Comment by gruez

Comment by gruez 3 days ago

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>The money laundering control systems, as well as being ineffective at controlling crime

The point of AML/KYC regulations isn't to stop all crime, just like the point of US sanctions on Russia isn't to stop all Russian exports. In both cases it's to raise the cost of doing business for the entity being targeted. In the case of Russia, they can still sell their oil to India or whatever, but at a steep discount. In the case of drug cartels, they can still get their funds into the regular banking system, but also at a steep discount. Smuggling pallets of dollar bills across the border and setting up a network of front companies is expensive. Doing all that also which implicate them in even more crimes, so even if there's no evidence of them smuggling fentanyl, they can be prosecuted purely on the basis of having a car full of cash.

>I have money from my grandad, received 40 years ago. No one really has records going back that far but you try buying a house and they want proof of the origin of the funds.

The better question is why are you were sitting on cash for 40 years. In that time inflation already ate 66% of the value, and if you factor in the opportunity cost of not investing the money in stocks/bonds, the loss is even greater.

tim333 3 days ago

It wasn't in cash. It was in equities to a large extent. But they still ask for the source. Even if it's from selling shares they want to know where the shares came from. At least sort of. The whole thing is a box ticking exercise for compliance to cover their own arses.

In fact it's worse than that in some ways as I had an investment advisor who bought and sold stuff and I don't know if I have records of what exactly.

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  • gruez 3 days ago

    >It wasn't in cash. It was in equities to a large extent. But they still ask for the source.

    And saying "gift from dead parents" wasn't enough to placate them? They wanted receipts? I get asked about source of funds all the time, but I don't think I've ever been asked to provide proof.

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    • tim333 2 days ago

      How it works, I'm in the UK, is the government passed a law saying lawyers are responsible for knowing the source of fund and can be fined if they don't do it. It isn't really spelled out how you are supposed to prove the source. In the end I found some paperwork from a more recent source of funds and used that. It's not very organised - they just want some bit of paper in their files saying source was x in case the government has a go at them.

      The proof I did use - a more recent inheritance, I could probably use multiple times as there doesn't seem any check on you doing that. The system is not very organized.

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    • olalonde 2 days ago

      I've had to provide proof for relatively small amounts. AML regulations are intentionally vague, so different reporting entities tend to interpret them in their own ways.

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mothballed 3 days ago

The point is to raise the barriers/cost of business high enough so that the larger criminal enterprises do not have competition from the smaller ones. Ensuring the greatest threats become even bigger ones, but also that any corrupt politicians/officials/bankers get even bigger payouts and the payouts they get are more predictable from fewer channels.

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  • gruez 3 days ago

    >The point is to raise the barriers/cost of business high enough so that the larger criminal enterprises do not have competition from the smaller ones.

    You can make the same argument about literally any crime deterrence measure though? For instance having drug search dogs at airports probably makes it harder for the indie drug trafficker to get drugs through, but probably isn't going to do much against organized crime networks with insiders working at the airports and/or bribed officials.

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    • mothballed 3 days ago

      Ignoring the obvious problems with drug dogs, which I have a very personal extremely degrading and humiliating tale about involving a fraudulent search warrant that turned up nothing, a key difference here is the thing being monitored here is primae facie legal and involving forcing private parties to be the drug dog handler on behalf of the government on private property in a private transaction. In such case there is a presumption of innocence and government should need a warrant before requiring client to satisfy AML or KYC documentation.

      I can't just walk up to your doorstep, make your sister take my drug dog, and force her to walk it around your bedroom and then punish her if she doesn't do it.

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      • thwarted 3 days ago

        > In such case there is a presumption of innocence and government should need a warrant before requiring client to satisfy AML or KYC documentation.

        But since you don't know when the government is going to ask for it, you need to collect it from everyone all the time, otherwise you won't have it to satisfy the request. "What do you mean you don't know who your customers are?" is not a question you want to have to answer in the face of a warrant.

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kelnos 2 days ago

> The better question is why are you were sitting on cash for 40 years.

That's not a better question; that's just ignoring reality. Who cares why they were sitting on cash for 40 years? People should be able to do whatever they want with their money, even if it's not the most financially advantageous thing.

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bee_rider 3 days ago

I don’t think that really is the better question. It’s their money, if they want to do silly things with it that’s up to them.

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  • jacquesm 3 days ago

    Yes, but they are now aiming to use these funds to buy real estate and of course that is going to raise a bunch of flags. If the government would accept this without challenge criminals would suddenly be left all kinds of crazy inheritances. At a minimum you'd expect some documentation of how that money landed in their possession in the first place, for instance a will, a final balance of an estate and so on.

    I've handled a couple of these for family members and the amount of paperwork around even a minor inheritance can be pretty impressive.

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    • mothballed 3 days ago

      I'd expect a presumption of innocence, and at the very least I'd expect some documentation from the government showing probable cause of a specific crime the money was involved in before blocking the transaction. The presumptive innocent party shouldn't have to provide anything by default.

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      • jacquesm 3 days ago

        You have a presumption of innocence up to a certain amount. After that there is a - minor - burden of proof. Not a single time that this happened to me did any of this appear to me to be unduly burdensome or invasive, and whoever did the investigation went out of their way to state that they did these checks as a formality, not because I was suspected to be in any way out of line. I don't recall it ever taking more than a few minutes (if that) either.

        If I showed up with 50K in cash at the tellers window or a local notary to pay in part for a house tomorrow morning though I would expect the conversation would be an entirely different one.

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    • kelnos 2 days ago

      I have this idea in my head that I would rather 100 criminals get away with "all kinds of crazy inheritances" than even 1 regular person get screwed over by these sorts of financial controls.

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jacquesm 3 days ago

If I get the OP correctly it wasn't 'cash' that they were sitting on but it was a balance in a bank account. You can turn that into cash (unless lots of other people try to do the same thing at the same time, see also 'bank run') but strictly speaking it isn't cash.

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  • stouset 3 days ago

    Nobody is questioning the source of funds for the balance in a bank account that’s been there for forty years.

    OP could literally just put it in the bank, sit on it for a year, and there’d be zero questions. They are mostly only interested in knowing that you didn’t get this money from a different loan that they aren’t aware of (like a personal loan, or one you got two days ago that hasn’t yet been reported).

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haskellshill 2 days ago

"Sorry, you didn't invest your money optimally, so we confiscated it all"

Okay...

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bluGill 3 days ago

I know a number of people who don't trust banks and so have their cash in a mattris or similer things. Most are dead - they remembered banks failing in the 1930s and said never again.

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