Money Laundering and Anti-Terrorism Regulation: Consistently Achieving Nothing

In the last twenty years there has been a huge increase within the financial services industry of ‘anti-money laundering’ and ‘anti-terrorism’ legislation, the trend started almost 20 years ago – the initial Irish take on the theme started with the Criminal Justice Act 1994. In the USA the rules go back further but the primary modern foundation is the Money Laundering Control Act 1986.

This week the new Criminal Justice (Money Laundering & Terrorist Financing) Bill 2010 passed in the Dail, and likely it will be signed off within days by the President and thus become Law. Then everybody in industry has three months with which to train up and become compliant. Yet another hidden and embedded cost in the financial system that will be offloaded onto customers via reduced service/turn around times as well as higher costs.

The fundamental question however, is this: Has all of this legislation and additional regulation achieved what it hoped to achieve? And to that the answer is no.

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