The financial services authority and money laundering: A game of cat and mouse

Cambridge Law Journal

Volumn 67, Issue 3, 2008, Pages 635-653

  Ryder, Nicholas ^a  

^a NONE

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EID: 85012428548     PISSN: 00081973     EISSN: 14692139     Source Type: Journal    
DOI: 10.1017/S0008197308000706     Document Type: Article

References (126)

1. M. Yeandle, M. Mainelli, A. Berendt and B. Healy, Anti-Money Laundering Requirements: Costs, Benefits and Perceptions (London 2005), p. 11.
2. Joint Money Laundering Steering Group, Prevention of Money Laundering / Combating the Financing of Terrorism: Guidance for the UK Financial Sector Part I (London 2006), pp. 7–8.
3. The current statutory definition of money laundering is contained in the Proceeds of Crime Act 2002, ss. 327–340.
4. For a more detailed discussion of the Proceeds of Crime Act 2002 and money laundering see P. De Verneuili Smith, “POCA in Practice - Issues arising from Compliance with Pt 7 of POCA” (2007) 22 Butterworths Journal of International Banking and Financial Law 258–260.
5. See J. Robinson, The Laundrymen (London 1995), p. 12.
6. The Laundrymen., at pp. 11–29
7. P. Alldridge, Money Laundering Law (Oxford 2003), pp. 2–3.
8. M. Levi, R. Naylor and P. Williams, Financial Havens, Banking Secrecy and Money Laundering (New York 1998), p. 12.
9. (1982) 551 F Supp.314.
10. See also B. Buchanan, “Money Laundering - a Global Obstacle” (2004) 18 Research in International Business and Finance 115, at 120.
11. This Act was a direct response to the case of US v. Anzalone (1985) 766 F.2d 676 1st Cir.
12. J. Johnson and Y. C. D. Lim, “Money Laundering: Has the Financial Action Task Force made a Difference” (2004) 10 Journal of Financial Crime 7–22.
13. For a more detailed commentary on the international response to money laundering see M. Gill and G. Taylor, “Preventing Money Laundering or Obstructing Business” (2004) 44 British Journal of Criminology 582–594, at 583.
14. See for example the Proceeds of Crime Act 2002.
15. European Council, Directive on the Prevention of the Use of the Financial System to Launder Money 91/308, 1993 O.J. (L 166).
16. This Directive was implemented by Money Laundering Regulations 1993, S.I. 1993/1933.
17. For a more detailed commentary and analysis on the EU legislative framework and policy towards the prevention of money laundering see V. Mitsilegas and B. Gilmore, “The EU Legislative Framework against Money Laundering and Terrorist Funding: a Critical Analysis in Light of the Evolving Global Standards”, (2007) 56 International and Comparative Law Quarterly 119–140.
18. R. Spalek, “Regulation, White-Collar Crime and the Bank of Credit and Commerce International” (2001) 40 Howard Journal of Criminal Justice 166–179, at 167.
19. S. Maylam, “Prosecution for Money Laundering in the UK” (2002) 10 Journal of Financial Crime 157–158, at 158.
20. J. Harvey, “An Evaluation of Money Laundering Policies” (2005) Journal of Money Laundering Control 8(4) 339–345, at 340.
21. P. van Duyne, “Money Laundering: Pavlov's Dog and beyond” (1998) 37 Howard Journal of Criminal Justice 359–374, at 360.
22. M. M. Gallant, Money Laundering and the Proceeds of Crime (Cheltenham 2005), pp. 11–12.
23. A. Kennedy, “Dead Fish across the Trail: Illustrations of Money Laundering Methods” (2005) 8 Journal of Money Laundering Control 305–319, at 306–315.
24. For more examples of how money is laundered see HM Treasury, Anti Money Laundering Strategy (London 2004), p. 12
25. G. Baldwin, “The New Face of Money Laundering” (2003) 4 Journal of Investment Compliance 38–41.
26. FSA, Consultation Paper 46 Money Laundering - The FSA's new role (London 2000), p. 10.
27. NCIS, UK Threat Assessment (London 2003), p. 53.
28. K. Alexander, “The International Anti-Money Laundering Regime: the Role of the Financial Action Task Force” (2001) 4 Journal of Money Laundering Control 231–248, at 233.
29. Journal of Money Laundering Control., at p. 231.
30. D. P. Stewart, “Internationalising the War on Drugs: United Nations Convention against Illicit traffic in Narcotic Drugs and Psychotropic Substances” (1990) 18 Denver Journal of International Law and Policy 387–404, at 388.
31. For a more detailed commentary and analysis of the international attempts to reduce money laundering see A. V. M. Leong, “Chasing Dirty Money: Domestic and International Measures against Money Laundering” (2007) 10 Journal of Money Laundering Control 141–156, at 145–153.
32. SOCA, The UK Threat Assessment ofSerious Organised Crime (London 2006), para. 4.10.
33. As defined in the Financial Services Act 1986, s. 1(2).
34. Drug Trafficking Offences Act 1986, s. 24.
35. See D. G. McCormack, “Money Laundering and Banking Secrecy” (1995) 16 Company Lawyer 6–10, at 7.
36. See note 13 above. The 1993 Directive was amended in 2003 by the Money Laundering Regulations 2003, S.I. 2003/3075.
37. The EU published the Third Money Laundering Directive (2005/60), which was implemented via the Money Laundering Regulations 2007, S.I. 2007/2157.
38. See HM Treasury, Implementing the Third Money Laundering Directive: Draft Money Laundering Regulations 2007 (London 2007).
39. See note 13 above at Regulation 4 (1)(f).
40. For a more detailed discussion of the enforcement policy of the SIB towards insider dealing see A. Alcock, “Insider Dealing - How did we get here?” (1994) 15 Company Lawyer 67–72.
41. For a more recent commentary see B. Dubow and N. Monteiro, Measuring Market Cleanliness - FSA Occasional Paper 23 (London 2006).
42. See generally B. A. K. Rider, “Policing the City - Combating Fraud and Other Abuses in the Corporate Securities Industry” (1988) 41 Current Legal Problems 47–68.
43. Financial Services and Markets Act 2000, s. 6 (3)(a).
44. Financial Services and Markets Act 2000, s. 6 (3)(b).
45. Financial Services and Markets Act 2000, s. 6 (3)(c).
46. Financial Services and Markets Act 2000, s. 6 (4).
47. See for example FSA, Partnership Agreement between the National Criminal Intelligence Service and the Finanial Services Authority (London 2001).
48. A. Proctor, “Supporting a Risk-based Anti-Money Laundering Approach through Enforcement Action” (2004) 13 Journal of Financial Regulation and Compliance 10–14, at 11.
49. Members of the regulated sector are defined in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 S.I. 2001/544.
50. The FSA has a statutory objective to consult where it proposes to make any rules, Financial Services and Markets Act 2000, s. 155.
51. The FSA has the power to prosecute for breaches of the 2003 Money Laundering Regulations under the Financial Services and Markets Act 2000, s. 402.
52. FSA, Financial Services Authority - An Outline (London 1997), p. 31.
53. A risk based approach toward money laundering is also an integral part of the international community's policy towards reducing levels ofmoney laundering. See S. Ross and M. Hannan, “Money Laundering Regulation and Risk-based Decision Making” (2007) 10 Journal of Money Laundering Control 106–115, at 107.
54. M. Gill and G. Taylor, “The Risk-based Approach to Tackling Money Laundering: Matching Risk to Products” (2003) 24 Company Lawyer 210–213, at 212.
55. C. Sergeant, “Risk-based Regulation in the Financial Services Authority” (2002) 10 Journal of Financial Regulation and Compliance 329–335, at 333.
56. FSA, Financial Risk Outlook 2006 (London 2006), p.93.
57. Also see A. V. M. Leong, “Anti-money laundering measures in the United Kingdom: a review of recent legislation and FSA's risk-based approach” (2007) Company Lawyer 28(2) 35–42, at 41.
58. Ruth Kelly, (2002) Speech to the Financial Services Authority Money Laundering Conference, 11th July, p.3, available from www.hm-treasury.gov.uk.
59. FSA, Money Laundering Handbook (London, 2006).
60. The FSA adopted the MLR 1993 via the Financial Services and Markets Act 2000 Regulations (Relating to Money Laundering Regulations) 2001, S.I. 2001/1819.
61. S.I., at section 2.
62. S.I., at section 4.
63. S.I., at section 6.
64. For a detailed commentary on these issues see R. E. Bell, “The Prosecution of Lawyers for Money Laundering” (2002) 6 Journal of Money Laundering Control 17–26.
65. C. Nakajima, “Principle-based vs. Rule-based Regulation: The Implications for Governance” (2006) 27 Company Lawyer 129–130, at 129.
66. For a critical commentary see N. Ryder, “Financial Services: Diversity is the Key to Effective Regulation” (1999) 21 Business Law Review 62–65.
67. See FSA, Final Notice Investment Services UK Limited and Mr Ram Melwani (London 2005).
68. FSA, Money laundering - A Review of Credit Unions' Anti-Money Laundering Systems and Procedures (London 2004).
69. Also see SOCA, Serious Organised Crime Agency Annual Report 2006/2007 (London 2007), p. 12.
70. R. Berthoud and T. Hinton, Credit Unions in the United Kingdom (London 1989).
71. M. Chapman, A. Boyle, F. Rutherford and F. Wager, Credit Union Training and Skills Audit (Edinburgh 2004).
72. Fora more detaile ddiscussionon the impact of the FSA on the development of credit unions see K. Smyth, “Union City Blues” (October/November 2003) Scottish Banker 27
73. N. Ryder, “The Financial Services Authority and Credit Unions - A New Era of Regulation” (2003) 11 Journal of Financial Regulation and Compliance 241–249.
74. Credit Unions Act 1979, s. 1.
75. Registry of Friendly Societies, Credit Unions in Great Britain, A Review of the Years 1979–1995 (London 1996).
76. It must be noted that there are several other well documented factors that have affected the development of credit unions in the UK. See generally N. Ryder, “Out with the Old and In with the New? A Critical Analysis of Contemporary Policy towards the Development of Credit Unions in Great Britain” [2005] Journal of Business Law 617–639.
77. Credit Unions Act 1979, s. 15.
78. D. McKillop, J. Glass and C. Ferguson, “Investigating the Growth Performance of UK Credit Unions Using Radial and Non-Radial Efficiency Measures” (2002) 26 Journal of Banking and Finance 1563–1591, at 1582.
79. N. Ryder, “The Financial Services Authority and Credit Unions: The Final Piece of the Jigsaw?” (2002) 11 Nottingham Law Journal 17–32, at 23–24.
80. HM Treasury, Proposed Amendments to the CUA 1979 - A Consultation Paper (London 1999).
81. Proposed Amendments to the CUA 1979 - A Consultation Paper., at p. 11.
82. Proposed Amendments to the CUA 1979 - A Consultation Paper., at p. 4.
83. This review led to the publication of a new set of guidance notes for credit unions. See FSA, Anti-Money Llaundering Guide for Credit Unions (London 2004).
84. FSA, Consultation Paper - 5/10 - Reviewing the FSA Handbook - Money Laundering, Approved Persons, Training and Competence, and Conduct ofBusiness (London 2005).
85. Proposed Amendments to the CUA 1979 - A Consultation Paper.
86. FSA, FSA Handbook (London, 2006), at SYSC 3.1.1.
87. Proposed Amendments to the CUA 1979 - A Consultation Paper., at SYSC 3.2.6 R.
88. Proposed Amendments to the CUA 1979 - A Consultation Paper., at SYSC 3.2.6 H and I.
89. J. Bagge, “The Future for Enforcement under the new Financial Services Authority” (1998) 19 Company Lawyer 194–197, at 195.
90. Financial Services and Markets Act 2000, ss. 165–166.
91. Financial Services and Markets Act 2000, ss. 167–168.
92. Financial Services and Markets Act 2000, s. 169.
93. Financial Services and Markets Act 2000, s. 172.
94. FSA Press Release, FSA publishes results of money laundering investigation, FSA/PN/029/2001, March 8 2001, available from www.fsa.gov.uk.
95. Financial Services and Markets Act.
96. A. Whitehouse, “A Brave New World: the Impact ofDomestic and International Regulation on Money Laundering Prevention in the UK” (2003) 11 Journal of Financial Regulation and Compliance 138–145, at 140.
97. FSA Press Release, FSA acts with Police on money laundering concerns, FSA/PN/061/2002, May 30 2002, available from www.fsa.gov.uk.
98. Financial Services and Markets Act.
99. FSA, Money Laundering: the FSA's New Role - Consultation Paper 46 (London 2000).
100. Financial Services and Markets Act 2000, s. 402 (1)(a).
101. Financial Services and Markets Act 2000, s. 206 (1).
102. R. Sarker, “Anti-Money Laundering Requirements: Too much Pain for too little Gain” (2006) 27 Company Lawyer 250–251, at 251.
103. N. C. Morrison, “Money Laundering Legislation in the UK” (1995) 14 International Banking and Financial Law 3–6, at 4.
104. For a more detailed discussion of this legislation see the excellent commentary by R. Stokes and A. Arora, “The Duty to Report under the Money Laundering Legislation within the United Kingdom” [2004] Journal of Business Law 332–356.
105. See J. Wadsley, “Money Laundering: Professionals as Policemen” (1994) 58 Conveyancer 275- 288.
106. M. Isaacs, “Money Laundering Dilemmas for Banks” (2004) 19 Journal of International Banking Law and Regulation 284–288, at 284.
107. M. H. Fleming, UK Law Enforcement Agency Use and Management of Suspicious Activity Reports: Towards Determining the Value of the Regime (London 2005).
108. For a more detailed discussion of what amounts to suspicion see R. Bosworth-Davies, “CJA 1993: Money Laundering” (1994) 15 Company Lawyer 56–58.
109. SOCA, Review of the Suspicious Activity Reports Regime (London 2006), at p. 5.
110. KPMG, Money Laundering: Review ofthe Reporting System (London 2003), at p. 14.
111. Money Laundering: Review ofthe Reporting System., pp. 17–20.
112. Money Laundering: Review ofthe Reporting System.
113. FINCEN, The SAR Activity Review - By the Numbers (Washington 2006), at p. 1.
114. For a more detailed assessment and commentary about the US SARs regime see FINCEN, 1st Review ofthe Suspicious Activity Reporting Systems (Washington 1998)
115. N. Ryder “A False Sense of Security? An Analysis of Legislative Approaches to the Prevention of Terrorist Finance in the United States of America and the United Kingdom” [2007] Journal of Business Law 821–850, at 835–837.
116. Home Office, Report on the Operation in 2004 of the Terrorism Act 2000 (London 2004), at pp. 19–20.
117. Anon, “The Lost Trail - Efforts to Combat the Financing of Terrorism are Costly and Ineffective” The Economist, 22 October 2005, available at www.economist.com.
118. The Economist.
119. See R. Alexander, Insider Dealing and Money Laundering in the EU: Law and Regulation, (Aldershot 2007), p. 119.
120. The exact costs of the SARs regime are impossible to calculate. For an excellent commentary see P. A. Sproat, “The New Policing of Assets and the New Assets of Policing: a Tentative Financial Cost-Benefit Analysis of the UKs Anti-Money Laundering and Asset Recovery Regime” (2007) 10 Journal ofMoney Laundering Control 277–299, at 278- 288.
121. M. Roberts, “Big Brother isn't just Watching you, he's also Wasting your Tax Payer Dollars: an Analysis of the Anti-Money Laundering Provisions of the USA Patriot Act” (2004) 56 Rutgers Law Review 573–602, at 592.
122. See S. N. Welling, “Smurfs, Money Laundering, and the Federal Criminal Law: the Crime of Structuring Transactions” (1989) 41 Florida Law Review 287–339.
123. Home Office, One Step Ahead - A 21st Century Strategy to Defeat Organised Crime (London 2004). A copy of this report is available from www.homeoffice.gov.uk.
124. Serious Organised Crime and Police Act 2005, s. 2(1)(a).
125. Serious Organised Crime and Police Act 2005, s. 2(1)(b).
126. Serious Organised Crime and Police Act 2005, s. 3.