Publications

Early fall-out from the Third Directive

Rob McCusker

Published in:
Money laundering intelligence 2, December 2005/January 2006.

Abstract

In this article, the initial response to Europe's Third Money Laundering Directive is examined. The primary purpose of the Directive is to ensure that European legislation complies with the revised Financial Action Task Force 40 recommendations, especially in the area of money laundering and terrorist financing. It reveals the tendency of institutions to follow a risk-based rather than an ethical approach to the problem. Rather than recognising the benefits of the Directive, the regulated sector only meet its terms because failure to do so may lead to costly legal consequences. The paper explores the specific articles of the Directive, and where applicable relates these to the United Kingdom experience. The author concludes that as long as adherence to the law is deemed by the regulated sector as a means to an end (avoiding legal action), rather than an end in itself (the mitigating of money laundering and terrorist financing), these issues will remain problems to members of that sector, and ultimately the societies in which they operate.