Would modern AML and KYC regulations have prevented asset transfers during historical crises?
Compliance
Asked by Question Bot02/Mar/20121 answer
1 Answer
F
Faisal Khan
Answered 02/Mar/2012
First of all, I would like to say, this is a great question. Today, if we were to juxtapose the sad situation Jews in Hitler's Germany were facing Pre and during World War II, money transfers would not be much of an issue. Consider the countries from which the money is itself exiting from (outflow), most of the countries would be classified under Europe (Italy, Poland, France, etc) and of course Germany itself, which have pretty decent mechanisms to export wealth.
Outflow of money can be done both as a tied account where the identity of the person(s) is attached to the financial holding, or bearer (i.e. cash of bearer certificates, gold, etc.).
Depending where the money is shipped out to, the KYC element would still be required (as mandated by most Central Banks), with a large exodus of wealth, the KYC may or may not be relaxed (depending on how welcoming the recipient country is towards that wealth).
Todays financial instruments (other than cash, and in some cases precious metals like gold, etc) have essentially eroded the ability to be anonymous. There are still ways and mechanisms to hide the true identity of the owner (via proxies, masking, etc.) but a trail is still left nonetheless.
Most recipient countries would not have an issue with wealth coming in, provided source of funds has some documentation drawn out to it. As a tangent example, look at how wealth has gone into the economies of Canada, US, Australia, New Zealand as part of their immigration program, where if you were to invest X amount of Dollars (or equivalent), you can immigrate there. Scores of black, white and gray money has poured into such economies from all over the world, especially India, Pakistan, China, Russia, some Middle East Countries, South Africa and a host of Eastern European nations.
During the Gulf War (Kuwait, circa 1990), a lot of money went to US and Europe, where it was hardly scrutinized, but was welcomed.
One automatic result of exporting legal or illegal wealth to another country is that it becomes legal (or white) once it enters the other country and depending on the structure of the inward flow, the wealth may or may not be subjected to taxes. For example quite a few countries in the mid 80s and 90s introduced a scheme to increase the net inflow of foreign exchange, where by inward money flow were traded up for the local currency and that particular sum of money was deemed tax free.
Most astute investors or people with a sharp sense of financial knowledge about other economies would keep their money tied up in stocks, bonds, commodities and cash, offering them perhaps a lessened scrutiny than a single in-flow (wire transfer).
Outflow of money can be done both as a tied account where the identity of the person(s) is attached to the financial holding, or bearer (i.e. cash of bearer certificates, gold, etc.).
Depending where the money is shipped out to, the KYC element would still be required (as mandated by most Central Banks), with a large exodus of wealth, the KYC may or may not be relaxed (depending on how welcoming the recipient country is towards that wealth).
Todays financial instruments (other than cash, and in some cases precious metals like gold, etc) have essentially eroded the ability to be anonymous. There are still ways and mechanisms to hide the true identity of the owner (via proxies, masking, etc.) but a trail is still left nonetheless.
Most recipient countries would not have an issue with wealth coming in, provided source of funds has some documentation drawn out to it. As a tangent example, look at how wealth has gone into the economies of Canada, US, Australia, New Zealand as part of their immigration program, where if you were to invest X amount of Dollars (or equivalent), you can immigrate there. Scores of black, white and gray money has poured into such economies from all over the world, especially India, Pakistan, China, Russia, some Middle East Countries, South Africa and a host of Eastern European nations.
During the Gulf War (Kuwait, circa 1990), a lot of money went to US and Europe, where it was hardly scrutinized, but was welcomed.
One automatic result of exporting legal or illegal wealth to another country is that it becomes legal (or white) once it enters the other country and depending on the structure of the inward flow, the wealth may or may not be subjected to taxes. For example quite a few countries in the mid 80s and 90s introduced a scheme to increase the net inflow of foreign exchange, where by inward money flow were traded up for the local currency and that particular sum of money was deemed tax free.
Most astute investors or people with a sharp sense of financial knowledge about other economies would keep their money tied up in stocks, bonds, commodities and cash, offering them perhaps a lessened scrutiny than a single in-flow (wire transfer).