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Money Laundering Progress & Problems
Dr Bruce Lloyd, Professor of Strategic Management, at South Bank University , in discussion with Peter Lilley author of "Dirty Dealing: The Untold Truth About Global Money Laundering", Kogan Page (2000).
BL: Perhaps we can start by you outlining the core message of your new book?
PL: In my opinion, the core message is that money laundering is far more pervasive than people realise and that it is not just banks that are involved. A substantial amount of human misery is caused by this organised criminal activity and the vast amount of money that is being generated is being washed through banks, businesses and other vehicles around the world.
BL: Who is responsible for allowing this to happen?
PL: I think there are various degrees of responsibility. I believe banks, financial institutions and businesses, either through ignorance in some cases, or simply a reflection of the basic desire to generate profits in others, are turning a blind eye to it. In addition, in most parts of the world, individual regulation by governments, as well as international regulation, is very weak. Also the law enforcement agencies, and people who deal with the activity at an official level, are under resourced.
BL: I found a theme of your book was that these issues had always been with us, so what is changing today that makes the whole subject so much more important than it was – assuming I am right in my interpretation.
PL: For a start a combination of more globalization with the impact of the Digital Economy, means that it is now very simple for money to fly around the world in a second or two, literally from anywhere to anywhere. This is having its parallel in money laundering where operators identify weaknesses in the financial system, or any business system, that enable them to move substantial funds around the world without any effective controls and with lightening speed. One chapter in the book discusses what you can buy on the Internet and this includes driving licences, passports, anonymous credit cards which can all assist the money laundering process.
BL: Do you consider there are particular reasons for the apparently greater pressures today to do something about the whole issue of money laundering?
PL: Hopefully it is a reflection of higher ethical standards which we are trying to establish as the basis of our relationships, both personally and between organizations – and even between governments. Much of this pressure is driven by American legislation which is attempting to apply pressure across the globe, particularly as an attempt to control the drug industry; but it also covers other areas such as corruption. The basic assumption is that if you starve criminals of cash, you will reduce the level of crime.
BL: One point that appears to have been particularly important in the past twenty years is the impact of drug money although, perhaps, we shouldn’t forget that several respectable global corporations today made their fortunes out of the 19th century trade in opium. Has it just been the drug money issues that has forced the industrialized world to take the whole subject of money laundering much more seriously?
PL: It certainly has been drug money within individual domestic economies but it is the highly organized criminal groups across the world that both sold products and laundered the proceeds that governments are now trying to control, before they destroy a significant part of the social fabric, if not the society as a whole. Today we are talking about very large amounts of money that move around the world virtually control free.
BL: What do you think needs to be done to improve on the situation we have at the moment?
PL: First a simple step in the UK, as well as in other parts of the world, is that more resources need to be given to those people trying to police the money laundering situation we are discussing. Another example is the sophisticated computer system that they use in Italy, this technology could be used more widely.
BL: But what is the conviction rate on the back of all this information? Do the authorities do anything with the information in Italy?
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