Altering bank secrecy rules alone will not solve the problem of international money laundering, writes Pacific Council member Greyson Bryan on his website. The enormous loophole in the international legal system needs to be closed.
On his blog about the “ins and outs of corporate espionage and business intelligence,” Bryan writes about the crossroads of human, drug, and arms trafficking and how the jurisdiction where money is laundered is often overlooked.
“When [the three crimes] are analyzed together, solutions are sought in coordinated action by source, transit, and destination countries,” Bryan writes, adding that looking at the laundered proceeds of transnational criminal activity is critical because “money can be used as evidence against the perpetrators and can itself be the target of investigation and seizure.”
"Panama is just the tip of the iceberg, and the Panama Papers simply exposed a truth to the public that some have known for decades."
According to the UN Office on Drugs and Crime, more than $600 billion from transnational organized crime may have been laundered through the global financial system using multiple bank secrecy jurisdictions such as Panama. Bryan argues that the situation has gotten out of control.
“What started as a business to help a wealthy few protect their privacy and perhaps legally minimize their taxes has grown to be an enormous loophole in the international legal system designed to protect against the plagues of human, arms, and drug trafficking,” he explains. Panama is just the tip of the iceberg, says Bryan, and the Panama Papers simply exposed a truth to the public that some have known for decades.
In a follow up post, Bryan writes about ways that legitimate international businesses try to avoid becoming tools of the money-laundering trade, including confirming people’s identities by scanning the consolidated screening list of the departments of State, Treasury, and Commerce and the specially designated nationals list of the Office of Foreign Assets Control.
Further investigation should include looking for “typical ‘red flags’ such as the involvement of ‘politically exposed persons’ (an individual who is or has been entrusted with a prominent public function), tax haven or secrecy jurisdiction entities, private banks, persons in jurisdictions with high levels of corruption or trafficking of drugs, humans, or arms, offshore bank accounts, transactions with no business purpose or a structure inconsistent with their business purpose, improper accounting or documentation, etc.”
Bryan is the author of the new book BIG: Beginnings, the first novel in an international business espionage thriller series based on his work as an international lawyer. Read more about the book and how he came to write it here.
Greyson Bryan is a Pacific Council member and international lawyer who earned his B.A. from Stanford and a J.D. from Harvard, and taught at the Harvard Law School and UCLA. A longtime resident of Los Angeles, BIG: Beginnings is his first novel and the first book in the BIG series.