Battle with Money Laundering, Corruption Goes on After Patriot Act Enactment

Michelle Remo, “Big 4″ observer
October 10, 2011 /

Money laundering, terrorist financing and other Patriot Act-related areas will be the focus of US regulators over the next five years a decade after the USA Patriot Act came into force.

The Patriot Act allows the US Federal Government to seize data and intercept communications from US companies to protect the country from terrorists’ threats.

One-quarter (25.9 percent) of business professionals surveyed during a recent Deloitte webcast think that regulators in the United States will focus most heavily on fraud and corruption schemes such as insider trading and financial fraud (35.4 percent), and bribery and corruption measures in the Foreign Corrupt Practices Act and UK Bribery Act (13.8 percent).

“Since 9/11, the discourse and enforcement activity around money laundering, corruption and fraud has changed,” said Michael Zeldin, global anti-money laundering practice leader for Deloitte.

“What was once a law enforcement effort to curtail drug trafficking has expanded into a national security imperative in which corporate America has an important role to play,” Zeldin added.

Respondents also say the most likely impetuses for the next regulatory changes on corporate fraud, anti-money laundering and corruption would be highly publicized business fraud cases (35.2 percent) and a continued global economic crisis (34 percent).

“A consequence of the economic downturn is reduced funding and resources for corporate compliance,” said David Williams, chief executive officer, Deloitte Financial Advisory Services LLP.

Williams said while there are a lot of CEOs and board members out there saying “let’s try to get away with fewer compliance efforts,” many companies now have compliance risk management programs that are likely not commensurate with their organizational exposures.

“It’s a risky game to play as the global economy continues to struggle,” Williams said.

Among the most significant changes resulting from anti-fraud, anti-money laundering or corruption legislation passed during the last decade are higher corporate compliance costs (47.4 percent) and increased director and officer liability (29.6 percent).

“Countries outside of the U.S. have increased their efforts to crackdown on money laundering, terrorist financing, corruption and related frauds, a byproduct of which is increased sanctions against both organizations and individuals,” added Zeldin.

“Compliance programs found to be lacking have led to increased civil fines and criminal penalties. Even board members have been fined personally for failure to adequately oversee implementation of regulatory remediation orders.”

More than 1,340 business professionals from the consumer and industrial products; financial services; technology, media and telecommunications; defense and other industries responded to the polling questions during the webcast, “Global Fraud and Corruption: A Decade of Change.”


Share your opinion

SEO Powered By SEOPressor