The purpose of this paper is to explain that the commonly used method allowing for inter-agency cooperation between national financial intelligence units, the memorandum of understanding, is inadequate and ineffective in creating a cooperative global financial intelligence unit capable of combating money laundering typologies on an international scale.
Methods of international financial intelligence unit (FIU) cooperation have chiefly occurred in two ways: first, through the efforts of the Egmont Group; and second, through the inclusion of provisions concerning FIUs contained in international legal documents. The first is an impossibility.
This paper proposes that the result of implementation of the 2012 Financial Action Task Force Recommendations will be an informal network of FIUs where the Egmont group acts as a centralized operator for information exchange, effectively creating an informal global FIU (“GFIU”), but that this system, or a cooperative global financial intelligence unit system based on FIU-to-FIU exchanges will not allow for effective multilateral, international cooperation.
This is because national interests and unfamiliarity with capabilities provided in the Egmont Group’s cooperative platform have and will continue to result in under-utilization of cooperative efforts, and because the traditional mechanism employed for FIU-to-FIU exchanges, the memorandum of understanding (“MOU”), makes uniform or standardized information request and transfer procedures that are required for multilateral or multi-agency efforts to combat money laundering across international boundaries an impossibility.
The Egmont Group’s cooperational structure should be the primary means by which to achieve a GFIU.
The global combat on money laundering will be more effective, thereby more fully protecting the global economy.
A comparison between the Egmont Group’s network building mechanism and the existing use of MoU to create global cooperation against money laundering has not been analyzed.
Williams, C. (2014), "Artificial harmony: Why cooperative efforts to create a global financial intelligence unit have faltered", Journal of Money Laundering Control, Vol. 17 No. 4, pp. 428-439. https://doi.org/10.1108/JMLC-08-2013-0030
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