PracticePeople In PracticeUS fails anti-money laundering test

US fails anti-money laundering test

The United States has failed to comply with 11 of the 28 anti-money laundering directives of the Financial Action Task Force.

The majority of these related to the control of criminal activity involving international money transfers.

The US failed to follow FATF recommendations regarding the examination of large and complex transactions, as well as guidelines for dealing with funds arising from suspected criminal activity, or suspicious behaviour by customers of financial institutions.

In addition it did not take adequate steps to ensure criminal organisations did not gain control of its financial institutions, the report found.

Reacting to these findings, the US Treasury said it was willing to ‘live with the results’ although it questioned the way the scores were tallied. Despite this it pledged its support for the FATF’s anti-money laundering drive.

But it is likely to be highly embarrassed by the FATF findings, as it is a member of the G7 group of countries which set up the task force in 1989, and has been vocal in its calls to end international money-laundering.

Only Mexico with 16 violations and Canada with 12 finished below the superpower on a list of 29 of the world’s most industrialised nations.

Britain fared substantially better than its Atlantic-trading partner, having been found to comply fully on 24 recommendations, partially comply on three and only disregard one recommendation regarding majority-owned subsidiaries located abroad, due to lack of legislation.

Belgium, Brazil, Denmark, Germany, Greece, Ireland, Italy, Luxembourg, New Zealand and Norway all received a clean bill of health from the FATF.

On Friday last week, the FATF added six new names to a list of 12 countries deemed non-co-operative in the war against money laundering.

They now face the threat of severe economic sanctions and heavy trading losses.

Links

FATF ‘bad boys’ risk trade losses

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