Money is laundered in legitimate businesses

Organized crime needs much more than moving money. It needs that money to appear to come from legal activities. For that, it can turn to companies, investments, contracts, suppliers, and routine commercial operations. The money is laundered in the legitimate economy, and that reality should change the way we discuss prevention. When we talk about money laundering, we tend to think of banks, suspicious transaction reports, and criminal prosecution. All of that matters, but the damage starts much earlier and reaches much further. Illicit capital competes with businesses that do have to finance themselves, pay taxes, and sustain themselves with genuine income. It can alter prices, buy influence, and force its way into activities on which jobs, communities, and public resources depend. Protecting businesses from that competition is also a fundamental part of the purpose of the anti-money laundering system. The response, however, is usually organized in silos. One authority gathers information that another cannot use in time. The private sector reports without receiving information that would help it recognize new risks. General obligations are imposed when what is needed is to better distinguish where the vulnerabilities lie. And, in the meantime, criminals adapt, create new companies, or cross the border. Our anti-money laundering system, in my view, needs a reformulation. Before adding duties or institutions, we need to better understand the risks, the vulnerabilities, and the contribution each actor can make, because we cannot ask everyone the same thing. The UAF produces financial intelligence that provides valuable leads to those in charge of investigation and criminal prosecution. Asking it to also fulfill that latter role would be asking the impossible, thereby weakening the system itself. The tree provides shade, and that shade already has enormous value. Coordination between institutions is indispensable, but it is not enough on its own. Illicit flows respect neither organizational charts nor national borders. Each country is part of an international system and needs to talk with the others. In that sense, the FATF's 40 Recommendations are the standard we should keep in view so as not to reinvent the wheel. They offer a common language that each country must apply according to its risks and its own realities. Cooperation makes it possible to follow people, companies, and assets when an operation continues in another jurisdiction. We must also open that conversation within each country. The State investigates, supervises, and administers information. Businesses—the channel through which dirty money is laundered—know their operations, clients, and supply chains better than anyone. Civil society observes impacts, demands explanations, and can flag risks that do not appear in a database. It falls to the Legislative Branch to define clear rules, give institutions tools, and ask whether they are producing results. Each actor has a different responsibility, but undeniably all have something to contribute. This does not mean multiplying requirements by reflex. We want economies that grow, innovate, and attract investment. If we treat every activity as presenting the same level and type of risk, we will consume resources where they are least needed and leave blind spots where they matter most. Precise, proportionate, risk-based legislation can better protect business activity. In this area, less can be more, as long as we know where to focus and evaluate what works. The question should not be how many more rules we can pass. It should be whether we are capable of knowing who controls the capital, sharing useful information, following the money, and recovering the proceeds of crime. Organized crime already operates as a network. To confront it, our systems have to learn to work as one. *The author of the column is a partner at Eticolabora and a company director