How Anti-money Laundering Successes Obscure ‘Almost Complete’ Failure

Enforcement crackdown hides uncomfortable realities

Next month, Westpac’s new chairman faces Australia’s “biggest breach of anti-money laundering laws”, but there’s more at stake — in every country affected by such laws — than most reports suggest. A vigorous regulator is tipped to beat its record-breaking penalty against another major bank, amidst “significant” claims against a third. On the other hand, growing enforcement successes obscure uncomfortable realities about the impact on crime.

Breathless reporting obscures sad reality

In November, Westpac, Australia’s oldest bank, was charged with 23 million breaches of anti-money laundering laws, including allegedly overlooking payments potentially indicative of sex exploitation overseas.

Most reporting is scrupulously accurate, yet misleading. Missing from most of the thousands of published reports is a broader perspective.

Curated to highlight its most salacious claims, the regulator’s announcement unsurprisingly generated excited commentary calling the “bombshell revelations” “deeply troubling”, “incredibly concerning” and “about as serious as it gets”. Penalty predictions of $1 billion or more ease the regulator’s burden. Bloodied corporates…