial world. Whether it's the actual dirty money stretching its tentacles and influence widely, or the US$210 billion annual tick-box compliance effort as people and companies strive to meet anti-money laundering laws, the impact is massive.
In a new book, The War on Dirty Money, authors Nicholas Gilmour and Tristram Hicks detail the failings of the fight against money laundering and offer solutions designed to make the war more winnable.
Speaking to interest.co.nz for the Of Interest podcast, Gilmour describes dirty money as all money deriving from crime, and money laundering as a series of transfers and purchases as criminals strive to distance the money from the crime. The war against dirty money needs a better global response, says Gilmour, with New Zealand one of hundreds of countries where dirty money sloshes around.
Hicks points out the horrendously high death toll from the recent Turkish earthquake involves a "straight forward link" between corruption, dirty money and the loss of life because of corruption around building standards.
So is the war winnable?
"We think it is [but] it's going to be a difficult war to win. This is a global problem, it requires a global solution. But it is winnable and it's winnable in small increments. It's not going to be easy and it's going to mean that some people have to change their mindset completely, do a 180 degree change in their mindset," says Gilmour.
"The Financial Action Task Force [the global money laundering and terrorist financing watchdog] only looks at countries, it doesn't look at illicit financial flows between countries. We think that it could do that and we've proposed a way of doing it," Hicks adds.
Gilmour, now a consultant/advisor working with governments and the private sector on financial crime, analysis plus information and intelligence sharing, previously worked for the NZ Police Financial Intelligence Unit. Hicks is an advisor on the operational effectiveness of asset recovery and criminal justice anti-money laundering regimes.