One area that has been identified as a potential counter-measure to cyber-laundering is monitoring using Internet Service Providers (ISPs). The FATF has reported the following suggestions:
- Require ISPs to maintain reliable subscriber registers with appropriate identification information.
- Require ISPs to establish log files with traffic data relating Internet-protocol (IP) number to subscriber and to telephone number used in the connection.
- Require that this information be maintained for a reasonable period (possibly 6 to 12 months)
- Ensure that this information may be made available internationally in a timely manner when conducting criminal investigations.
Privacy Issues
Many of the suggestions regarding ISPs have already been mooted by legislators in the UK. However, such proposals have come under attack from privacy groups as being an unjustified invasion of privacy. Such measures will have to comply with the Human Rights Act. Under the Act, the state has to respect the rights of individuals to private life. Therefore any legislation introduced must respect that right. There are exceptions when the right can be infringed, the most relevant in this context being that of necessity to prevent crime.
The word “necessity” prevents Parliament from having carte blanche to introduce whatever measures it wants to combat money laundering. Careful consideration must therefore be given to the regulatory framework to be put in place.
Looking for signs of Cyber-laundering
In October 1999, the US Office of the Comptroller of the Currency issued a handbook on Internet Banking. It recommends that banks set up a control system to identify unusual or suspicious activities including monitoring procedures for on-line transactions. The following types of Internet activity were highlighted as matters that should raise the suspicions of the bank:
Many of the suggestions regarding ISPs have already been mooted by legislators in the UK. However, such proposals have come under attack from privacy groups as being an unjustified invasion of privacy. Such measures will have to comply with the Human Rights Act. Under the Act, the state has to respect the rights of individuals to private life. Therefore any legislation introduced must respect that right. There are exceptions when the right can be infringed, the most relevant in this context being that of necessity to prevent crime.
The word “necessity” prevents Parliament from having carte blanche to introduce whatever measures it wants to combat money laundering. Careful consideration must therefore be given to the regulatory framework to be put in place.
Looking for signs of Cyber-laundering
In October 1999, the US Office of the Comptroller of the Currency issued a handbook on Internet Banking. It recommends that banks set up a control system to identify unusual or suspicious activities including monitoring procedures for on-line transactions. The following types of Internet activity were highlighted as matters that should raise the suspicions of the bank:
- Unusual requests, timing of transactions or e-mail formats.
- Anomalies in the types, volumes or values of transactions.
- A customer who submits an incomplete on-line account application and then refuses to respond to a request for more information.
- An on-line account application with conflicting information such as a physical address that does not match the location of the given e-mail address.
- On-line applications for multiple accounts with no apparent reason to do so.
- A customer who uses the bank’s on-line transaction services to send repeated inter-bank wire transfers between several accounts with no apparent reason to do so.
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