The true crime is involving a multinational corporation in a transaction between two private individuals at the local market.

I like cash because it's direct, and where possible I avoid paying by card because I don't want the merchant to pay fees to third parties.

In Europe, most of the time, using cash doesn't imply avoiding taxes on the transaction, but having cash is essentially sovereignty.

I guess I don't really understand it. I understand how a bank robbery leads to dirty money - the bank has the serial numbers.

In what way is money from selling drugs "dirty"? Why does it even need laundering?

I learned a lot about the AML system many years ago and still have some books about how it works on my bookshelf. It's fascinating stuff.

A few minor comments.

My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were accepted without question or comment. To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance. You can't get any high value notes there, they just don't exist, because the state assumes that anything it can't see must automatically be suspicious. And there's so much street crime, and the police care so little about burglary, it would be very dangerous to hold such notes. But in Switzerland it's safe and the government doesn't try to wipe cash out, so paying with high value notes is common. (Although bank notes are in no way as private as people assume and can be tracked quite well, because they don't tend to circulate far.) This situation makes a mockery of the recommendation to fight crime by removing high value bank notes. The UK did this already and ML is out of control there: criminals just don't care.

I looked into the case of George Cottrell once. The case against Cottrell collapsed because it was founded on entrapment (the eight months was a plea deal in the usual American fashion, and doesn't mean much). It boiled down to undercover FBI agents asking Cottrell, "how could we launder money" and he explained how to do it, in the way anyone familiar with the topic could. He didn't make any offers to actually do it, didn't do it, and that's why "could be jailed for up to 20 years" turned into an eight month plea bargain to let prosecutors save face. Then after he was released he trolled US LE by writing a book called "How to launder money". Usually not given is the subtitle: "A guide for law enforcement and politicians". It's not written for criminals but people love to omit that detail.

Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it and fear that by talking about it, they'll just teach more people how to do it. It's an infinite money glitch but in the real world. It's interesting that the UK thinks they solved it. I suspect they didn't, rather, enforcement collapsed elsewhere and it became easier to just go back to other ways of scamming the government.

How can one write about money laundering without talking about crypto currencies ?

Here's an anecdotal thought: AML laws surprisingly work well to discourage offline transactions by tax-paying citizens, helping maximize tax reporting and improve tax collection. As a result, governments continue to strengthen and expand laws in that direction.

First off, money laundering does not require cash. So the premise is a bit strange.

Second, I submit that money laundering should not be considered a crime at all. Monitoring it (for example, banks required to report large cash transactions to the government) just leads to mass surveillance of innocent people.

Transferring money from A to B - why should that be a crime? The point of anti-money-laundering laws is that the money generated at point A may have been generated illegally. It isn't the money transfer that is the problem, it is the illegal activity. The police need to put in the effort to prosecute that illegal activity.

This is reminiscent of the continual pressure to break end-to-end encryption. The police want an easy way to do their (admittedly difficult) job. But the price is just too high: mass surveillance, and many false positives, affecting the general populace.

In Italy there is a very aggressive law against money laundering: if you withdraw more than 1k cash, it triggers a call to the police. I know it's the same if you do it over multiple days.

I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.

Aside: The author of this article wrote a fantastic novel that not a lot of people know about called “The Debt to Pleasure”. One of the best instances of the “unreliable narrator” I’ve ever read.

" Bullough gives the example of a Mexican drug dealer who smuggles product across the border to the US. The drug in question would once have been marijuana, then cocaine, and is now likely to be fentanyl, which is cheap to manufacture and easy to conceal. The drugs are sold in the US for cash, which is used to buy, say, agricultural equipment. "

Wouldn't the person buying the tractor in the US for $$$ have to show where that money came from? Can you show up to John Deere with over a million dollars _in cash_?

POSWID* says that money laundering laws are intended mostly to keep the proles and other people within the system honest, while providing a clean and easy system for people with enough money or cachet to bypass it.

* https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...

Unrelated, but I love finding lower-case numbers in the wild!

(Note the two and the zeros in “$20 billion to $80 billion.”)

> I reckon the luxury watch trade is 80 per cent money laundering

Found this quote interesting given Europes richest person is the head of a luxury brand company.

I always wonder who was buying all this high end stuff - the concentration of wealth has created a more billionaires - but they aren't that many of them and there is only so many watches one person needs.

It also may explain why China is struggling to establish it's own luxury brands - the money laundering prefers that cross border flow.

All of Bullough's books are worth your time and variously go deeper into this very subject.

I always thought the TV show Ozark was fairly accurate in it's depiction of money laundering. The family would buy a small business that they could inject cash and cook the books with fake sales.

Here are the last two sentences:

> Governments don’t do anything about the status quo, for a number of reasons: it inconveniences them to look too deeply into the darker corners of their own financial systems, and they make money from printing their own currencies and don’t much care how that cash is used. But most of all, they don’t do anything about it because they haven’t got a clue.

The last one couldn't be farther from the truth, and the first one couldn't be farther from a lie.

It's very simple, there is more incentive for money laundering than there is fighting it. It's the same reason there are more lawyers working for large companies vs small guys. The invisible hand that determines the structure of our society.

The state's ability to track and criminalize people based on financial behaviors through deputized financial intermediaries is new, and temporary.

Outside of this social graph, where private cash transactions still exist, the state lacks power and relies on stigmatizing cash ownership, consumption, movement. This stigma is largely successful and ubiquitous but inconsequential to anybody that matters or has a lawyer of their own.

Electronic settlement of funds since the 1970s has allowed for the state to leverage financial institutions for records and enforcement. Electronic settlement without institutions since the 2010s removes that power from the government and is merely a reversion to the mean. Any delay in the prevalence of this is both user-error, social stigma, and a government's unfamiliarity with the reality that their own constitutions and documents that organize the state are things that have to be updated to actually remove an expectation of privacy from finance.

> We don’t know what successful money launderers are doing in the present moment. All we do know is what unsuccessful ones have been caught doing in the past.

One major and necessary fallacy inside the social graph is that electronic settlement between institutions assumes that the deputized institutions have blessed the funds and user as not money laundered. Only the user and who they transact with can trigger an investigation by the government at this point, by reporting the money for taxes or in a large withdrawal to cash out of the social graph, without further laundering it. This user error is mostly mitigated as soon as cross border payments are done, because the next financial institution doubly assumes funds from another country's banks are clean. The banks and sovereignty become the washing machine inside the electronic settlement system.

This is doubly important to realize, because it's the tip of the iceberg in brand sovereignty. One country's illegality is not another country's illegality.

You can't simultaneously be for a stigma against withdrawing large amounts of cash, while considering the Communist Party's capital controls to be oppressive. Removing one capital control, blesses the other.

This is a blind spot for most people, since they don't consider them to be the same things, but fortunately this cognitive dissonance highlights the reality. It is impossible to completely stigmatize and the capital routes around the stigma and all capital controls, unless the entire world is under a single totalitarian regime.

All while only the edges, moving between physical cash and electronic system, and moving cash between borders and the electronic system, are policed, in what could really only be the ultimate hubris of expecting the state to be involved at all.

And it's not just cash. Its assets too. The state is hoping for titled and electronic settlement of assets. In the last 30 years a systematic global dismantling of explicit "bearer assets" has been done, when the bearer assets were offered by the state. But this is also unsuccessful, as since the 2010s, the bearer assets created and settled without a financial intermediary have existed and been wildly popular.

All capital controls have been obsoleted while they were never fully implemented to begin with. No matter whether that's the idea of your neighbor holding a lot of physical cash, or a subject of the Communist Party in another country circumventing capital controls you consider oppressive.

This article covers the same points with a wildly contrived conclusion: To attempt to change anything in favor of the state being more effective at enforcing its invented crime of money laundering instead of curbing the actual illicit behaviors. For reasons that are assumed and unexplained, so it's impossible for me to change my view on. My view is simple - capital controls are dead and a waste of time. The article and both books it references actually agree on that. My other view is that the state should just do classic investigative work on illegal behaviors which means finding the people involved and subpoena-ing them, something it seems to have forgotten how to do in favor of relying on deputized intermediaries who are temporary, ineffective, and inconvenience just the law abiding.

Alternative to archive.ph

Disable Javascript and CSS

For example

   curl https://www.lrb.co.uk/the-paper/v48/n09/john-lanchester/squillions \
   |sed '1s/^/<meta http-equiv=content-security-policy content=\"default-src none\">/' > 1.htm
   firefox ./1.htm 

Or use a text-only browser

   links https://www.lrb.co.uk/the-paper/v48/n09/john-lanchester/squillions 
   links -dump https://www.lrb.co.uk/the-paper/v48/n09/john-lanchester/squillions

In this day and age "money laundering" just means "not bending over and letting the state tax you to oblivion". TFA is just scare mongering.

People need to learn about Bitcoin.