NS Published book It shook the world of offshore finance in 2014. Global Shell Games has revealed that ne’er-do-wells can easily avoid money laundering and taxes using bank accounts held by anonymous shell companies. Book, NGO Since then, activism and numerous leaks (latest Pandora Papers earlier this month) have called for governments to increase corporate transparency. The United Kingdom and other countries have introduced public registration of company owners. The United States has passed a law ending the anonymity of shell companies.
But for what? The author of this book finishes off a study that suggests that little has changed. Banking and corporate service providers (CSPs) — Establishing a company for others — Meaning that you are at the forefront of the fight against financial crime does the terrible job of distinguishing legitimate prospects from those who are signaling danger. To do.
The three scholars behind the study, Jason Sharman of the University of Cambridge, and Daniel Nielson and Michael Findley of the University of Texas at Austin, have embarked on what they call a “mystery shopping expedition.” They registered shell companies with various risk profiles and sent over 30,000 emails to banks. CSP■ Open bank accounts in all countries of the world. The most dangerous look of these brass plate companies lived in high-risk locations such as Papua New Guinea and Pakistan. The safest looking was from Australia or New Zealand. In the meantime, there were shells from secret offshore shelters like the British Virgin Islands. In some documents, the author and his team pretended to be legitimate businessmen. To others as dangerous-sounding supplicants or real villains, like those on the sanctions list.
Global Money Laundering Prevention (AML) A system that has evolved since the 1980s under the Financial Activities Task Force (FATF), Multilateral institutions rely heavily on the private sector to get rid of dirty money. Banks must follow the “know the customer” rule to identify potential or “substantial” owners of potential clients.
Studies suggest that this “risk-based” regime has been broken. The authors found that different risk profiles “make little difference” in the willingness to open a bank account. CSPs was less sensitive to risk. (However, a bank in Singapore deserves praise for sniffing mice, saying, “Hey, you’re a man in a global shell game!”)
Research AML “We’re being pushed by the private sector, which can’t or can’t do that,” said Charmant. “Banks use standardized, general procedures that prevent or are unwilling to make the fine-grained risk decisions that the system requires.”
The conclusions are largely in line with previous studies by the author, but Sharman says he was surprised at the level of risk insensitivity because “some of our approaches were ridiculously dangerous.” Other experts will be surprised too. Scholars surveyed before the author went to shell shopping predicted that the study showed that the system was working much better than it was before the transparency reforms of the last five years.
NS FATF I know the system is far from perfect.Last year, its chief, David Lewis (who later resigned), acknowledged the people. AML The law was rarely used effectively. He also begged bankers to “stop checking the boxes.” Even before this study, institutions were considering that approach. You need more than tinkering. ■■
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This article was published in the print version of the Treasury and Economy section under the heading “Shell Games Continue”.
A new study finds that dirty money remains easy to hide Source link A new study finds that dirty money remains easy to hide