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唐朱昌
唐朱昌
教授,博士生导师。复旦大学中国反洗钱研究中心首任主任,复旦大学俄...
严立新
严立新
复旦大学国际金融学院教授,中国反洗钱研究中心执行主任,陆家嘴金...
陈浩然
陈浩然
复旦大学法学院教授、博士生导师;复旦大学国际刑法研究中心主任。...
何 萍
何 萍
华东政法大学刑法学教授,复旦大学中国反洗钱研究中心特聘研究员,荷...
李小杰
李小杰
安永金融服务风险管理、咨询总监,曾任蚂蚁金服反洗钱总监,复旦大学...
周锦贤
周锦贤
周锦贤先生,香港人,广州暨南大学法律学士,复旦大学中国反洗钱研究中...
童文俊
童文俊
高级经济师,复旦大学金融学博士,复旦大学经济学博士后。现供职于中...
汤 俊
汤 俊
武汉中南财经政法大学信息安全学院教授。长期专注于反洗钱/反恐...
李 刚
李 刚
生辰:1977.7.26 籍贯:辽宁抚顺 民族:汉 党派:九三学社 职称:教授 研究...
祝亚雄
祝亚雄
祝亚雄,1974年生,浙江衢州人。浙江师范大学经济与管理学院副教授,博...
顾卿华
顾卿华
复旦大学中国反洗钱研究中心特聘研究员;现任安永管理咨询服务合伙...
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上传时间: 2018-04-18      浏览次数:1406次
Improving our anti-money laundering operations will help prevent Great Power war


http://www.aei.org/publication/anti-money-laundering-and-great-power-war/


Interest is growing in illicit finance because Great Power competition is playing out in boardrooms, stock markets, trade wars, and compliance departments. The US anti-money laundering (AML) regime needs an update that enhances national security and sets an example for the rest of the world.


The US leads in crafting and enforcing global standards of financial integrity and accountability. However, like most US economic regulations, the current AML regime is a haphazard, ad hoc patchwork riddled with loopholes and inefficiencies. An illicit finance bill should encourage communication between and within compliance and law enforcement, safeguard individual privacy rights, and help smaller businesses and financial institutions. It has been 17 years since the last AML overhaul. It is time to address the clear and present danger — dirty money.


For the past thirty years Western democracies have actively and passively sought out economic integration with authoritarian states. Westerners hoped (and many still do) that modernization would create middle classes that demand rights. Investors and businesses simply saw new markets as opportunities to turn a profit.


Profits came to fruition, but economic integration morphed into a sort of messy imbroglio, or a rules-based liberal order entangled with opaque, violent, and kleptocratic authoritarians eager to bend the rules in their favor.


Currently, kleptocrats and their ilk can store and move wealth in the US anonymously. Some profit from breaking drug laws, others evade taxes, and many set up simplistic fraud schemes. Dastardly agitators use anonymous capital to support political and economic espionage, nationalistic violence, and religious zealotry.


The absence of clear and transparent rules in non-democracies (and among thieves) breeds instability, uncertainty, and violence. A simple first step toward protecting the US from these negative externalities is to require legal entities to register and verify their beneficial ownership (BO) at the time of incorporation.


The General Services Administration apparently cannot identify the ultimate beneficial owners of up to a third of high security leases. This means that unidentified Russians can, and might, own the buildings that the FBI leases to investigate Russian activities.


An investigative report recently uncovered thousands of planes in the US registered to companies known to use secrecy tactics to provide services to non-US citizens. Planes transport drugs — and, post 9/11, well.


New reporting and securing individual privacy rights


Thresholds for currency transaction reports (CTRs) and suspicious activity reports (SARs) are not adjusted for inflation. The estimated 55,000 SARs that the Financial Crimes Enforcement Network (FinCEN) receives every day are not being efficiently communicated or leveraged with simple, cheap, and powerful data science tools.


Legislation should ensure that reporting data (BO, SARs, and CTRs) will never be made public. But data sharing within and between financial institutions and law enforcement needs to be increased and modernized.


The problem is that privacy is now protected by effectively deputizing the financial sector. In the current threat environment this puts a massive amorphous burden on compliance departments. That cost is ultimately passed on to the consumer and hamstrings the effectiveness of law enforcement.


One solution is for FinCEN to host a basic BO dataset (such as name, address, ID) that compliance departments can access and search, verifying their own due diligence findings. This allows FinCEN to leverage big data analytical tools to easily find trends in CTRs and SARs. Also, more sensitive information remains in private hands.


How legislation can help smaller competitors


A small American shipping company has to turn a profit in order to pay its employees and stay open. A drug cartel-owned shipping company in the same town has no need to turn a profit. All it has to do is not get caught. It can and does swallow up fair competitors by seeking out legit accounts to cover its illegitimate activity.


Second, large government contracts have “set asides” for small businesses. Shell companies defraud the government by underbidding fairly competing small businesses for these set asides and then providing shoddy product or engaging in other schemes. Congress could also make it cheaper and easier for businesses to become a publicly-traded company.


Bottom Line: Updating the AML regime for the explicit purposes of creating a better business environment strikes a pragmatic balance between the duty of government to provide the public good of national security and the privacy necessary for free enterprise. Doing it before Great Power competition turns into Great Power war might just be what prevents that calamity and ushers in a brighter future.