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Elisa de anda madrazo fatf president - intelligence & risk solutions

For the first time in its history a female leads FATF. The Financial Action Task Force is a pseudo political global body that sets standards for jurisdictions to follow to combat money laundering and terrorist financing.

This male dominated talking shop (I don’t think it is remotely effective in its role and should be broken up) sets the standards for countries and jurisdictions to follow in an attempt to combat money laundering and terrorist financing.

For the first time a woman is leading it as the group’s President. Elisa de Anda Madrazo was duly appointed this year and will preside over the group as it navigates some challenging and choppy waters. I have reached out to her on Linkedin to put the case for tougher ‘recommendations’ to guide the globe more effectively in stopping money laundering and terrorist financing and here is why…

Some statistics.

  • The UN estimates $2,000,000,000,000 is laundered every year.
  • That’s up to 5% of global GDP every year.
  • Less than 1% is recovered.
  • We spend more trying to combat it than we recover.
  • Tax Justice Network estimates up to $32 trillion is hidden offshore.
  • Tax on that hidden money could raise $427 billion globally.
  • The Cayman Islands alone has over $6 Trillion in Hedge funds (legal but then really? $6 Trillion!)
  • There is more hidden money offshore than every US note and coin added to every Euro note and coin in circulation today.

Criminal and Terrorist Money

This is serious stuff. I’m not some naive ex-cop who is going to save the world but we simply have to get better at combating the criminals. They are sharper, smarter and more effective at hiding the money than ‘we’ are at finding them and it.

In almost every anti-money laundering success you find a whistleblower behind it.

  • Howard Wilkinson blew the whistle on a $230B scandal at Danske Bank
  • Xavier Andre Justo blew the whistle on the 1MDB $4B money laundering scheme
  • Pav Gill blew the whistle on Wirecard
Me talking about Acrintel – The intelligence system for Financial Institutes and non-financial businesses and professionals.

The point being, we have all the recommendations in the world but it is real people with honesty running through their veins that bring these things to light. Not the thresholds to cause suspicious activity reports, or the threshold to identify beneficial owners of businesses and entities.

In my email to the FATF President I asked her to review some of the below points.

  • Lower the threshold for Beneficial Ownership identities to be known to 10% (from 25%)
  • Commit to lowering it further to 5% in the next five years.
  • Bring in standards to force software vendors to build software that doesn’t help banks avoid fines but forces them to report it more effectively.
  • Create a global list of Trusts to identify the beneficiaries, trustees and trustors. To stop money being hidden in these opaque structures.
  • Create a global list of lawyers, entity registration firms, accountants and associated professionals involved in AML, corporate finance and/or offshore finance.
  • Set strict requirements, on pain of greylisting, for jurisdictions to report within 4 days of receiving a request from another jurisdiction surrounding money laundering or terrorist financing. And for inaccurate, misleading or missing intelligence to result in immediate greylisting.
  • Put in place recommendations for criminal sanction for professional enablers who flout the rules and profit on it.

Why?

I am not a rocket scientist and I do not hold a Nobel Prize for Economic sciences. And this makes the current state of global efforts to tackle money laundering and terrorist financing so frustrating. Because it isn’t rocket science at all. It just requires common sense initiatives to place restrictions on the movement of money without having ‘a’ name appended to it. No more opaque finance vehicles in palm fringed places, no more overly complex structures which have no sense in purpose other than to hide money and asset. No more moving money with little to no oversight.

Join me by messaging the FATF President and asking her to make her mark on history, not by being the first female FATF President to hold office – but by being the first to actually make adifference.

Message her via her Linkedin Profile What I can’t guarantee is she will read it.

Author Bio.

Andy Parr is a career detective and anti-money laundering expert. He served in the UK, Afghanistan and the Cayman Islands. He welcomes critical thought leadership and commentary to expand his own ability and advance the subject matter. Andy now leads HX5 Encrypted to help organisations get to the groundtruth in their organisation. Andy has led on every type of criminality you can think of. From murder to white collar crime and everything inbetween. Contact him to see how HX5 can help you.

Read all of Andy’s Posts here.