In this series host Stephen Platt, interviews key figures in the world of financial crime prevention and examine successes and failures in the global fight against money laundering and related crimes including drug trafficking, bribery and corruption, sanctions evasion, human trafficking and tax evasion.
In the most recent episode of the AML Talk Show, host Stephen Platt was joined by Robert Mazur, former US Customs special agent and author of The Betrayal and The Infiltrator. Below is an excerpt from the transcript.
What he said was to secure an advantage and to be more effective, we need to do perhaps less, not more. And I thought that was very thought provoking because anti-money laundering has been characterized in recent years as inexorably involving more staff, more money, more expenditure. There are huge costs involved, but the industry’s compliance performance still leaves a lot to be desired. Do you think there’s something in the point that Martin makes? Do you think that if we were to do less, if we were to work smarter, we might achieve more?
Absolutely. I have always been a proponent of the risk based analysis. If I were involved in compliance in a international bank, I would … first of all, we have to recognize that we’re there. Yes, we are there for the purposes of filing these reports and hope that it’s going to be part of making a difference. But we also are there for the purposes of protecting the reputation of the institution. So in order to protect the reputation of the institution, dependent upon the terms imposed upon the banking industry by the regulators, we are going to unfortunately have to deal with some of that craziness of ticking the box until the regulators are told that ticking the box isn’t as important. Because we can have this idea of know your data, but we got to get them on board as well.
I would have an enhanced compliance section. My enhanced compliance section would be focused looking at accounts based upon geographic risk, business type risk, product type risk, transaction pattern type risk. Those issues would cause me as I got to know the portfolio well, and I spent time with the sales side so I know the portfolio well. Because of my background, I think I could identify those account relationships that have the very highest possibility of abusing the system for the purposes of moving illicit funds. And I would be focusing my enhanced group on those particular accounts and constantly being vigilant about the nature of the transactions.
And I would also want that enhanced segment to have an enhanced rapport with those within the law enforcement and regulatory world who as a team, we can work with using the Patriot Act and safe harbor to share information and then weed out from those in that one pile that we’ve come up with, which ones are the real, real problems. Which are the ones that we either need to onboard, or in some instances, the U.S. government or a government asks you to leave an account open because they want the intelligence that’s going through there. If that’s something that the institution wants to consider, then that’s something that could serve that purpose. But I really do believe that we need to recognize that all accounts cannot be handled the same way. If we continue to handle it that way, we create so much paperwork that’s useless, that we bog the system down. And for those within the financial intelligence units who try to make a positive achievement out of an analysis of those records, we make their job so much harder when we put all of that stuff in there.
You can also listen to the episode with the full transcript here.