Editorial One
Issue 389 April 1, 2018
Were you surprised to read our report that Money-laundering is active in New Zealand and more than $135 billion is generated through the domestic criminal proceeds every year?
A National Risk Assessment Report has said that New Zealand is not immune to terrorists and fraudsters and that despite being a safe country, crime flourishes through money laundering and terrorism financing and harm communities.
Dizzying fines
The United Nations Office on Drugs and Crime reckons that every year crooks launder between US$800 billion and US$2 trillion that they have made from trafficking, prostitution, corruption and other misdeeds. Governments keen to crack down on money-laundering are increasingly slapping financial firms with dizzying fines for failing to spot suspicious transactions or for overlooking anti-money-laundering (AML) regulations. These rules are multiplying.
According to the Economist, the European Union’s fourth AML directive introduced a book’s worth of fresh regulations, and the next batch is already being drafted.
AML software
“To avoid falling foul of these new directions, financial firms are spending heavily on software that can detect transactions that should be blocked or flagged for human investigation. The software looks for attributes that have historically been linked to laundering, such as unusual transactional patterns. Cash deposits to an account via distant branches are suspect. So are jumps in transaction size or frequency,” the publication said.
AML software also hunts for transactions that may involve an entity or person on any of hundreds of watchlists, including lengthy ones of officials worldwide who might have enough power to peddle influence.
Last year software developed by SAS, an American firm, began to look for words and imagery on social media to identify, among other things, people with suspiciously lavish lifestyles.
SAS says rather more than half of transactions flagged result in the filing of a “suspicious-activity report” to authorities.
