NCJ Number
208186
Journal
British Journal of Criminology Volume: 44 Issue: 4 Dated: July 2004 Pages: 582-594
Date Published
July 2004
Length
13 pages
Annotation
Based on a research study, this paper examines one aspect of the relatively new regime for preventing and/or detecting money laundering in the United Kingdom, i.e., the process used to identify suspicious customers of financial institutions.
Abstract
In the United Kingdom the Financial Services Authority is responsible for regulating all listed companies that offer financial products and services. This includes the imposition of regulations designed to prevent these companies from becoming conduits for injecting criminal proceeds into the legitimate economy (money laundering). In 2001, a survey was conducted on a range of issues regarding the financial sector's experience and views on the money laundering regulatory regime. In addition to the survey, a range of interviews was conducted with key personnel. Among the financial companies included in the survey sample, there was agreement with the regulators about the broad aims of identifying customers of the institutions, but the experience of implementing the regulations has led to serious concerns about its value. In the course of their daily business, financial companies have found that acquiring information on their customers can undermine positive customer relations. They expressed the need for a more risk-based approach that would focus on warning signs regarding the need to inquire further about a customer's affiliations and source of funds. Further, an across-the-board acquisition of detailed information on customers is costly. The survey findings suggest that the regulatory scheme must be based in empirical studies of the nature of money laundering schemes and the warning signs for a suspicious transaction that would require obtaining additional information on a customer. 4 tables and 31 references