Interrupting the Wash Cycle

By Laura Spadanuta

At the summit, world leaders placed pressure on Switzerland and other tax havens. Switzerland is known for being secretive about its bank account holders and has been refusing to subscribe to an automatic exchange of information that the United States and other nations have been demanding.

It’s not just about money laundering. Tax evasion has been a driving force as well. In one high-profile case, a former UBS AG banker admitted to helping wealthy individuals cheat on U.S. taxes through Swiss bank accounts, and he assisted the U.S. government in cracking down on other such bankers. The recent attention on tax havens like Switzerland has “created a tsunami, because the smaller tax haven countries and the rest of Western Europe are now knuckling under…. It’s showing that the United States is not just going to sit around anymore and watch people hide all their cash,” says Rijock.

Assessing the true level of progress globally or domestically, however, is difficult. The FATF does not provide an estimate of how much money is laundered annually, due to the inability to know how much goes undetected. And it points out that even though more laundering may be detected each year, it may be just that banks and law enforcement and others are getting better at catching it.

The only certainty is that money launderers will persist in seeking ways to beat the system. As Rijock says, “In the world of money laundering, you’re only limited by your imagination.”



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