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Making AML crystal clear

Liesel Lindsay, GTA University Centre Programmes Manager, has recently started watching Breaking Bad and it struck a chord.

I have somewhat belatedly started watching the critically acclaimed TV series ‘Breaking Bad’. Walter White, a terminally ill, terminally frustrated middle aged high school chemistry teacher cooks up a batch of crystal meth, the likes of which have never been seen in the northern hemisphere!  The local junkies are blown away and needless to say, business booms and cash starts flowing in. You’ve got to love this guy; he’s dying of cancer, he has a disabled son, a pregnant wife, a classroom full of disengaged teenagers and a humiliating second job at a car wash. But Walter is through it all the mild mannered, middle class, devoted family man, champion of the downtrodden, and a thoroughly likeable member of the human race.  Walter decides to undergo intensive medical treatment in a bid to extend his life.  When his insurance won’t cover the expense, Walter retrieves his hitherto untouched ill-gotten gains and pitches up at the bank with $5,000 cash, where he is issued with a cashier’s cheque.  Walter is a nice, normal, caring, family man, and Walter is also a money launderer.

This scene had an unexpected impact on me.  I wanted Walter to be the good guy, even whilst he was cooking meth and disposing of bodies.  However, when Walter handed the cashier the roll of $100 bills I realised with stark clarity that this was a classic money laundering scenario.  I don’t intend here to provide you with an anti-money laundering update.  The question of Walter’s guilt is a moot point for the sake of this article.  I understood what was happening here; the scene threw up questions about the tests of suspicion, internal procedure, and interestingly about training.  I have done my share of Compliance training including the ICA International Diploma in Compliance. However I think that scene in the bank where Walter handed over funds obtained through illicit activity in an attempt to conceal their origin, brought the message home to me in a way that no training had to this point.

My exposure to AML training has been a combination of face-to-face sessions and online tick-box exercises.  I think both methods have their place, but I began to wonder if online training could ever adequately convey the ethical issues and thus the moral imperative of anti-money laundering training.  The IMF says;

“Money laundering and the financing of terrorism are financial crimes with economic effects. They can threaten the stability of a country’s financial sector or its external stability more generally. Effective anti-money laundering and combating the financing of terrorism regimes are essential to protect the integrity of markets and of the global financial framework as they help mitigate the factors that facilitate financial abuse. Action to prevent and combat money laundering and the financing of terrorism thus responds not only to a moral imperative, but also to an economic need.” – Min Zhu, Deputy Managing Director of the IMF.  

How effectively is this moral imperative communicated?   I think the majority of us will understand regulatory and reputational risk and the potential impact to the bottom line, but how many of us are motivated to embrace compliance with anti-money laundering procedures by a desire to help the victims of the human slave trade?

Putting the moral question to one side, does AML training which is devoid of the human element work as well?  When we understand and can relate to the victims of the criminal activity that has generated illicit funds, when we can accept that even the nicest of clients is capable of being a money launderer, does AML training work better?   This leads me to ask, can online AML training ever provide the kind of impassioned stimulus necessary to make us embrace the legal requirement?

On balance, I think, in order to be effective, AML training needs to be delivered face to face by an inspired course leader who will stimulate group discussion about the issues involved to allow people to invest emotionally in what can be a drop dead boring, dictatorial edict from Compliance.  The face to face AML and Compliance courses available through the GTA offer plenty of opportunities for such engagement.  We offer a number of courses from AML CPD sessions through to the ICA International Diploma in Compliance, which is run in conjunction with the University of Manchester Business School.

AML training is often rolled out with the irreproachable message; ‘It’s the law. If we break the law we could be fined, we could lose our licence, we could even go to jail.’ Actually it’s also a social responsibility we owe to the victims, to our organisation and its stakeholders, and to our colleagues.  That said, I’m still rooting for Walter and looking forward to the other lessons he can teach me!

Visit www.gta.gg for details of our full AML / Compliance /  CPD programme which will help meet all your regulatory requirements.

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24th February, 2014

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