Money_Laundering

Money Laundering: How effective is FATF in the Banking Sector within the UK' The objective of this paper is to examine the effectiveness of the Financial Action Task Force (FATF) in the banking sector. In order to examine the effect of FATF it is necessary to explore the measures taken by the U.K and the E.U and whether those measures were taken as a result of FATF. The measures taken to tackle money laundering have ranged from international measures by the E.U to new and amended legislation by the U.K. FATF’s influence has spread worldwide with its membership on the increase. Its success is evident from not only the passing of new legislation by the E.U and U.K but by the new proposals placed by the E.U Commission for a third directive incorporating FATF’s 40 recommendations. Money Laundering is generally concerned with the recycling of criminally derived funds through normal financial system operations with a view to making the funds available for future use while, at the same time, disguising their true source to protect them from seizure or forfeiture and criminal or civil prosecution.[1] There are various separate criminal and regulatory requirements which banks are subjected to in connection with anti-money laundering and prevention of terrorism activities. The aim is to attempt to prevent banks and banking markets from being used for criminal purposes. It also attempts to use the information and systems and controls that banks operate to detect such activity to allow separate prosecution and enforcement. The effect of laundering upon the banking system is frequently a particular concern. International efforts to combat money laundering commenced with the United Nations Vienna Convention 1998 and the Council of Europe Strasbourg Convention 1990. The Vienna Convention introduced an obligation to criminalise the laundering of money derived from drugs trafficking and measures to improve international co-operation. Stricter obligations were introduced by the Council of Europe Convention including investigative assistance, search and seizure and confiscation of the proceeds of all types of criminality. Such penal measures were paralleled by the work of the Basel Committee on Banking Supervision which issued a Declaration on money laundering in 1988 and the work of the Financial Action Task Force (FATF) on money laundering which was set up by the G7 in July 1989. Other regulatory control models have been developed by the Commonwealth, the European Community and the United States. These efforts in the money laundering area have been extended to include other anti-terrorist initiatives. What is FATF' The Financial Action Task Force (FATF) is an inter-governmental body and was set up by the G7 countries in 1989 whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering. FATF is a policy making body and monitors members’ progress in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter measures, and promotes the adoption and implementation of appropriate measures globally.[2] FATF has adopted as its working definition that money laundering would constitute either the conversion or transfer of property, the concealment or disguise of its true nature or source or the acquisition, possession or use of property knowing it to be criminally derived. It had also produced a final Report in 1990, which contained a 40 point programme to deal with money laundering and asset forfeiture on a global basis. This report also contains detailed annexes which considered money laundering operations in each of the15 participating countries and the statutory and regulatory responses adopted. FATF stated that money laundering involved three general stages or phases of operation of placement, layering and integration of funds. Placement involves the physical disposal of bulk cash proceeds from their location of acquisition to avoid detection. Layering was the separation of illicit proceeds from their source through the use of complex financial transactions to disguise their audit trail. Integration involved the conversion of the proceeds into a apparently legitimate business earnings through normal financial or commercial operations in the real economy. The first report by FATF was produced on 6 February 1990 (FAFT I).[3] This included a review of the programmes already in place, an examination of the extent and nature of the money laundering process and 40 recommendations of best practice. Articles 1-3 deal with the general framework, Articles 4-7 on national systems, Articles 8-29 on enhanced role of the financial system and Articles 30-40 on the strengthening of international co-operation. FATF has produced a number of further reports on an annual basis. The second report (FATF II) considered an assessment of implementation and enhancements to existing recommendations, the geographic extension of the FATF programme and following up work including self-reporting and mutual assessment and co-ordination of non-members activities. Money laundering typologies were published under FATF VII in 1996 which included the securities industry, insurance and cybertechnology. FATF has made a significant contribution to the development of best practice and improved co-operation in combating global money laundering. It remains the main international agency in this area. FATF, The Forty Recommendations Legal Systems Scope of the criminal offence of money laundering, R1-2 1. Provisional measures and confiscation, R3 Measures to be taken by Financial Institutions and Non-Financial Businesses and Professions to prevent money laundering and terrorist financing. 2. Customers should ensure that financial institution secrecy laws do not prohibit implementation of the FATF Recommendations, R4 Customer due diligence and record-keeping, R5-12 3. Reporting of suspicious transactions and compliance, R13-16 4. Other measures to deter money laundering and terrorist financing, R17-20 5. Measures to be taken with respect to countries that do not or insufficiently comply with the FAFT Recommendations, R21-22 6. Regulation and supervision, R23-25 Institutional and other measures necessary in systems for combating money laundering and terrorist financing. 7. Competent authorities, their powers and resources, R26-32 8. Transparency of legal persons and arrangements, R33-34 International co-operation 9. Countries should take immediate steps to become party to and implement fully the Vienna Convention, the Palermo Convention, and the 1999 United Nations International Convention for the Suppression of the Financing of Terrorism. Countries are also encouraged to ratify and implement other relevant international conventions, such as the 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and the 2002 Inter-American Convention against Terrorism, R35 10. Mutual legal assistance and extradition, R36-39 11. Other forms of co-operation, R40 The Basle Committee and the E.U, the impact of international initiatives. The impact of international initiatives on the United Kingdom’s system of banking regulation in recent years has been profound. Two separate supra-national bodies were involved, the E.U and the Basle Committee on Banking Supervision. It was in response to the serious concerns which arose with regard to the stability of the international financial system in 1974, that two courses of action were undertaken by the central bank Governors of the Group of 10 industrialised countries (G10) of the Organisation for Economic Co-operation and Development (OECD). A support Communiqué was initially issues by the Governors in an attempt to stabilise the markets while a separate standing committee on regulatory and supervisory practices was also set up to report to the Governors on the development of possible means of preventing similar crises occurring in the future. The EEC Commission set to work seriously to make a reality in the banking sector the rights to freedom of establishment and freedom to provide services. The EU’s response is based on two Directives adopted in June 1991 and November 2001. Two Regulations have also been adopted within the EU to implement UN Security Council resolutions requiring states to interdict terrorist financing. The First banking Directive was intended as the first of a series of measures having their final aim the introduction of uniform authorisation requirements for credit institutions throughout the EU. It introduced a requirement for member states to require credit institutions to be formally authorised in order to carry on business, and imposed certain minimum conditions which all member states were required to impose. In the UK this Directive was implemented in the Banking Act 1979. At the same time, the Basle Committee had been formed in recognition that the growing globalisation of banking required international co-operation between banking regulators. Unlike Directives produced by the EU, the pronouncements of the Basle Committee have no legal force and formally their status is effectively that of recommendations. The focus of the Basle Committee is on internationally active banks and on containing risk, in particular the risks which banks authorised in one state may pose to banks authorised elsewhere and to the international financial system generally. The primary focus of the EU has been the creation of a single market in banking services within the EU. The EU is concerned with minimum regulatory standards not solely for the sake of systemic stability but also for the significant competitive implications of uneven standards. The first product of the Basle Committee was the Concordat of 1975. This contained general guidelines for the division of responsibilities between different national regulators, for example, the host state regulator was to be responsible for supervision of solvency. The Concordat also made recommendations for practical co-operation in areas such as the sharing of information and inspections of supervised institutions. There was no need for specific U.K legislation to implement these recommendations, it being sufficient for the necessary adjustments to be made to the Bank of England’s supervisory policies and procedures. The next major development by the Basle Committee was in the field of consolidated supervision, the 1983 Agreement. This followed within a month by the EU’s First Consolidated Supervision Directive. The first Consolidated Supervision Directive covered much of the same ground as the 1983 Agreement but was much more specific in identifying the types of institution which were required to be included in consolidation. Five resolutions had been adopted by the European Parliament in 1985, with the set up of a Committee of Inquiry on ‘The Drug Problem’ and ‘The Role that the Drug Trafficking Played in Spreading Crime and Destabilising the Established Authority’. This was accepted and followed by a declaration being issued by the Community’s Justice Minister, in which it was proposed that practical guidelines should be established for freezing and confiscating the assets of drug traffickers in an effective fashion. A seven-point action plan was then endorsed in the U.K in 1986 which included the provision for the prosecution of those involved in illegal narcotics trade and for a system of drug asset confiscation which was to be applied throughout the Community. In 1988 the Vienna Convention was adopted after the International Conference on Drug Abuse and Illicit Trafficking. This provided for the criminalisation of the laundering of drug proceeds through the financial system and included specific provision for the extradition of money launderers, mutual or legal assistance, the transferring of laundering proceeds, the lift of bank secrecy in criminal investigations and the confiscation of laundered property. When FATF was set up it included a requirement that national criminal laws adopt a specific money laundering offence, the development of the role of the banking system to prevent abuse by the money laundering industry and the strengthening of international co-operation based on the facilitation of extradition of suspected criminals and proper ratification and implementation of the Vienna Convention. As the money laundering defences of the banking sector have become stronger, money launderers have sought alternative ways of disguising the criminal origin of their funds. This trend has been clearly noted by the Financial Action Task Force (the foremost world anti-money laundering body, to which the Commission and all EU Member States belong together with 11 other countries and the Gulf Cooperation Council) and by the UN, with frequent reports of the services of lawyers and accountants being misused to help hide criminal funds. There have also been numerous cases where the real estate sector is used to launder money from criminal activity. A proposal for a European money laundering directive was issued in 1990 and adopted in 1991. The First Money Laundering Directive This directive was designed to prevent money laundering through the exploitation of the Single Market in financial services which included the free movement of capital within the Community and freedom to provide banking services. Under this Directive the objective to be achieved is to secure the standards and stability of credit and financial institutions and confidence in the financial system as a whole which would otherwise be seriously jeopardised through activities of money launders. To is to be achieved by ensuring that all Member States ensure that money laundering is prohibited, particularly by the establishment of systems to ensure that credit and financial institutions carry appropriate consumer identification procedures and keep adequate records of all suspicious transactions and to extend the scope of the Directive to all professions and entities involved in unregulated large cash transaction areas. It also applies to all credit institutions under the First Banking Directive and other institutions and activities listed in the Annex to the Second Banking Directive. Money laundering is defined under the Directive as including: (a) the conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade their legal consequences of their action; (b) the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to or ownership of property, knowing that such property is derived from criminal activity or from a act of participation in such an activity; (c) the acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activities; and (d) participating in, association to commit, attempt to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned above. The Directive directs credit and financial institutions to require identification of customers by means of supporting evidence especially on opening accounts, savings accounts or safe custody facilities. This also applies to any transaction involving a sum amounting to Euro 15,000 or more. There are reporting obligations with this directive. Any information which may indicate money laundering must be reported to the relevant authorities by the directors and employees of credit or financial institutions. Adequate procedures of internal control must be set up and all employees made aware of the requirements of the Directive. Any other information discovered by competent authorities responsible for the regulation or supervision of credit or financial institutions which indicates money laundering must also be reported to the money laundering authorities. The provisions can also be extended to apply to other professions. Disclosure in good faith under the terms of the Directive is nevertheless exempt from any liability for breach of disclosure of confidence. A contact committee was also set up to facilitate the harmonised implementation of the Directive and consultation between member States. The Second Money Laundering Directive This was introduced to amend the First Directive or second the First Directive. It was to correct some of the inadequacies in the First Directive. The are five main amendments. Firstly, money laundering is extended beyond drug trafficking to include the proceeds of all serious crime. This includes the offences set out in the Vienna Convention and the Joint Action 98/733/JHA. Secondly, the Directive is extended to include non-financial activities and professions considered to be vulnerable to laundering abuse. The European money laundering requirements are now extended to include credit institutions, financial institutions, auditors, external accountants and tax advisers, real estate agents, notaries and other independent legal professionals, dealers in high-value goods and casinos. This includes notaries and other legal professionals to the extent that they either assist the planning or execution of transactions for their clients concerning the buying and selling of real property or business entities, managing client money, securities or other assets, opening or managing bank, savings or securities accounts, organising contributions necessary for the creation, operation or management of companies and the creation, operation or management of trust, companies or similar structures as well as by acting on behalf of and for their client in any financial or real estate transactions. Thirdly, the institutions which are covered by the Directive are required to take all reasonable measures to obtain information as to the real identity of the person on whose behalf those customers are acting. Fourthly, the Directive also refers to its provisions where notaries and independent legal professionals act in connection with financial or corporate transactions including providing tax advice. A number of practices for money laundering have been structured as tax related to avoid suspicion or investigation. Such structures mat be supported by the using nominee directors and shareholders to conceal the identity of the persons managing and controlling the company’s affairs. Solicitors are also advised to establish the true identity of beneficiaries in any case where fiduciary, nominee accounts or trusts are involved. Fifthly, the directive also has an express exemption provision for privileged information. The United Kingdom’s response to Money Laundering The UK has introduced various measures and legislation as a result of FAFT and the European Directives. This includes the Money Laundering Regulations in 1993, 2001, 2003 and the Financial Services and Markets Act 2000 which includes a Money Laundering Sourcebook. In addition there are the Joint Money Laundering Steering Group Guidance Notes (December 2003). The UK implemented the 1991 European Money Laundering Directive under the Criminal Justice Act 1993 and added further offences to the Criminal Justice Act 1988. The UK also issued separate Money Laundering Regulations in 1993, 2001 and 2003. The Proceeds of Crime Act 2002 consolidates the money laundering offences in the Criminal Justice Act 1988 and the Drug Trafficking Act 1994. Moreover, the Act covers conduct abroad which would be an offence in the UK if it occurred there. Laundering of the proceeds of drug related crime was originally introduced under the Misuse of Drugs Act 1971 and restated under the Drug Trafficking Offences Act 1986 which imposed a specific offence on assisting another retain the benefit of drug trafficking. This Act was extended by the Criminal Justice (International Co-operation) Act 1990 after the ratification of the Vienna Convention 1988. The Act includes offences of concealing, disguising, converting or transferring the proceeds of narcotics and to carry out any activities listed on knowledge or reasonable suspicion that the proceeds are drug related. Under the Prevention of Terrorism (Temporary Provision) Act 1989 separate offences were imposed in connection with terrorist activity. This includes offences of facilitating another retain or control terrorist funds and concealing, removing from the jurisdiction or transferring relevant funds to nominees. All these offences have been extended under the Criminal Justice Act 1993, in force on 1 April 1994. The Act was extended to apply to any person who acquired, possessed or used narcotics proceeds with knowledge of their criminal origin. It also included two defences of adequate consideration and knowing disclosure. The revised provisions were set out in Part III of the Criminal Justice Act. This includes offences with regard to assistance, acquisition, concealment and tipping off. Under the Directive the obligation placed on banks to co-operate with the authorities. They must, in particular, from their own initiative inform the authorities of any fact which may be indicative of laundering. In the UK this means it is an objective test that a bank must disclose not only if it knows or suspects but also if it has reasonable grounds for knowing or suspecting that a person is engaged in money laundering. This includes the case of a branch of a UK bank in a foreign jurisdiction with bank secrecy legislation, which has knowledge or suspicion, or ought to have, about money laundering in an account. In deciding whether a bank has met this standard, the Act allows the court to take into account whether the bank complies with the Guidance Notes on the Joint Money Laundering Steering Group.[4] A bank must not disclose to customers and third parties that a disclosure has been made if this is likely to prejudice a possible investigation (tipping off offence). Having proper procedures in place to prevent money laundering is now a continuing requirement for a bank to be authorised to conduct business under the Financial Services and Markets Act 2000. The ‘soft law’ Some lawyers such as William Blair, regard any rules and guidance that are not statute based, as ‘soft law’. For the purposes of money laundering these are the regulatory requirements set out in the FSA’s (Financial Services Authority) money laundering source book and the Guidance Notes from the JMLSG (Joint Money Laundering Steering Group, which consists of a number of associations with members in the financial sphere). The application of such rules and guidance is not mandatory, in determining whether the Money Laundering Regulations have been complied with, a court may take account if this guidance.[5] Since the FSMA (Financial Services and markets Act 2000) came into force the prevention of money laundering has become one of the responsibilities of the financial regulators. The FSA has therefore produced a money laundering source book. This sets out a mix of regulatory rules and guidance. The purpose of the sourcebook is to ‘require [firms] to have effective anti-money laundering systems and controls, in order to reduce the opportunities for money laundering’.[6] The sourcebook also requires firms ‘to ensure that approved persons exercise appropriate responsibilities in relation to these anti-money laundering systems and controls’. Although the sourcebook applies to the firm, it will not exonerate an approved person from liability for breaches of the rules. The FSA’s guidance report states that the Money Laundering Sourcebook contains rules that require firms to make use of UK government and FATF findings on countries and territories whose anti-money laundering procedures are below internationally accepted standards. As a result of an adverse report of FATF, there are now UK money laundering controls for bureaux de change, money transmission agencies, and those cashing cheques.[7] In 2000 a FATF report identified a number of jurisdictions, the non-co-operating jurisdictions, where the anti-money laundering controls had serious systematic problems. Some jurisdictions have subsequently been removed from the list. UK banks must take into account FATF conclusions of inadequacy regarding particular jurisdictions in entering transactions. The Money Laundering Regulations 1993, 2001 and 2003 These regulations implement the 1991 EU Directive. In the Money Laundering regulations, money laundering is defined as doing any act which constitutes an offence under the Drug Trafficking Act 1994, the Criminal Justice Act 1988 and the Proceeds of Crime Act 2002. The Money Laundering Regulations require banks and investment businesses to maintain systems and training to prevent money laundering, and to maintain identification, record keeping and internal reporting procedures. The Money Laundering Regulations 2001 extend the regime to bureaux de change, cheque cashers and money transmission agents. Failure to follow the regulations is an offence. Criminal liability in respect of specific instances of money laundering will be incurred under the primary legislation. The new rules as of 1 March 2004 under the 2003 Money Laundering Regulations, require accountants, lawyers, casinos and high value goods dealers, to appoint a money laundering reporting officer, train staff to understand the meaning of money laundering and ensure that staff are aware of the duty to make suspicious activity reports (SAR’s). In addition, companies involved in the provision of services in relation to the formation, operation or management of a company or trust will now be included by the regulations. This could involve service companies such as accountants and solicitors particularly those involved in property conveyancing. Proceeds of Crime Act 2002 All of the main offences in connection with money laundering have since been consolidated and expanded under the Proceeds of Crime Act 2002. It also provides for the establishment of a new Assets Recovery Agency. It includes a number of new powers on the confiscation of criminal proceeds and cash forfeiture, the taxation of criminal proceeds and additional powers of investigation. The new orders include production orders, search and seizure warrants, disclosure orders, customer information orders and account monitoring orders. It also provides for a civil recovery scheme. Money laundering is dealt with under the restated offences in Part VII of the Proceeds of Crime Act. This part consolidates, updates and reforms the criminal law. It covers the proceeds of any offence if the conduct occurred in the UK. There is no de minimis level below which the proceeds are not caught. Broadly speaking, there are three categories of offence under the 2002 Act. These are restated as concealing (s237), arrangements (s328) and acquisition, use and possession (s329). In addition the Act covers full failure to disclose offences (ss330-332) and tipping off (s333). There is also a provision for penalties, consent, disclosures and interpretation (ss334-340). Proposals for a Third European Money Laundering Directive The second Money Maundering Directive 2001 included a provision for the European Commission to bring forward proposals for a third directive within three years. In 2003 when FATF revised its 40 recommendations the European Commission held preliminary discussions with the Member States on a third possible directive including elements of the revised FATF 40 recommendations. The European Commission set out a paper ‘to seek initial views from all the Members on a number of issues that may form part of the Commission’s proposals to establish an evidence base of the costs and benefits to the industry and others of further action’. The paper adds that the UK government will set out its views formally to the Commission and other Member States before the Commission publishes its proposals. The UK will ‘strongly encourage the Commission to develop a full cost-benefit analysis of its proposals’. It will also stress the need to maintain a risk-based approach and one that balances having the flexibility to reflect the different systems that exist in different Member States against concerns regarding achieving equivalence across them.[8] The issues in this paper include whether to extend the definition of predicate offences, whether terrorist financing should be included, whether the law of negligence should apply where someone can be found guilty of money laundering for negligent behaviour such as, they ought to have known that a transaction was suspicious. Other issues are whether or not to have information on the numbers involved in providing trust and company services whom are not accountants or lawyers. There is a debate on whether there should be an obligation that all businesses in the regulated sector should be supervised. In the UK, while banks are supervised by the FSA, lawyers and most accountants are supervised by their respective self-regulatory bodies. The revised FATF 40 recommendations include extended requirements for customer due diligence. The question is therefore whether the third directive should include a provision prohibiting the keeping of anonymous accounts, keeping a definitive list of where these measures would be appropriate, alignment for the customer identification thresholds for casinos with those in the FATF recommendations, the cost and benefits of incorporating these measures and how many Member States feel it would be useful to incorporate a third directive. The final issue covers the problems of the unlawful use of legal arrangements, including trusts. The question of whether companies should be required to register beneficial ownership at the point of formation and on an ongoing basis, and whether the benefits of requiring professional service providers to be subjected to some kind of registration or licensing. In the annual report from FATF [9] it made the following comment: ‘The UK has impressed FATF with the changes that have been made over the years to combat money laundering. The FATF concluded that the United Kingdom continues to demonstrate a strong commitment to developing and maintaining an effective and comprehensive system to combat money laundering. Its approach to the problem of laundering, based on close cooperation between the authorities and financial institutions, could serve as a model for other countries.’ FATF also reported in 1997 [10] and stated, ‘the United Kingdom anti-money laundering system is an impressive and comprehensive one, which has been subject to consistent review and improvement, which meets the FATF forty Recommendations and indeed in many areas goes beyond them. Many parts of the United Kingdom system provide a model which could be followed by other countries, with the system of education, training and Guidance Notes for the financial sector seeming to be particularly successful. The active system of supervision, co-operation, education and training in the financial sector are complemented by strong and effective penal legislation. The attitude and measures taken in regard to co-operation and co-ordination, and the willingness to review the existing measures, even if they are relatively recent, could also provide a lead to other countries.’ It can be said that FATF has not only been effective throughout the world but very effective here in the UK. This is evident from all the changes that the UK has made. These changes were necessary not only to combat the problems of money laundering in general but to save the Banking system from harm. Geoffrey Smith writes: ‘The fear of financial regulators is that when credit and financial institutions are used to launder the proceeds from criminal activities…the soundness and stability of the particular institution concerned and confidence in the financial system as a whole could be seriously jeopardised’.[11] Likewise, Ross Cranston asserts that ‘Money Laundering affects public confidence in, and the stability of, the banking system.’ [12] Prior to FATF, the UK did have and still maintains the excellent work of the Basle Committee. This committee can be seen as a mirror of FATF in many ways except its influence had never extended globally. Dr George Walker [13] feels that the UK needed FATF since Basle, although did excellent work, did not have such a global impact. I also agree with Dr Walker that FATF has done and continues to do excellent work to combat money laundering. It is the main international agency in this area and it seems it will remain the main agency. FATF’s recommendations may not have any legal force but they are and have been so persuasive that the European Commission may adopt the revised 40 recommendations in the new directive if the Member States agree to implement it as discussed in the paper. BIBLIOGRAPHY Alldridge P.W, Money Laundering Law, Hart Oxford, 2003 Blair W, Banking and Financial Services Regulation, 3rd edition, 2002 Butterworths International Guide to Money Laundering Law & Practice, 2nd edition, Butterworths, London, 2003 Paget’s Law of Banking, 12th edition Wadsley J & Penn G.A, The Law Relating to Domestic Banking, 2nd edition, Sweet & Maxwell 2000 Cranston, Ross, Principles of Banking Law, 2nd edition, Oxford University Press 2002 Walker. George Alexander, lectures notes and various articles. Dr Walker is Deputy Head and Reader in International Financial Law, International Financial Law, Centre of Commercial Law Studies at Queen Mary and Westfield College University of London, Legal Consultant, Farrer & Co. Solicitors London. Websites: http://www.fatf.org http://www.bis.org http://www.riscglobal.com http://www.lawsoc.org.uk http://www.homeoffice.gov.uk http://www.fsa.gov.uk ----------------------- [1] Definition from Dr George Walker, Lecturer at QMUL for Banking Law [2] See http://www.fatf.org [3] See http://www.fatf.org [4] S.330(8) Proceeds of Crime Act 2002 [5] Money Laundering Regulations 2001, SI 2001/3641 [6] ML 1.2.1G [7] Money Laundering Regulations 2001,SI 2001 No 3641 [8] Money Laundering Advisory Committee Discussion Paper, Third EU Money Laundering Directive. See http://www.hm-treasury.gov.uk [9] FATF III Annual Report (1991-1992), 25 June 1992 [10] FATF VIII Annual Report (1996-1997), 19 June 1997 [11] Geoffrey Smith, ‘Competition in the European Financial Services Industry: the Free Movement of Capital versus the Regulation of Money Laundering’ (1992) 13 University of Pennsylvania Journal of International Business Law 101 at 111 and see Alldridge, Money Laundering Law, (Hart, Oxford, 2003) [12] Ross Cranston, Principles of Banking Law Oxford University Press 1997 [13] Lecturer at Queen Mary, University of London