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“There’s zero evidence that crime is reduced as a result of all this AML”; says Charles Littrell

“There’s zero evidence that crime is reduced as a result of all this AML”; says Charles Littrell.

Charles Littrell, a senior advisor at the Central Bank of Bahamas and a former executive general manager at the Australian Prudential Regulation Authority, brings a unique perspective to the topic of the current global anti-money-laundering (AML) regime.

He thinks that it has become increasingly evident over the past five years that the global AML regime is deeply unsatisfactory. Among other things:

  • It probably captures less than 1 per cent of the world’s illicit funds flows and assets.
  • It imposes massive costs on the world’s financial providers and consumers. 
  • There is no evidence that the regime, despite its costs, has produced any appreciable reduction in the crimes that the regime was built to combat.

“Australian and other governments have fallen into the lazy habit of uncompensated conscription of private sector industries (such as real estate agents or lawyers) to act as AML enforcers,” says Charles Littrell.

Regulators, like Australian Securities & Investment Commission and AUSTRAC have effectively outsourced their legislative compliance duties, responsibilities and investigative powers to the banks without judicial oversight.  He thinks the current anti-money-laundering (AML) regime, which centre on banks reporting millions of transactions each day at an annual compliance cost of perhaps $US300 billion ($432 billion), “is a joke”.

Littrell is scathing in his criticism of Australia’s AML enforcer, AUSTRAC. He says that if the media reports are accurate, it was missing in action throughout the Crown Casino and Star money laundering debacle, which included bags of cash passing around and the use of credit card expenses to wash illicit gambling funds from China.

Also, he says that the AUSTRAC action against Westpac in 2020 for millions of breaches of AML laws was “the most chickenshit global AML enforcement I have seen anywhere” (See: https://zucoins.com/westpac-banking-corporation-wbc/).

The breaches by Commonwealth Bank two years earlier only reinforced the view that the AML regime was designed to only financially penalise shareholders without sending any deterrent messages to bank executives and officers (See: https://zucoins.com/commonwealth-bank-of-australia-cba/).

“It’s just an astounding policy failure,” he says in his first interview since returning to Australia. After a five-year stint as Inspector of Banks and Trusts for the Central Bank of the Bahamas.

“The AML system we have is a child of the American war on drugs, which has been an utter failure except in one respect – it’s been a huge success as a war on black families. It exceptionally kicked the shit out of them.

His analysis shows that the Financial Action Task Force (FATF), which was established by the seven richest countries in 1989 to rein in AML, has assessment processes that display bias in favour of the United States, Australia, Canada and New Zealand.

Drowning in hypocrisy

“America and the UK are the world’s two biggest arbiters of which countries are good or bad, but they are also the two biggest collective recipients and probably originators of dirty money,” he says.

“And until they fix that basic problem, the whole system is just going to drown in its own hypocrisy.”

This analysis fits with the findings of the Tax Justice Network’s annual publication of the 10 countries most complicit in helping individuals to hide their wealth from the rule of law. The list is headed by the US.

To gain a more profound understanding of how the US facilitates money laundering, read the piece in The Guardian in November 2019 by British journalist Oliver Bullough on why the US state of South Dakota is the preferred tax haven for the super-rich.

The FATF policy paradigm rests on two foundations: a know your customer requirement that forces people to fill in proof of identity forms; and the monitoring of billions of transactions run through financial institutions.

“One problem with the international AML framework is billions of honest people are inconvenienced or shut out of the system who are honest,” says Littrell.

The best estimates say that over 99 per cent of the world’s cross-border, illicit funds is all happily proceeding along.

“So, we’re in a system where if you have a child who wants to go to Oxford University, that child will have more trouble opening a £5000 bank account with a British bank than a Russian kleptocrat would have putting £5 billion in the same British bank. What’s wrong with that picture?”

Littrell, who has been retained as consultant to the Bahamas Central Bank to run its annual AML conference for the next two years, was shocked at the outcome of the inquiries into large-scale money laundering through casinos at Crown Resorts and The Star.

“But in Australian gaming, a casino licence means I only have to say, I’m sorry. I don’t actually have to do anything, or lose anything. And the state regulators will say to a casino owner: ‘Oh, you’ve been bad, you can have a licence, but please sell your business for $5 billion to the next guy’.”

He reckons there is a lot of merit in the findings of a controversial paper published in 2020 by Ronald Pol, who is a senior researcher at La Trobe University.

Review the Ineffective Policies by Ronald Pol here.

Pol argued that AML policy intervention has less than 0.1 per cent impact on criminal finances, compliance costs exceed recovered criminal funds more than 100 times over, and banks, taxpayers and ordinary citizens are penalised more than criminal enterprises.

Littrell says that although many disagree with some of the calculations and analysis in Pol’s paper, there is a strong consensus that there is a yawning gap between criminal funds generated annually and the AML success rate.

Lack of questioning of the regulatory paradigm is a function of the incentives in the AML ecosystem for hundreds of thousands of businesses and professionals, according to Pol’s paper.

“Banks must also avoid or mitigate regulatory sanction, which means implementing AML programs and complying with laws dictated by standards framed in the global policy prescription,” Pol’s paper says.

“In a compliance-oriented intervention model, if such laws achieve their policy objective, or not, is immaterial. Banks and other firms must comply, or risk ruinous reputational damage and financial penalties.”

Littrell says reform of AML regulation requires four basic things: 

  • A switch in focus from monitoring transactions to finding out where the money is landing. 
  • Removing the use of currency notes for illicit purposes.
  • Forcing the disclosure of beneficial interests behind trust corporations, foundations and shell companies.
  •  Making a clear distinction between financial crime and terrorism financing.

 

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Phil, a marketing specialist, joins the Zucoins team with over 15 years experience in the marketing industry.

Recently he worked for a marketing agency where he started out as the lead web developer, with involvement in client sales and the onboarding process. He established and maintained the Google advertising branch of the company. Phil transitioned into the head of the digital role overseeing all digital projects including web design, EDMs, Google Ads, Social Media Ads and hosting services. 

At Zucoins, Phil is helping the team across all areas in building the Zucoins and SplitChain brands in an ever-evolving industry. From marketing and brand strategies to web development, content creation, advertisements and Lottie animations, Phil is continually expanding his knowledge and skills. 

Outside work, Phil loves his motorsport, racing go karts and volunteering as a Flag marshal for Formula 1 and Super Cars.

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Pete started with the Zucoins team in 2019 and now leads as our Head of Support. 

As the Head of Support, Pete is the first point of contact, providing the highest level of service to all Zucoins buyers and enquiries. His role is responsible for managing online email queries, coin purchases, wallet and coin distribution and, most importantly, guiding users and customers in using the Zucoins app to ensure they are comfortable accessing its features and capabilities. 

Pete also works closely with the development team, continuously improving his technical and product development to assist staff and users with the most up-to-date training and education. 

Before joining the team, Pete worked in a multitude of different roles, including several director positions, regional sales manager, corporate purchasing manager and a new homes advisor/area manager. 

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Riley is Chief Financial Officer and brings vast experience across many fields, including customer service, account management and accounting with Cycling Australia and Energy Australia.

His solid skill set across these fields ensures his capabilities to further the growth of Zucoins and its partners in the future. In addition, Riley is passionate about engaging with people and building long-term and profitable professional relationships. As a believer in a busy yet productive lifestyle, he feels that you aren’t working if you love what you do.

In his role, he strategises, designs, and implements daily financial processes to increase productivity, achieve organisational objectives, and foster strong stakeholder management.

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Georgia leads the marketing and brand strategy at Zucoins after switching roles from start-up AR marketing platform, Zukaz.

As the Marketing Manager, Georgia is responsible for developing and accelerating Zucoins’ global marketing strategy and brand awareness. She is focused on driving the company’s vision of creating an ecosystem where anyone, anywhere, can send or receive value in real-time with no third-party involvement.

Georgia has substantial experience across marketing and product development, event management, branding & design, lead generation, public relations, strategic planning and digital marketing. In addition, she continues to expand her leadership competency while effectively leading and managing a growing team.

Before joining Zucoins, Georgia worked in the marketing and communications field, specialising in the hospitality/gaming industry after completing her Bachelor of Business, majoring in Marketing and Management.

Outside work, she enjoys fitness, fine wine and food, and spending time with her family, friends and beloved animals.

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After a successful exit in 2015, Mate met Roger Ver and co-founded Bitcoin.com, one of the original and industry-renowned cryptocurrency resources. Mate focuses on a broader vision and communicating that vision to others while staying on top of industry trends. His goal and passion are to make cryptocurrencies as popular as possible.

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For more than the past decade, he has dove deeply into web systems, spending countless late-nights-and-next-mornings building, maintaining and providing support for hundreds of varying web systems. Those client contracts and projects spanned network, IT, server and application stacks, within industries such as agriculture, tourism, engineering, manufacturing, medical, finance, retail, beauty, among others.

Today, he is responsible for leading the overhaul of technical systems, processes and products inside the company and its two product divisons. He is leading the deployment of a new, ground-up, more efficient serverless infrastructure for web app development, built-in house, powering the future of our products and services.

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As the Founder of Zucoins, Allan Endresz is responsible for running all facets of the business. Allan has a proven executive management track record and over 30 years of experience driving sales growth in the technology and payment industries.

Prior to starting Zucoins, Allan was heavily involved in Mergers and Acquisitions and other advisory roles.

At Zucoins, he has built a strong development team and holds a long-term vision for the company. Allan is a strong visionary that never gives up on his goals and dreams.

Allan and his team have developed SplitChain, a ground-up Next Gen Layer 1 network. SplitChain is solving the “Blockchain trilemma” of security, scalability and decentralisation.