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The 5th Money Laundering Directive (5MLD): A Step Too Far?

The 5th Money Laundering Directive (5MLD)

Find here the full transcript for the keynote speech by Dr. Nicholas Ryder, Professor in Financial Crime at UWE Bristol, at #TLTaxCon19 in Barcelona.

Nicholas Ryder: Good morning everybody and thank you for attending my talk today. Obviously coming from Wales I have a habit of speaking very quickly, so I'll do my best to slow down, so hopefully you can all understand my talk for the next 40 minutes or so. Essentially, the presentation looks at the Fifth Money Laundering Directive (5MLD), and it presents the findings of what's been about a 12-to-18-month project that looks at the application scope of 5MLD, and how it applies in particular to a broad range of issues.

For the purpose of this presentation, I'll be looking at the regulation of crypto assets within the UK and to highlight how the UK’s stance towards the regulation of crypto assets is actually quite weak. It's very poor, which would counteract some of the main conclusions of the FATF report in December of 2018.

So, as I said, the aim will be to analyse the 5MLD and then to specifically concentrate on crypto assets. So in relation to the contents, I just wanted to give a brief summary again of the sort of global anti-money laundering strategy which, what I've concluded in a number of studies, is unsatisfactory to tackle terrorism financing. Part of the difficulty I’ll discuss with the global AML strategy is that it is geared towards looking at the proceeds of profits of crime. Now of course terrorism financing is a little bit different to money laundering and doesn't necessarily involve terrorists making a particular profit. So I'll briefly run through with you how our research categorized the global AML strategy and how it will concentrate on the use of preventative measures from the United Nations, the European Union and also the Financial Action Task Force (FATF). Then move on briefly to 4MLD and 5MLD and then use the UK as a case study in relation to terrorism financing and how that is particularly weak.

The paper will conclude that there might be a recommendation in terms of moving forward to tackle terrorism financing, which is a little bit different to some of the more recent European initiatives that link into tax crimes where there's a compulsory exchange of information. So in the UK, we have a model, which is based on the voluntary exchange of information, which is a new initiative the British government has used successfully in the past five years, especially in relation to tackling terrorism financing sources. As you can see from the slides, the research project—seven years ago written, it's about a 300-page book on the topic that was good fun to write, I can assure you. In looking at the global AML strategy, we were able to identify within the UN Conventions, European Directives and Conventions, and also the FATF recommendations, a set of roughly eight or nine key criteria, key areas within the global AML strategy. And, as you can see, they range from implementing the global AML strategy to the risk-based policy, competent agencies, criminalizing money laundering, mutual legal assistance, and then more importantly—these are put in red—you've got the preventative measures. So the actual preventative measures are probably one of the most contentious issues that was discussed in some of the panels yesterday, especially from the increased costs the sector has to comply with and the threat of sanctions and penalties. Record fines have been imposed in many EU Member States and also in the US where a company has breached its AML or counterterrorism financing provisions.

If we look in a little bit more detail at the UN provisions, what we can see is that the UN has clearly adopted what we call a profit-reporting model. So within the AML framework, the key objective of the preventative measures is to identify the proceeds of profits of crime. So if you were to take your classic Hollywood film where your gangster, your money launderer will deposit a million pounds in the bank, a million dollars, essentially the profit-reporting model is looking to actually tackle that form of financial crime. However, in 2018, we published a paper, which began to question the effectiveness of these reporting obligations imposed across the European Union and imposed by the FATF recommendations. Breaking things a little bit more down, you've got obviously the UN Office of Drugs and Crime, but that's just in terms of the context really. Within the European Union, we've seen a plethora of relevant anti-money laundering reporting obligations.

So, obviously, within the UK as we discussed as part of the plenary session yesterday morning, the implications of Brexit and I said, “Yes, no one quite knows what'll happen in the UK in relation to Brexit,” but probably from a money laundering perspective, it's fair to assume that the UK will continue to maintain its standards to try to further implement the FATF recommendations, and in most cases the UK model is based upon what we called gold-plated. So the UK AML and CTF laws would go beyond the bare minimum requirements of the European directive. But of course, I'd argue that they're not really as effective as FATF have concluded in its report of December of 2018. So it's key to highlight again here that the EU has a very similar model to that of FATF and to that of the UN, which of course is the profit-reporting model. And the key question of the presentation is: Is that fit for terrorism financing? The Financial Action Task Force, obviously already discussed in one of the sessions yesterday, is essentially the major international organization that is there to tackle financial crime. Its initial remit was the 40 recommendations that were published just after the Vienna Convention in 1989 and this remit was extended to cover terrorism finance following the attacks in America on 9/11. And they were extended in 2012 to look at also bribery and corruption.

So, if we move on to the 4MLD, one of the key provisions again is the KYC, customer due diligence imposed on a broad range of reporting entities. So in relation to the 4MLD, this had to be implemented by June 2017. And, as you can see from the slides, it removes the automatic right of exemption for certain customers to submit due diligence checks and looks to impose due diligence on domestically politically exposed persons. It also links into corporations and legal entities and beneficial ownership.

But the 5MLD has to be implemented by January 2020. And this is where I think the European Union makes a particularly bold, and also I think an advantageous evolution, where it looks to target crypto currencies and virtual currencies. Now, a difficult thing within the UK is: how do you define a cryptocurrency? Is it a virtual currency? Is it actually money? And when I come on to the UK part of the presentation in a few minutes time, I've tried to highlight and illustrate to you how ineffective the UK stands towards this area, especially from within a terrorism financing perspective.

So, the 5MLD, as you can see, applies to virtual currencies. It looks to increase transparency and to increase the safeguards covering transactions both to and from countries deemed to be a high risk. And of course it ensures that centralised national bank and payment account registers or central data retrieval systems are accessible in all member states. Intriguingly, 5MLD defines cryptocurrencies as “a digital representation of value that can be digitally transferred, stored or traded and is accepted as a medium of exchange.” So, therefore, by 2020 members of the European Union have to amend and adapt their AML/CTF provisions to actually regulate crypto currencies. Various jurisdictions like America and Australia already regulate crypto currencies as part of their AML and counter terrorist financing provisions.

But one of the key things about crypto currencies is their anonymity; it’s the fact that they're able to protect the anonymity, the identity of an individual who might be a money launderer, who might be a terrorism financier. And one of the increasing threats that we’ve seen recently, is the ability of… Anyone in the room, you've all got mobile phones, a laptop, a tablet, yeah? Anybody with a mobile phone can be a terrorist financier, which is quite a scary thought. So the UN published some figures a couple of years ago where 97% of the UK population have got access to a mobile phone. So that means you can now possibly use that to transfer funds from one bank to the next bank, you could then make payments via social media platforms. But we'll come on a little bit more in relation to those particular issues in a few minutes time.

So in relation to the regulation of crypto assets, virtual currencies, the Financial Action Task Force acknowledged the threat and they concluded recently that the crypto or virtual currencies “create new opportunities for criminals and terrorists to launder their proceeds to finance, their illicit activities,” and this is the important part, “there is an urgent need for all countries to take positive action to prevent the use of virtual assets for crime and terrorism.”

So in July of this year, the FATF amended recommendation 15 by applying the risk-based policy for AML and CTF to all virtual asset providers. Now, obviously this is a very important recommendation by the Financial Action Task Force in that, to some extent, it mirrors those provisions of the European Union. But coming back to my issue with the UK. If we have regulation of crypto assets and the UK has a rather robust, and some deem it to be a rather effective method of tackling money laundering, how does it apply to crypto currencies? As I'm sure some of you are aware—maybe all of you are aware—the UK has a rather chequered history in relation to banking scams and forms of regulation. For instance, you have the 2007-8 financial crisis. And it was a 2015 study, which concluded that the financial institutions were partly to blame because of unethical and sometimes illegal practices. Before the 2007-8 crash, we had the collapse of BCCI and Barings Bank. If you can take your memories back to Barings Bank in particular and BCCI, both at the time were governed by the Bank of England, the UK’s central bank, lender of last resort. BCCI, in particular, was governed by what we call self-regulation. This is where the banking sector governs itself. Now, BCCI was the Bank of Credit Commerce International, or as Time magazine call it—this is not my quotation, sadly—the Bank of Crooks and Criminals International, that’s one of my favourite quotations that I use with my students. But because it was governed by self-regulation, when the Bank of England was made aware of the accusations against BCCI, the Bank of England simply swept it under the carpet. They did nothing about the allegations against BCCI. And there was a report by the auditors that was sent to the Bank of England that was called the Sandstorm report. Now the Sandstone report was redacted and not made available to members of the public by former Prime Minister Tony Blair, because of the accusations linking in to the Bank of England. So in relation to BCCI, the allegations were money laundering, corruption, terrorism financing, a broad range of illegal activity identified by Senator John Kerry in his report on the collapse of the Bank of America in 1989. So from a financial regulation perspective, self-regulation does not work.

The second example to support that contention is Barings Bank and the rogue trader Nick Leeson. Nick Leeson was a highly regarded trader in the UK in the 1990s and was employed by Barings Bank. At the time, it was the UK’s largest merchant bank. He went to Hong Kong, Asia Pacific market and lost over $800 million on the stock exchange. He attempted to offset those losses into the various accounts and Barings Bank collapsed because of his trades. Now the reason this is self-regulation is that the Bank of England knew about the impending collapse of Barings Bank but did little about it. The intriguing thing is that Barings Bank at its height was worth 825 million pounds. It was sold for a pound. Think about that. He was convicted to 10 years of imprisonment. One pound the bank was been sold for. All of his co-directors received a nice healthy payout on their pensions as well.

So, within the context of this presentation, crypto currencies in the UK are largely governed by an entity called CryptoUK, which, according to its guideline recommendations 13 and 14, which you can find online, they will commit to reporting any obligations for money laundering and/or terrorism financing, but they are self-regulated. So with the UK money laundering legislation, terrorism financing legislation, there is no legal obligation for any crypto asset provider to report a transaction, which is deemed to be suspicious. Now what I'll do in a few minutes time is to present evidence to illustrate that that model simply does not work and is no longer fit for purpose.

So, what is terrorism financing? Terrorism finance is reverse money laundering. So this is where a terrorist will use clean money and make it into dirty money, so it is in complete contrast of the way a traditional money laundering person will actually operate. But what you have to bear in mind is that the international provisions previously mentioned are geared towards looking for the proceeds of profits of crime. One of the best examples that I can give you of that not working is how 9/11 was financed. Khalid Sheikh Mohammed currently detained in Guantanamo Bay by the Americans sent several wire transfers to Suncrest bank in Tampa Bay all over the $10,000 threshold imposed by the 1970 Bank Secrecy Act. Those transactions were identified by the bank as part of their currency transaction-reporting regime. So if a transaction is above a certain financial threshold, the bank has to report those to FINCEN, the American FIU. In the 2000s, FINCEN received over 1.3 million currency transaction reports—needle in the haystack. Now these transactions were identified by the 9/11 Commission report and the monograph published after the events took place in 2004. So you can see clearly how the AML reporting model is not fit for purpose for tackling terrorism financing.

So if you look at the evolution of terrorism financing, the Americans would suggest that there are currently four state sponsors of terrorism. It’s an American list; it’s not my list or the UK’s list or the EU’s. It's an American list. They claim Sudan, Iran, Syria, and North Korea. It's intriguing to note that Iran actually rejected the FATF recommendations in November of last year. If you divide terrorist financing mechanisms into two strands, you have legitimate and unlawful funds. If you break it down a bit further, you can see that this is a very brief list—I could discuss this with you for next four hours but I don't want to bore you for the next four hours, okay, I'll keep it to two or three minutes. Corporate donations, misapplied charitable donations. Professor Jimmy Gurule from University of Notre Dame wrote a fantastic book in 2008, which highlighted how Al-Qaeda were able to obtain money from misapplied donations for charities to fund their activities. You've got drug trafficking. Research suggests the Taliban and Al-Qaeda were heavily using the drug manufacturing industry before and after 9/11. Kidnap for ransom. We published a paper in 2018 and in that paper we concluded that ISIS was able to obtain annually $45 million dollars per year. So countries would pay for NGO aid workers to be released up to $45 million per year. So that's quite a scary figure. Oil refining—this is where the figures get a little bit controversial. As a person said yesterday, all the figures for financial crime are all possibly flawed anyway. But for oil refining, according to FATF and the US Treasury Department, ISIS was making a profit of $1.5 million per day at the height of the caliphate. If those figures are accurate, that's over half a billion dollars per year. So ISIS has actually transformed terrorism financing from cash in hand, from misapplied donations for charities into a business. ISIS published its own annual report. ISIS had its own currency. At the height, it would have more money than several Asia Pacific jurisdictions like, for example, Western Samoa, where the assets are claimed to be in excess of $2 trillion per year. Of course, all figures are questionable but you can see how ISIS adopted what we call a corporate or hierarchal funding model. This means that ISIS has a similar model to that used by the IRA in the UK and the 60s, 70s and 1980s. ISIS will pay its employees, its terrorists. They will recompense widows and children whose fathers have been used in the war against the allies in terms of an IED, a suicide bomber. That's how that corporate model is a hierarchal approach. ISIS has its own funding model, which is largely based, I’d argue, on the IRA’s corporate funding model. Some have also suggested that ISIS will get money through remittance systems, conflict diamonds and, more recently, we've got issue of crypto currencies.

So, these are some brief stats I mentioned to you earlier, where you've got some facts and figures of how you can see the use of new technology, cryptocurrencies can be highly accessible, so it's possible to suggest that any person with a mobile phone can be a terrorist and finance… A quick question for you. Who here has a social media account?

Yeah, Facebook, Instagram, Twitter, everything, yeah? Now from November 2017, you can now make Facebook payments by Facebook Messenger. Did you know this? Yeah? Up to, I think, 30 euros a day. So what that means is that if I make a payment from myself to my wife or to a friend, it does not necessarily fall within the AML and CTF reporting obligations. If you look at Facebook’s terms and conditions, the answer is possibly “Yes” under the UK law. So who's going to report it? Facebook? The bank? This is the problem. And if you mention this to the UK financial services sector, it sends them into a complete and absolute meltdown. Because, as we discussed yesterday, this is going to increase costs. So if the UK banks are maybe paying five to 10 billion Euros a year in terms of compliance, if you look at social media platforms, this poses a particular problem. This is why I think that Libra has such bad publicity in the last three or four days, obviously with the main partners withdrawing from that form of crypto assets.

So what is the evidence of crypto assets and financial crime? Well, we've got four wonderful examples, well, three examples and one alleged example. You've got Silk Road. You might be familiar with that; one of the highest profile dark web, illegal form of Amazon, maybe? I'm not quite sure if that's the way to describe it. But you've got allegations of money laundering, child pornography. There was a 2017 study by the Jackson Society, which you can find online, and they were able to log onto the dark web. I’ve never done it myself because as an academic I might get the sack from my job if I did that, I wouldn’t really want to do that. But they were able to find a Jihadi cookbook, which you can find on the dark web. It's available for $1.43. That Jihadi cookbook would advise a terrorist or would-be terrorist on how to use TARP. TARP are the materials used by Ramadan Abedi in the Arianna Grande bombing in Manchester in 2017. For $1.43. One Euro and 75 cents or 2 Euros.

Liberty Reserve. Another example of an online platform that's abused by crypto assets. Western Express International and more recently we have the allegations against Danske Bank. Now, last time I checked into Danske Bank, no fine had been imposed by the US Department of Justice yet on the allegations in Eastern Europe about money laundering and cryptocurrencies. Conservative estimates suggest that the fine could be between $8-to-12 billion. So it could be a substantial fine on Danske Bank but again we're waiting for some more information on that.

This is a rogue's gallery of wonderful individuals who have been recently convicted in the UK of money laundering through crypto assets. The top left gentleman is the Dread Pirate Roberts 2. He set up Silk Road 2 and was a university student who dropped out after one year and is now serving four years imprisonment for drug trafficking, money laundering and making indecent images of young children. Crypto assets, again, that's how he was partly financed. The gentleman to the top right was an example of what we call a confiscation order. So this is where the UK police were actually able to freeze and confiscate Bitcoins to recompense members who'd been victims to fraud. The NHS and MT.Gox are also prime examples of cyber crime. You’ve probably had emails recently; I used to get the ones, “Dear sir/madam, blessed be to God. I just won the Euro lottery. I've got $500 billion. Please give me your bank account.” Yeah, that's a classic 419 scam, of course. The more recent was a little bit more sinister and it says, I had one on last week, “Dr. Nic, we've accessed your laptop. We've seen your images.” What? BBC Sports, BBC News, Facebook, maybe some financial crime websites. To get your computer un-hacked, you have to pay in Bitcoin. So it's the same scam but again it links into crypto assets. So there's some examples in the UK.

Now, for terrorism financing, we need to go across the Atlantic to America for some recent convictions. For instance, top left of your screen is Ardit Ferizi. He created a kill list for ISIS of 1300 US armed personnel for the Army in America and he sent that to ISIS. And he hacked into computer systems and to actually un-hack them again you had to pay with various Bitcoins. He was convicted and is serving 20 years imprisonment. The gentleman to the top right is Mohamed Elshinawy who provided funding to ISIS of $9,000. He converted it to ISIS via cryptocurrencies and again is serving 20 years imprisonment. Down the bottom is Gregory Lepsky, who is serving 16 years imprisonment after he was convicted of attempting to finance ISIS via crypto assets. More recently, we have a young individual, a gentleman called Ali Shukri Amin, 17 years old. My son is 14. Using Twitter to advise ISIS and how to mine Bitcoin. So I set up a Twitter account yesterday to speak to the airport about the flight tonight, get some advice off them. So using Twitter to actually advise ISIS on how to mine Bitcoin. He's now serving 11 years four months in prison. And the last example is Zoobia Shahnaz. Now if you are familiar with US financial crime legislation, you'll be very familiar with the Wire Fraud Act and Mail Fraud Act. They are the US’s Colt 45; if they’re going to go after you for money laundering and fraud, that's where you will be charged under. So in relation to Zoobia, she committed fraud of $62,000 and attempted to transfer that to ISIS via Bitcoin, and is now serving 20 years imprisonment.

So the cases suggest that crypto currencies are becoming a mechanism for terrorism finance; it's inevitable. But within the UK, we have what appears to be a robust legal framework to tackle terrorism financing. Now, luckily for you, I'm not going to go through all the provisions of the Terrorism Act right now, but I want to look at section 19 in particular because it links in quite nicely with the panel discussion following this talk. Under section 19 of the 2000 Terrorism Act, the UK reporting entities—your banks, law firms and so on—by law have to submit a suspicious activity report. In the UK, we call them Defense Against Terrorist Financing Suspicious Activity Reports (DATF SARs). I want to call them DAFT SARs, but I can't because it just amuses me.

But the regime is littered with problems. For example, how do you define suspicion? How long is a piece of string? So case law in the UK is very inconsistent as to what's meant by the phrase suspicion. According to one Court of Appeal decision, it is a mere gut instinct. I was a lawyer, I'd like the law to give us clarity and examples, but what does that mean? A mere gut instinct? Does that mean a Welshman comes into the bank; you think he's a bit suspicious, I’ll report him? You got these issues about what is deemed to be suspicious. Some are going to be obvious, but in terms of clarity, we don’t know how to define suspicion in the UK. And I think that applies to a lot of different jurisdictions.

The quality of SARs. If you talk to UK companies who are involved in this—the major banks in particular—they will be very familiar with the obligations but they’re loose with something, which is called defensive reporting, where if they don't submit the reports, they're going to get fined. The bank will get fined and the MLRO will be fined. This is what we call credible deterrence. So the UK’s Financial Conduct Authority will fine the bank and also the money laundering reporting officer (MLRO). Even if there's no evidence of money laundering at all.

The highest fine imposed to date in the UK so far was when Deutsche Bank in January 2017 was fined 173.1 million pounds but no evidence of money laundering. Now contrast that with the US stance. Think back to seven years ago when HSBC, as I mentioned briefly in the panel discussion yesterday morning, signs a deferred prosecution agreement with the US Department of Justice, pays a fine of $1.9 billion. So where there's an example of money laundering, it's a significant fine by the US authorities. In the UK, where there is no evidence of money laundering, the fines are significantly less.

Compliance costs are a massive issue. The banks would argue that the regime is very disproportionate, it's very unfair. I'd agree with that. And what's intriguing is FATF would like the UK to submit more and more suspicious activity reports. They don't think there's enough. So you have a situation where FATF want the UK have more and more SARs submitted. The National Crime Agency is struggling with the number of SARs submitted because of these particular queries. So you have lack a definition of suspicion, defensive reporting, increased compliance costs, and the actual quality of information.

Now, those criticisms have been well identified and commented upon by the Home Office, the Law Commission Report in 2018, and also the Financial Action Task Force. But what is intriguing here is that brief quotation by the Law Commission and the Law Commission published an extensive review of the AML and CTF reporting obligations in the summer of last year, and they concluded that “retrospective SARs are less helpful in terrorism financing cases.” That is clearly the case, I think as somebody mentioned yesterday, not one terrorist attack in Europe in the past five years has been prevented by a suspicious activity report. So do we go as far as, do we say this regime is not fit for purpose or do we simply relook at the regime and maybe make some alterations, some conclusions?

So for crypto assets, there are three particular problems. The first one is that crypto assets are not governed by the UK’s Financial Conduct Authority. This to me is a major problem. The FC would provide some legal framework to regulate crypto assets; it means that investors can be protected. And the second example is that crypto assets are not part of the SARs regime. Like I said to you beforehand, it’s based upon the concept of self-regulation. And it's not being held by a government in what I call a start-stop policy. The government in the UK has a very inconsistent policy towards the regulation of crypto assets.

So is there a solution? Well, I would suggest that there is and that is called JMLIT, which is the Joint Money Laundering Intelligence Task Force. This was set up by our former Prime Minister Theresa May, now backbench conservative MP because of Brexit, in 2015. And this looks to adopt a different exchange of information process where it's voluntary. There's no legal obligation to report like in relation to some tax issues; it simply is voluntary. So what you end up having is what's called a super suspicious activity report or a super SAR.

Now JMLIT covers 98% of all UK bank accounts. And to show how this works, within 12 hours of the London Borough market terrorist attack in 2017-2018, the police were able to identify the credit card used to purchase the actual hire van, and that it wasn't a broad terrorist cell. Now, that is the only example JMLIT have released in terms of national security, I'm assuming, but that to me illustrates what the benefits could be of this particular exchange of information that is voluntary. So because of having this exchange of information, JMLIT has acted in over 60 arrests of 1000 investigations and 2000 bank accounts have been shut down with links to and allegations of money laundering, corruption, bribery and also fraud. So you can see by having this exchange of information, which is voluntary, it has led to some arrests and prosecutions, and the record number of confiscation orders by the NCA and relevant police forces.

However, there's a slight problem. It doesn't apply to all sectors. It doesn't apply, for example, to the property sector. And, of course, the property sector in the UK has strong allegations about money laundering, which are very well documented by several other projects. It doesn't apply to law firms. It doesn't apply to financial advisors. So what I've concluded in this paper is that JMLIT needs to be expanded to incorporate maybe some more reporting entities like law firms, like IFAs, like estate agents. But I'd even go bolder and say, why don't we use social media platforms? If you can now make payments via Facebook Messenger, which opens up to billions of potential transactions, even if you don't submit a SAR, if you could exchange the information of a person—I appreciate that there are concerns raised about privacy, I understand that—but this might give you a more holistic understanding of the would-be money launderer and/or terrorism financing.

So in terms of the findings of this particular paper, which should be out early part of next year, we've concluded that the UK really needs to incorporate its legal framework to implement 5MLD and to make crypto currencies, crypto assets as part of the SARs regime.

I would also like to expand this to include social media platforms and the use of JMLIT, as well. So via the dark web, money launderers, terrorism financiers are able to exchange information. And what we're now finding, and this is quite a particular scary thought, is that in certain parts of Africa and the Asia Pacific Rim, ISIS, Boko Haram, Al-Shabaab and Al-Qaeda are actually working together. And some people call that correspondent terrorist financing, where they are simply liaising with each other in terms of their funding mechanisms. So what we found in the paper we published last year, is that ISIS actually have evolved their funding streams. They're looking to learn from the mistakes made by Al-Qaeda in relation to the financing of terrorism. So these things are significantly evolving. And it might be within six months they move on from crypto assets to a new form of terrorism financing that no one has even thought about yet.

So what we've advocated and concluded is that JMLIT is an effective model moving forward. It's based upon, not the compulsory exchange of information, but the voluntary exchange of information. And I think that's particularly important, so hopefully that will reduce the costs of the banking sector. So, I think this would go possibly some way to closing some of those loopholes within the UK’s existing counter terrorist financing and anti-money laundering legal frameworks.

Question: I'm actually curious as to how JMLIT works. Does it work for prevention or does it just store information to be recovered after something has happened? Are there some algorithms involved to figure out what may be suspicious in the banking system?

Nicholas Ryder: It does both. My answer for that would be yes, there will be algorithms used. I am aware that there are many UK companies that are developing software to assist in attempting to spot what could be deemed to be a suspicious transaction. But in relation to JMLIT, they store the information and they will pass it on to the NCA for further investigation.

Question: I also wonder whether you follow the development of the JMLIT system and whether developers of JMLIT have cooperated with other European governments?

Nicholas Ryder: From my understanding, nothing has been publicly released. But to me, it would make sense that JMLIT would be liaising with its European counterparts, if it’s Europol, the Egmont Group, for example, so, yeah, they probably will be in terms of the cross-border investigations.

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