{"id":3521,"date":"2019-10-04T12:16:48","date_gmt":"2019-10-04T12:16:48","guid":{"rendered":"https:\/\/diskdrive33.com\/mks\/?p=3521"},"modified":"2019-10-04T12:16:48","modified_gmt":"2019-10-04T12:16:48","slug":"aba-resisting-law-to-prevent-money-laundering","status":"publish","type":"post","link":"https:\/\/diskdrive33.com\/mks\/2019\/10\/04\/aba-resisting-law-to-prevent-money-laundering\/","title":{"rendered":"ABA resisting law to prevent money laundering?"},"content":{"rendered":"<blockquote>\n<p class=\"Body\"><strong>The American Bar Association is apparently <span class=\"Hyperlink0\">putting up a fight<\/span> <a href=\"https:\/\/qz.com\/1646365\/the-american-bar-association-is-fighting-congresss-efforts-to-tackle-money-laundering\/amp\/\" target=\"_blank\" rel=\"noopener noreferrer\">against<\/a> proposed legislation that would help to <span class=\"Hyperlink0\">prevent money laundering and a host of other <a href=\"https:\/\/www.nytimes.com\/2019\/07\/11\/business\/dealbook\/llc-shell-companies-money-laundering.html\" target=\"_blank\" rel=\"noopener noreferrer\">crimes<\/a><\/span> in the USA. At first glance, the story appears to defy logic: why would lawyers be against such meaningful and well-intentioned legislation?<\/strong><\/p>\n<\/blockquote>\n<p class=\"Body\">The nub of the legislation under consideration is the old subject of companies disclosing their Ultimate Beneficial Owners (UBOs). As somebody who is a member of the legal profession, and who has himself <span class=\"Hyperlink0\">entered the UBO <a href=\"https:\/\/diskdrive33.com\/mks\/2019\/01\/11\/hear-me-out-please-public-ubo-registers-wont-work-in-2019\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>debate<\/strong><\/a> and political fray<\/span> on this very subject, I follow this debate with some interest.<\/p>\n<p class=\"Body\">Writing for digital outfit <em>Quartz<\/em>, Max de Haldevang says:<\/p>\n<blockquote>\n<p class=\"Default\">The legislation [in front of Congress now] would force the owners of U.S. companies to disclose their identities to the authorities. The move would make it much harder for criminals to hide their money in shell companies with anodyne names; something anti-corruption experts and law enforcement say is a crucial step in fighting financial crime and ending America\u2019s status as the world\u2019s <span class=\"Hyperlink1\"><a href=\"https:\/\/qz.com\/1593317\/welcome-to-the-worlds-biggest-tax-haven-the-usa\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>biggest<\/strong><\/a> tax haven<\/span>. It\u2019s also relatively timid compared to what\u2019s happening on the other side of the Atlantic, where the UK has set up a fully <span class=\"Hyperlink1\"><a href=\"https:\/\/beta.companieshouse.gov.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>public registry<\/strong><\/a><\/span>\u00a0of company owners, and the rest of the EU is following suit.<\/p>\n<\/blockquote>\n<p class=\"Body\">The fact that he appears to readily accept that the proposed legislation would &#8220;<span class=\"None\">make it much harder&#8221;<\/span>\u00a0for criminals to hide their illicit assets in shell companies indicates that we may be viewing the scenario from different perspectives. Add to this that the UK\u2019s much vaunted Companies House public register is also mentioned in the context of it being radical in comparison to the situation in the U.S., we are clearly singing from different hymn sheets.<\/p>\n<p class=\"Body\">The UK\u2019s Companies House register may be public, but it is also seriously flawed. The information it holds is not verified, which means that in the context of crime prevention, it is effectively useless. The crooks have fed all manner of lies into the system unabated. Indeed, recently <span class=\"None\"><em>The Guardian<\/em><\/span> newspaper ran an <span class=\"Hyperlink0\"><span lang=\"FR\">excellent <a href=\"https:\/\/www.theguardian.com\/world\/2019\/jul\/05\/how-britain-can-help-you-get-away-with-stealing-millions-a-five-step-guide\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>article<\/strong><\/a><\/span><\/span> by Oliver Bullough, in which he outlined the porous nature of the UK public register.<\/p>\n<p>Bullough said of the offshore service providers such as the British Virgin Islands (BVI): \u201cThey are no longer as useful as they used to be. So where is? This is where the UK comes in. When it comes to financial crime, Britain is your best friend.\u201d<\/p>\n<blockquote><p><strong>The UK\u2019s Companies House register may be public, but it is also seriously flawed.<\/strong><\/p><\/blockquote>\n<p>The point being, that the pressure that has been brought to bear on the offshore service providers such as the BVI and Cayman Islands, has seen them &#8220;up&#8221; their compliance game to a level other jurisdictions, including the UK and U.S., can only dream about.<\/p>\n<p>This brings us back to the issue of the ABA and its resistance to change: it is where we part ways. You see, unlike the ABA I am all for a regulatory regime that <span class=\"None\"><em>does<\/em><\/span> collect and verify UBO information. My position is that this information should be held securely and privately, available only to the competent authorities. My reading of the ABA position is that it mirrors the historical attitude of the UK\u2019s Overseas Territories and Crown Dependencies as offshore service providers (but not anymore).<\/p>\n<p>The ABA\u2019s reluctance to engage with the notion of enhanced regulatory protocols is therefore completely at odds with my own. Its claim that disclosing the details of UBOs will impinge on clients\u2019 privacy is valid. However, what those in the ABA should be saying is that they will step up to the plate and collect, verify and store the information, keeping it secure and private on behalf of their client, until it is requested by a competent authority.<\/p>\n<figure id=\"attachment_3530\" aria-describedby=\"caption-attachment-3530\" style=\"width: 300px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-3530 size-medium\" src=\"https:\/\/diskdrive33.com\/mks\/wp-content\/uploads\/2019\/10\/American_Bar_Association.svg_-300x233.png\" alt=\"\" width=\"300\" height=\"233\" srcset=\"https:\/\/diskdrive33.com\/mks\/wp-content\/uploads\/2019\/10\/American_Bar_Association.svg_-300x233.png 300w, https:\/\/diskdrive33.com\/mks\/wp-content\/uploads\/2019\/10\/American_Bar_Association.svg_-768x598.png 768w, https:\/\/diskdrive33.com\/mks\/wp-content\/uploads\/2019\/10\/American_Bar_Association.svg_-1024x797.png 1024w, https:\/\/diskdrive33.com\/mks\/wp-content\/uploads\/2019\/10\/American_Bar_Association.svg_.png 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-3530\" class=\"wp-caption-text\">Blocking progress?<\/figcaption><\/figure>\n<p>The Overseas Territories\u00a0and Crown Dependencies\u00a0have learned that blanket denials and meaningless objections to increased regulation is not the answer. They, like all of us, must move with the times. Likewise, the ABA and its members must do the same. I have little doubt that ultimately the legislators will prevail, perhaps not under this administration, but eventually the lawyers will need to comply. But instead of simply sticking their heads in the sand, they must come out fighting, armed with a <span class=\"None\"><em>meaningful alternative<\/em><\/span>.<\/p>\n<p>Verified UBO information held securely may not be the result that certain politicians and pressure groups are chasing, but it is a sensible option. Come what may, the ABA and its lawyers are slowly but surely being pressed back against the wall. The only way to resolve the situation is for all concerned to utilize common sense.<\/p>\n<p>Make no mistake about it, the ABA deserves all the flak coming its way. Simply rejecting the notion of increased regulation plays into the hands of those with a political axe to grind. Those who advocate transparency will be able to utilize this position to their own ends.<\/p>\n<blockquote><p><strong>The ABA and its members need to accept that meaningful regulation is here to stay<\/strong><\/p><\/blockquote>\n<p>Conversely, the fact that the <span class=\"Hyperlink0\">FBI has recently <a href=\"http:\/\/www.mondaq.com\/caymanislands\/x\/822190\/Financial+Services\/Cayman+Finance+Pleased+To+Have+FBI+Acknowledge+Caymans+Immense+Value+In+Combatting+Financial+Crime\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>commended<\/strong><\/a><\/span> the Cayman Islands and its ability to provide law enforcement with verified UBO information, vindicates those of us who have said all along that \u201cfully\u201d public registers are not the answer here. When the FBI waxes lyrical about a jurisdiction which has been for many a year a target of politicians and NGOs alike, then we all should take note.<\/p>\n<p>The ABA and its members need to accept that meaningful regulation is here to stay, and instead of dodging and weaving, they should embrace the change, but resist the concept of open public registers.<\/p>\n<p class=\"Default\"><em>With thanks to Tony McClements, Senior Investigator at Martin Kenney &amp; Co, for his assistance with this post. He served for 33 years with UK police forces and has specialized in Fraud &amp; Financial Investigation since 1998. He is also a lecturer in these subjects at the University of Central Lancashire (UCLAN).<\/em><\/p>\n<p class=\"Default\"><em>_____<\/em><\/p>\n<p><i>Martin Kenney\u00a0is Managing Partner of Martin Kenney &amp; Co., Solicitors, a specialist investigative and asset recovery practice based in the BVI, focused on multi-jurisdictional fraud and grand corruption cases\u00a0<\/i><a href=\"https:\/\/diskdrive33.com\/mks\/\"><b><i>www.martinkenney.com<\/i><\/b><\/a><i>\u00a0|\u00a0<\/i><a href=\"http:\/\/www.twitter.com\/MKSolicitors\"><b><i>@MKSolicitors<\/i><\/b><\/a><i>.\u00a0In 2014 he was the recipient of the ACFE\u2019s highest honour: the Cressey Award for life-time achievement in the detection and deterrence of fraud. He was selected as one of the top Thought Leaders of the legal profession in 2018 and 2019 by Who&#8217;s Who Legal International and as the number one offshore lawyer for asset recovery in 2017, 2018 and 2019.<\/i><\/p>\n<blockquote><p><span style=\"color: #ff6600;\"><strong><a style=\"color: #ff6600;\" href=\"https:\/\/www.fcpablog.com\/blog\/2019\/8\/19\/aba-resisting-law-to-prevent-money-laundering.html\">This article was originally published on the FCPA Blog<\/a><\/strong><\/span><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The American Bar Association needs to accept that meaningful regulation is here to stay and stop trying to hinder the passage of a Bill that would help tackle money laundering.<\/p>\n","protected":false},"author":2,"featured_media":3538,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[81],"tags":[199,33,196],"class_list":["post-3521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-american-bar-association","tag-money-laundering","tag-usa"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>ABA resisting law to prevent money laundering? 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