THE VITAL IMPORTANCE OF MONEY LAUNDERING TRADECRAFT IN RAISING THE AWARENESS OF FRONTLINE COMPLIANCE OFFICERS

Compliance officers responsible for transaction monitoring see advanced and esoteric money laundering techniques in operation every day, but most of them are, unfortunately, unrecognized for what they are, and the transfers are allowed to proceed without interdiction or suppression. That is because, for some strange reason, actual money laundering tradecraft is generally not taught in AML/CFT training programs. While the use of AML software to identify suspicious transactions is more or less universal, those platforms often do not catch the unusual or obscure techniques that are next-generation methods, which are far and above what the programs are designed to spot.

The best chance that a bank has to nail the money launderers who are operating within its accounts is a knowledgeable compliance officer who has a well-rounded technical knowledge of money laundering tradecraft, supported by substantial experience on the job, and who can readily identify all the items in the  money launderer's toolbox when he or she sees it. The best compliance officers carry around all those methods in their knowledge base, and apply that information to the transactions they are examining subconsciously. They constantly compare the known techniques, which each have specific characteristics one must watch for, to the transfers that they observe, in real-time, giving further scrutiny to those which could possibly be a specific laundering act. Furthermore, they think like a money launderer does, in terms of practical solutions from the perspective of actual operations, not just bland diagrams and lists of possible methods.

In my humble opinion, the reason that compliance directors fail to give their frontline staff a comprehensive education in tradecraft is their own lack of total and complete familiarity with the subject, but supervisors must themselves have this skillset, in order to teach it to subordinates. Far too many compliance leaders don't have that complete knowledge of obscure techniques, not ever having been exposed to it when they themselves were in the line of fire. Some are duly promoted, due to seniority and time in grade, and reach senior positions without acquiring that expertise.

Compliance directors who have reviewed my ongoing series Money Laundering Tradecraft 101*, and are not already aware of those techniques, should understand that they have gaps in their mandatory knowledge base, and take steps to address it, because if they don't know about these methods, it is certain that their frontline staff is also lacking from a training standpoint.You can't catch the laundrymen in the act if you don't know how they work.

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* Note: All seventeen installments can be found on my blog. (More are in preparation):

Kenneth Rijock's Financial Crime Blog

https://rijock.blogspot.com