AT: Money Laundering DA

Anti-Money Laundering surveillance is irrational, harms

banking services, and lacks tangible effects
Rahn, 2014 (Richard W. Rahn, senior fellow at the Cato Institute and
chairman of the Institute for Global Economic Growth. Anti-Money
Laundering Surveillance Hurts Banking Services
http://www.cato.org/publications/commentary/anti-money-launderingsurveillance-hurts-banking-services) // IL
For the last several decades, global liberty-haters have dreamt that all financial privacy would be
eliminated. They have sought out a variety of excuses to act as Peeping Toms peering into your bank

push was to enact anti-money laundering legislation,

with the claim that it would make catching drug dealers and other assorted
criminals easier. The United States passed its first anti-money laundering law in 1986 despite the
accounts. In the 1980s, their big

fact that no one could objectively define money laundering, because it is not an action but an intent to

The whole global anti-money laundering regime makes no

economic sense, is unworkable, and is morally repugnant . In 1989, at the G-7
act unlawfully.

summit in Paris (before Russia joined and made it the G-8), it was decided to create an international
organization dedicated to combating money laundering duplicating the efforts of the International
Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) which
already had the responsibility. The new organization was called the Financial Action Task Force on Money

Over time, the task force expanded its membership to include

some corrupt governments such as Russia (which is alleged to engage in
money laundering). By the way, a Russian government official, Vladimir Nechaev, is now president
of the task force. As a result of all the global anti-money laundering regulations,
total compliance costs for financial institutions are now in the hundreds of
billions of dollars. Basic banking and other financial services have been
reduced and even eliminated for tens of millions of people around the world .
Laundering (FATF).

Have all of these regulatory costs done any good? In an effort to answer that basic question, the Center for
Law and Globalization (a partnership of the University of Illinois College of Law and the American Bar
Association) published a report in January, Global Surveillance of Dirty Money. The authors had the full
cooperation of the IMF and FATF, yet the conclusions were damning. One of the authors of the report,
Terence Halliday, stated: We

find that the current system is pervasive and highly

intrusive but without any evidence of tangible effect . The authors were quoted in The
Wall Street Journal as saying the IMF and FATF have built a Potemkin village and a paper reality based
on a plausible folk theory, rather than data and evidence of what works.

AML laws impose on privacy and more drastically harms

the poor
Mitchell, 2012 (Dan J. Mitchell, Daniel J. Mitchell is a top expert on fiscal

policy issues such as tax reform, the economic impact of government

spending, and supply-side tax policy. Mitchell is a strong advocate of a flat tax
and international tax competition. Prior to joining Cato, Mitchell was a senior
fellow with The Heritage Foundation, and an economist for Senator Bob
Packwood and the Senate Finance Committee. He also served on the 1988
Bush/Quayle transition team and was Director of Tax and Budget Policy for
Citizens for a Sound Economy. His articles can be found in such publications
as the Wall Street Journal, New York Times, Investor's Business Daily, and
Washington Times. He is a frequent guest on radio and television and a
popular speaker on the lecture circuit. Mitchell holds bachelor's and master's

degrees in economics from the University of Georgia and a Ph.D. in

economics from George Mason University. World Bank Study Shows How
Anti-Money Laundering Rules Hurt the Poor
https://danieljmitchell.wordpress.com/2012/04/19/world-bank-study-showshow-anti-money-laundering-rules-hurt-the-poor/) // IL
Ive complained many times about the pointless nature of anti-money laundering laws. They
impose very high costs and force banks to spy on their customers, but they
are utterly ineffective as a weapon against criminal activity . Yet politicians and
bureaucrats keep making a bad system worse, and the latest development is a silly scheme to ban $100

poor people are the main victims of these expensive and

intrusive laws. According to a new World Bank study, half of all adults do not have a bank account,
bills! It also seems that

with 18 percent of those people (click on nearby chart for more info) citing documentation requirements
generally imposed as part of anti-money laundering rules as a reason for being unable to participate in
the financial system. But this understates the impact on the poor. Of those without bank accounts, 25

one of the reasons that costs

are high is that banks incur regulatory expenses for every customer, in large
part because of anti-money laundering requirements, and then pass those on
to consumers. Here are some of the key points in the World Bank report. The data show that 50
percent said cost was a factor, as seen in the chart below. But

percent of adults worldwide have an account at a formal financial institution Although half of adults
around the world remain unbanked, at least 35 percent of them report barriers to account use that might
be addressed by public policy. The Global Findex survey, by asking more than 70,000 adults without a
formal account why they do not have one, provides insights into where policy makers might begin to make
inroads in improving financial inclusion. Documentation requirements for opening an account may
exclude workers in the rural or informal sector, who are less likely to have wage slips or formal proof of
domicile. Analysis shows a significant relationship between subjective and objective measures of
documentation requirements as a barrier to account use, even after accounting for GDP per capita (figure
1.14). Indeed, the Financial Action Task Force, recognizing that overly cautious Anti-Money Laundering and
Terrorist Financing (AML/CFT) safeguards can have the unintended consequence of excluding legitimate
businesses and consumers from the financial system, has emphasized the need to ensure that such
safeguards also support financial inclusion.

Money Launderers are good for banks

Levi, 91 (Michael Levi, Reader in Criminology, University of Wales, College

of Cardiff Wales CFI 3AS, REGULATING MONEY LAUNDERINGThe Death of

Bank Secrecy in the UK, BJC, Spring 1991,
http://bjc.oxfordjournals.org/content/31/2/109.full.pdf+html) E. T.
Banks are in business to make money. Undetected money launderers are
good business for bankers since, although they do not usually provide long-term deposits or
want to borrow money (and thereby generate profitable interest payments for banks ),
they do assist liquidity and contribute to overheads by paying bank charges .
(Sometimes they pay personal transaction charges to bank staff, but this does not directly benefit the bank
itself or its shareholders, particularly if the money does not stay in the bank for long.) In competitive
national and international markets, bankers can rationalize their moral blindness on the grounds that
critical inquisition of potential customerslegitimate and illegitimatewill simply displace them to rival
financial institutions. In this respect, it is worth stressing that historically, much of the American concern
about money launderingwhether of income from illegal sources by organized crime groups or of income
from legal sources by the 'average American'has been in relation to (1) small banks beneficially owned
by organized crime groups, and (2) offshore 'shell' or 'phantom' banks whose principal existence is as a
brass plate at the office of a West Indian or South Pacific lawyer. However, during the late 1970s and
1980s, the US Treasury expanded its sphere of operational interest to include all the financial transfer
centres, including the UK, and major banks, not just marginal or wholly fraudulent ones.
It would be wrong to see this increased attention to banking information solely as a terrorism/drug moneylaundering nexus, aimed solely at normal 'police problem' populations. The Senate Permanent
Subcommittee on Investigations observed that the abuse of offshore tax havens was 'not limited to any
particular faction of the US population' and 'is continuing to grow at an alarming rate' (PSI 1985: 2-3).
Indeed, the consequence of concentrating on drug money is 'to leave virtually untouched many of the socalled "white collar" criminals who may be just as guilty of violating the reporting requirements of the Bank
Secrecy Act' (p. 20). Some might argue that this expression of support for international action against US

tax evaders is merely a rhetorical device to conceal the underlying interest in suppressing political
dissidents, but it is simplistic to view tolerance of tax evasion as being unambiguously supportive of elite
interests, however such elite interests are defined (see further Levi 1987).