AML Leadership
In this issue of AML Leadership, a conversation with Dr. Nicholas Gilmour , co-founder of Vortex Risk and co-author of ‘The War on Dirty Money’ published by Bristol University/Policy Press 2023.
Can you give us a quick overview of your career in law enforcement and fighting financial crime so far?
My career started in a completely different field, but throughout this time I was drawn in to reading about organised crime and later on, about the ‘money launderer’. I was always amazed how criminals managed (on the scale of things) to succeed.
A later career change into the UK and New Zealand Police gave me ample opportunities to observe and study organised crime and financial intelligence. Alongside analysts roles and a Masters in Transnational Crime Prevention, then followed by a doctorate in Criminal Justice with a focus on the prevention of money laundering I was able to bring together theoretical understanding and reality. But for the last 8 years I have found solace in consulting on the many problems in the fight against money laundering.
Just recently I become more attuned with creating a solution aligning with my intentions for the career I have now become so enthusiastic about: the launch of Vortex Risk.
In your opinion, what are some of the misconceptions in the area of trade based money laundering (TBML); what are the new typologies in TBML; and what is your advice to banks?
There are many misconceptions surrounding TBML. The first is that it is a method of money laundering or as is so popularly defined – a typology. It’s not really a single ‘type’ of money laundering. In reality the commonly defined TBML is just money laundering – but in this instance through or using trade.
The second misconceptions: TBML involves the common 3 stages of money laundering; placement, layering and integration. It doesn’t, because TBML, like all other money laundering is simply ‘transfers and purchases’ – some real, some not. Some are repeated many times, some are simply ‘one off’s’.
My advice to banks regarding TBML – identify your risks and understand how the risks from money laundering which reasonably exploit trade services are not something which are only managed within compliance. If a bank is to take the Risk Based Approach, then it must understand its risks so that it can (where necessary or simply choses to) mitigate them. Red flags should not be a source of your TBML detection. Two wrongs do not make a right.
Around a year ago, you co-authored a book titled “The War on Dirty Money”… what is the focus of the book; what motivated you to write the book; and what have been some of your personal incremental learnings on the topic of financial crime in the process of writing the book?
The War on Dirty Money has become a unique book because it’s a book of solutions. We intentionally set out to discuss the various efforts from a global perspective in the prevention and detection of dirty money. But rather than simply raising the issues for everyone to understand and therefore complain about, we decided to provide a series of solutions. It’s a critical book and we suspect it makes some professionals quite uncomfortable when they read just how wrong – what they are doing, teaching, preaching, and pursing – really is. But the book was written this way to encourage discussion, focussed research and where possible a rethink of the failed activities that are everywhere in the fight against preventing and detecting dirty money.
This was our motivation and perhaps the most striking thing for me, was the scale of the failed war against dirty money. So many features that are failing and yet, the desire, the impetus, the obligation to stop doing something that is clearly not working – just doesn’t seem to be there. Although we stopped at 20 chapters, mostly because we were constrained by a word count we had already exceeded, the scope to write more was always present. Perhaps this is a good reason to write a follow up book.
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