International Money Laundering – Total Failure is “Only a Decimal Point Away”

Worldwide anti-money laundering efforts are currently just a decimal point away from total failure, according to this August 2017 report published by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition).

 

Authored by former Treasury Special Agent John Cassara, an internationally renown expert on financial crime, the study details the near failure of current efforts to combat money laundering and the rationale for comprehensive reform.  After detailing the impact of this negligence on the American people — where money laundering fuels everything from terror finance and sanctions evasion to human trafficking and corruption — the report proscribes a number of measures to rectify the situation.

These specific recommendations form the basis of a new approach to addressing money laundering and the dangerous threats to our safety and security from the crimes funded through illicit finance.

 

How Much Money Is Being Laundered?

Estimates are difficult without better data, but the International Monetary Fund (IMF) and United Nations Office on Drugs and Crime (UNODC) estimate the scale of global money laundering falls somewhere around two to five percent of global gross domestic product — approximately $1.5 trillion to $3.7 trillion in 2015.  The IRS observes: “money laundering is tax evasion in progress.”  If tax evasion here and abroad is included in the count, the magnitude of international money laundering is staggering.

 

“Total Failure Is Just a Decimal Point Away”

How well are we doing in fighting the problem?  The data we do have presents a bleak picture.  Here are a few sobering numbers:

• According to the UNODC, less than one percent of global illicit financial flows are seized and forfeited.
• Raymond Baker, a longtime financial crime expert, notes that the numbers show enforcement fails 99.9 percent of the time. “In other words, total failure is just a decimal point away.”
• Dated information suggests money launderers face a less than five percent risk of conviction in the United States. The situation in most areas of the world is even worse.

 

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