The Risk Professional: "Clean Sheet" draft money laundering law proposed

He has now produced the draft law, which he has termed the Counter-Money Laundering and Anti-Financing of Criminal Conduct Act 2011.

The draft Act draws in both money laundering and the funding of future crime, including but not limited to terrorism, the responsibilities of businesses and citizens and the powers of the financial intelligence unit (FIU), as well as measures for compliance, risk management, investigations and asset freezing.

In 2011, Compliance Complete published a series of articles titled "What's Wrong with Counter-Money Laundering Laws?".

The articles promised that the author, Nigel Morris-Cotterill, would subsequently supply a draft law designed to improve on existing legislation.He has now produced the draft law, which he has termed the Counter-Money Laundering and Anti-Financing of Criminal Conduct Act 2011.

The draft Act draws in both money laundering and the funding of future crime, including but not limited to terrorism, the responsibilities of businesses and citizens and the powers of the financial intelligence unit (FIU), as well as measures for compliance, risk management, investigations and asset freezing.

On the face of it, the draft law might appear to increase the burden on financial institutions and other businesses, but this is counter-balanced by measures which simplify compliance and reporting, putting the burden of analysis onto the FIU and removing the demands that exist under current law and practice for financial institutions to make a qualitative assessment of suspicious activity.

The draft law changes the nature of the FIU. In many countries the FIU is purely an analytical department but the most successful FIUs are those that are a form of financial police. That model is defined in the draft law.

The draft law also simplifies the processes which relate to asset freezing/seizing/confiscation, borrowing the best parts from several different legal systems.

Much of the jargon and linguistic complexity that has plagued the drafting of counter-money laundering laws for more than a decade has been removed in this draft.That is not to say that it is in "plain English", but rather that it is structured simply and logically and without the multi-level "nesting" that has characterised many laws in recent years.

This also means that there is less need for "interpretative notes", "guidance notes" and other add-ons which increase the burden on the managers of financial institutions.The draft law is a new law, written from a blank page.

It is not beholden to sacred cows or political correctness. It has a specific purpose and it sets out to achieve this purpose while removing the opportunities for criminals to "forum shop" in order to swing between not-quite-identical legal systems and so avoid liability.

Complinet.Com

(Nigel Morris-Cotterill is Head, The Anti Money Laundering Network, ultimate parent of ChiefOfficers.Net. He is also a contributing editor at Complinet / Compliance Complete, part of the Thomson Reuters Accelus suite of information services)