3 - Servant of Many Masters

Summary

This chapter revisits the challenges with which the AML regime is fraught and recasts them in a new light. The chapter begins by addressing law enforcement responses to money laundering, namely the prosecution of money launderers and the confiscation of proceeds of crime. It proceeds to discuss regulatory responses, with a focus on the tensions they entail, namely exclusion versus surveillance, exclusion versus the presumption of innocence and surveillance versus privacy. It then explores the challenges presented by the misalignment between law enforcement priorities and private-sector compliance efforts, including defensive reporting, derisking, the displacement effect and tick-box compliance. The chapter then outlines potential solutions, including a modified reporting regime, public–private partnerships, privacy- enhancing technologies, and the implementation of a risk-based approach. The last substantive topic in this chapter is the special case of the legal profession, which presents particularly difficult choices in connection with both exclusion and surveillance. Finally, the conclusion brings together this analysis to elucidate the limitations of the existing FATF-mandated framework.