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UK WARNED AS GLOBAL MONEY LAUNDERERS TURN FROM DOLLAR TO RENMINBI

Consequences for UK authorities, as London becomes international clearing and settlement centre for RMB

The money laundering crackdown on banks globally being led by US authorities will see financial crime networks increasingly migrate from the Dollar to the Renminbi, according to anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) specialist, Anomaly42.

The increased scrutiny being placed on international Dollar-based wire payments— by the US Treasury FinCEN (Financial Crimes Enforcement Network), Justice Department, Manhattan District Attorney and New York State Department of Financial Services (NYSDFS) — has made the Greenback far less attractive in the eyes of global money launderers.

With banks globally hiring armies of AML specialists to combat the threat of record-breaking fines* being levied against them, and the focus firmly on Dollar-based wire payment transactions, there are early signs that global money launderers are heading to the safer ground of the Renminbi where there is currently less banking and regulatory scrutiny.

With London set to become a major clearing house for the Renminbi (via the China Construction Bank), and global money laundering estimated at between US$1.44 trillion and US$3.59 trillion annually, there are clearly ramifications for the UK authorities.

At the moment, the AML/CFT evangelists in the public eye are based in New York: Eric H. Holder, Jr., the Attorney General of the United States, and Benjamin M. Lawsky, the first Superintendent of the New York State Department of Financial Services (NYSDFS). Who will be their visible equivalent in London?

Freddie McMahon, Director, Strategy & Innovation, Anomaly42, commented:

“Today’s money launderers are highly sophisticated and monitor every move the banks and regulators make. With international US$ wire payments under the microscope, we have seen early evidence that financial crime networks are switching to the Renminbi. The Dollar is becoming increasingly high risk and it’s a level of risk money launderers are proving less willing to take. Relative to the Dollar, the Renminbi is off the beaten track and affords a new level of camouflage for criminal transactions. With London set to become a clearing centre for the Renminbi, exactly how prepared is the UK for this level of responsibility?

“The irony is that proactively countering the money launderers represents an unprecedented opportunity for the Chinese authorities to make the Renminbi the default global currency. There is already an acceleration in the switching of funds away from the Dollar and if China can take the initiative and set a new golden standard from an AML/CFT perspective, the global financial landscape could be set for seismic change.”

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