Society outsources all money laundering compliance to banks. It’s an impossible task to stop it such that you can’t find examples where banks messed up. If 100% of flows go through banks and banks stop 99.99% of money laundering, that 0.01% is still billions.
It’s not a matter of incompetence or lack of effort. As an analogy, in a big city with the best police force, you still have thousands of robberies and assaults and a few hundred murders. Not for lack of resources or trying.
The only way to eliminate money laundering completely is slow down the system so much that it’s literally unusable.
You might be surprised, but many places have similar murder rates to Iceland. For example, Vancouver, Canada had 9 murders in 2019 [1], not far off of the ~2/year that Iceland has [2].
I am surprised about Canada. I always thought being nice and saying sorry were just Canadian stereotypes, but maybe it's because of a culture that doesn't promote violence?
I do not know what that has to do with the comment you replied to. The second part is false. As the only Vancouverite on duty here on HN at this hour, I suppose it is my duty to correct you.
When people say Vancouver, they are often referring to the metro region. 49.3% are of European ethnic origin[0], with the remainder a broad mix. There certainly is a large Chinese population. We have the second-largest Chinatown in N. America, after SF. We have a lot of Cantonese speakers here.
There was a Chinese-focused ride hailing service that flew under the radar back when Uber/Lyft weren't permitted. It feels like a separate world sometimes. I'd like to learn Cantonese and/or Mandarin, just so I could peek into it.
Offshore style banks like HSBC are more susceptible to this kind of stuff because they have less of a wider stake in the situation.
Also, with 'cross jurisdictional' stuff, then it gets easier to hider.
Another way of helping would be saying 'your business transactions in the US has to be transacted by a financial entity hosted in a regime with strong regulations and transparency with the US' kind of thing. As an example.
Also, consider that merely hosting the accounts for a company committing fraud is not fraud itself in much the same way that hosting a website or doing their cleaning, or leasing them a building isn't either.
I think stuff like the OP make this unclear to the layman. The reports that have been leaked are documents that banks are passing to law enforcement. They are evidence of banks attempting to stop crimes, not facilitating them.
The issue is that banks often have no idea themselves because they aren't actually law enforcement. I saw one SAR that actually referenced a random blogpost. And, as you say, it is a slippery slope. The only way to ensure that this never happens ever is to essentially bring the system to a standstill, and ask both law enforcement and regulators to approve every transaction (and even then, they probably won't get it right from the POV of the public all the time).
The example that I read was of a Ponzi scheme where HSBC moved money through accounts, they filed SARs...and yes, if you are a journalist it is easy to go back in time and say: "Oh, look...this ponzi scheme was so obvious, they must have known". Well no, they didn't know, they filed SARs, and waited until someone had actually been found guilty of a crime before acting as judge and jury themselves (which btw, was likely an investigation in which HSBC assisted).
The only foolproof way to launder money these days is to completely conceal your identity (not something a bank can do anything about) or corrupt someone at a financial institution (almost never happens, most large financial institutions have teams of people that track the movements and communications of people working in AML, both personal and business). The effectiveness of this system, given the amount of transactions, is astonishing.
Not necessarily yours but yes, there's a weird lot of "AML sucks so hard so don't bother". Without suggesting what better way to approach the problem of fighting criminality[0]
If you want a precise criticism of your post, I gave it, in maths. Your figures don't seem credible and you gave no backup of them.
[0] Which eg, HSBC seems happy to indulge in while others supposedly on the side of law & order let it.
My numbers were made up - they are illustrative. To rephrase that without numbers: "because banks are responsible for all AML, because all financial transactions go through banks, and even if you are very diligent in reviewing transactions, you will still miss a lot." Is that better?
My post didn't say AML sucks so hard so don't bother. It says AML=good, but AML=imperfect so there will be misses.
And as another person in the thread pointed out, the article is based on Suspicious Activity Reports submitted by banksto regulators
Don't make up numbers. Invented stuff is not illustrative, it makes you look ill-informed.
> "...you will still miss a lot"
What is 'a lot'? 2%? 20%? 85%?
> My post didn't say AML sucks so hard so don't bother
I quote: "The only way to eliminate money laundering completely is slow down the system so much that it’s literally unusable."
which is not the same as "...but AML=imperfect so there will be misses"
What little AML I've seen is about automated checking. Conmputers do it not people except when something is flagged. You don't need to "eliminate money laundering completely", they can't and they don't try, it's a best-effort, due dilligence thing.
It’s not a matter of incompetence or lack of effort. As an analogy, in a big city with the best police force, you still have thousands of robberies and assaults and a few hundred murders. Not for lack of resources or trying.
The only way to eliminate money laundering completely is slow down the system so much that it’s literally unusable.