Judith Rinearson, Partner at K&L Gates, represented the MSBA at the Commonwealth Secretariat meeting on De-risking, which focused on the recently issued report, Disconnecting from Global Finance, The Report demonstrates the detrimental impact of "de-risking" on developing countries - - even those with no history of risk of AML problems.
Everyone present agreed that de-risking does not prevent or help money laundering; in fact, there is evidence that it increases the risk of money laundering by moving payments underground. Moreover, attendees commented on how de-risking has hurt the economies of many small developing countries such as Belize, Jamaica and Samoa.
There were many in attendance that blamed the United States for the wave in de-risking due to the Department of Justice’s enforcement actions that have been aimed at large banks. Banks were also being blamed as they imposed a “one size fits all” approach.
Judith Rinearson, noted despite the involvement of US law enforcement in triggering de-risking globally, US payment companies are also suffering from the wave of the de-risking that has impacted other parts of the world.
Additional Information about the Commonwealth meeting can be found here:
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