find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Property lawyer - Melbourne
Category: Property Law | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Impressive client list, national firm · Well-led and high-performing team
View details
Senior family lawyer - Melbourne
Category: Family Law | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Outstanding national firm · High-calibre family law team
View details
Law firms need to be more vigilant to combat money launderers

Law firms need to be more vigilant to combat money launderers

Money launderers

It’s hard to imagine that a small legal practice deep in the suburbs of Sydney could be the vehicle to fund international terrorism. However, the reality is everyday criminals are using law firms and other everyday Aussie businesses to launder their dirty money – funds used for crime and conflict across the world, writes Michelle Weatherhead.

How we push back against the march of dirty money, and how we will fight it in the future, is of vital importance to society and economies across the world.

Laundered money represents between 2 and 5 per cent of global gross domestic product (GDP), according to the UN. That’s the equivalent of the fifth largest economy in the world; in 2009, the UN estimated 3.6 per cent of the world’s GDP was tied up in criminal proceeds.

The figures involved in the fight against money laundering are daunting. From 2007-2013 CEB found the world’s six largest banks saw their compliance costs more than double from $34.7 billion to $70.1 billion.

And while the cost for the banks is significant, law firms and other businesses that deal in large transactions are now in regulators around the world’s sights – due to the risk of becoming accidental facilitators or deliberate co-conspirators. Often acting as a way to get around the substantial monitoring and risk assessments of the big banks, criminals will use these businesses to launder money.

The proposed second tranche of anti-money laundering legislation will potentially move the focus beyond the big banks for the first time to these ‘gatekeepers’. BAE Systems’ Financial Crime Survey 2016 found these entry points are smaller, more numerous and even harder to support and regulate than the banks. Yet they represent poorly-guarded gates through which dirty money and criminal individuals and groups can gain the trappings of legitimacy.

Throwing more people, systems and money at the problem can work in the short-term, but it never creates a long-term fix. What’s more, money launderers don’t explain what they plan to do, so strategic planning can only go so far.

The end result is that highly trained, experienced legal staff are often required to firefight, working with less-than perfect systems. They need time and space to focus on really thorny problems, but all too often are dealing with an avalanche of false positives and a tangle of systems piled on top of each other.

Anti-money laundering professionals are as aware as anyone else of the need to think and plan strategically, as well as reacting to short term events, but are often forced by circumstance to respond. This puts the emphasis on the vendors of these solutions to make simpler, more efficient tools that allow for flexibility, without creating layer upon layer of complexity.

In our recently launched report looking at the anti-money laundering landscape around the world, How Dirty Money Moves, BAE Systems suggests three things that can be done in the short-term to help: tackle the shortage of skilled people, work collaboratively and share data, and finally, get the right technology in place and working in an efficient, optimised environment.

We may never eradicate money laundering, but we can certainly better support the businesses who are unwittingly helping fund crime and make it a riskier, more difficult proposition for criminals.

Michelle Weatherhead is the general manager of Commercial Solutions ANZ, BAE Systems Applied Intelligence.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Law firms need to be more vigilant to combat money launderers
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Aug 23 2017
NT Law Society sounds alarm on mandatory sentencing
The Law Society Northern Territory has issued a warning over mandatory sentencing, saying it hasn’...
Aug 22 2017
Professionals unite in support of marriage equality
The presidents of representative bodies for solicitors, barristers and doctors in NSW have come toge...
Aug 21 2017
Is your firm on the right track for gig economy gains?
Promoted by Crowd & Co. The way we do business, where we work, how we engage with workers, ev...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...