Earlier this year, G8 has urged industrialized countries to develop a kind of anti-money laundering legislation following pressures from civil society from all around the world. It seems that the European Union feels it could and should lead the international debate on such a law. The European Union believes that EU member states and the European Parliament can push for an international standard of anti-money laundering legislation. The cross-border dimension of the legislation is especially on demand, as most money laundering cases do transcend borders.
The first step has been already taken and there is a proposal that all firms should hold the details of their beneficial ownership. A potential caveat consists in the fact that a firm would have to be asked specifically for this information during law enforcement. Beneficial ownership is especially important as most money launderers, tax evaders and corrupt stakeholders hide behind the veil of anonymous companies.
A 2011 research done by the Financial Conduct Authority (FCA) of the United Kingdom showed that all these people who are trying to commit frauds, embezzle or evade taxes, need experts who will help them to hide the fraud effectively. Moreover, these professionals, lawyers, consultants or tax experts help eliminate the possibility of tracking down the origin and identity of the money. Yet, under current legal structure most of such ‘transactions’ are possible. Further complicating things, no current legislation enables to handle inadequate transactions or tainted money. More specifically, according to the report of FCA, about 75% out of 27 surveyed banks had insufficient procedures in place to deal with suspicious transactions.
