In the fifth instalment of Patrick’s ongoing analysis, he turns to the notion of suspicious activity reporting, examining how doubt is transformed into moral judgement and how private economic actors are increasingly enlisted to exercise powers once reserved for the state...

Reporting Suspicious Activity

1) The concept of “suspicious activity reporting”

From doubt to suspicion.

Suspicion, definition. Larousse: “An opinion that attributes reprehensible acts or intentions to someone. It is the act of suspecting something, an idea that one forms, a premonition, in short.“

Suspicion is not doubt, and the first suspicion of a retailer, subject to VAT in this case, is whether they will be paid by their customer. At best, they suspect them of being indecisive and wasting their time; at worst, of being a bad payer. And since time is money, he will naturally suspect his customer of causing him to lose money.

So before reporting a suspicion about the origin of his customer’s capital to the financial authorities, he will first and foremost declare himself suspicious of his customer for reasons that are diametrically opposed to the latter’s criminal behaviour, at least that is not his primary concern.

But how can one be reasonably suspicious, i.e. consider that one’s future client who walks through the door of one’s shop, office, our office, has reprehensible intentions in wanting to purchase the service, or the movable or immovable property that we offer or sell, beyond the very purpose of our existence, our status as a trader, and what we sell, whether products or services?

This is an unnatural feeling, whether you are a trader or not.

As for doubt, it is a state of mind that is uncertain about the reality of a fact, the truth of words, or the course of action to take in a given circumstance. It is a judgement by which we doubt something, but there is no moral involved. As Bergson said, “it is good to lie down in the shade of doubt“, and Newton would not contradict him.

Thus, doubt is to suspicion what fragility is to weakness. The former does not appeal to morality, while the latter implies a judgement that is moral in nature.

In the case described in the introduction, the police could not have had any doubt, as my client had presented himself transparently, nor could they have had any suspicion based on the same reasoning.

It was only under pressure from Moneyval’s grey, black, or white lists that the police acted so swiftly, making a moral judgement above all else. However, we cannot blame the police for doing their job, but certainly not that of a shopkeeper.

2) The philosophical implications of its implementation

Just like the “baby on board” sticker, there was a precedent. The kilo of rice programme of December 1992, which all children in France and Navarre were familiar with. Purchased by their parents, the little angels had to bring 1kg of rice to school, at the instigation of Bernard Kouchner, then Minister of Health in the French government at the time, to help combat famine in Somalia.

Or how to create and maintain a sense of guilt in the minds of parents, but above all in children, in a place that has nothing to do with education, but only with teaching.

The philosophical implication of a Declaration of “suspicion” with regard to the very definition of suspicion is part of the same approach.

To instil a sense of guilt in the minds of everyone who does not act on what the state has suggested, invited or imposed on them to do.

3) The technical implications of its implementation.

Training courses galore and software of all kinds.

For reasons of discretion, noblesse oblige, no names of training companies or software on the market are disclosed. But in these modern times, subjects are not alone; training organisations and software are at their disposal to excel in reporting suspicions.

Software X; Anti-money laundering software with transaction monitoring, fraud detection and regulatory compliance features, Software Y, KYC/KYS solution Software Z, Software A, Software B to optimise financial fraud detection, Software R; Software that offers effective alert management, advanced reporting and enhanced compliance to combat money laundering, etc.

A new market has just been born, where everyone will find something to their liking, especially computer scientists. The best job of the 20th century, and this is only the beginning.

Taking this reasoning even further, when will we see a university with a chair in “Anti-Money Laundering”, where Al Capones and Eliot Ness come to explain how it’s done, and Josh Randall sit in the lecture theatre wondering, “This training is all well and good, but what’s in it for me?”

At the beginning of AML/CFT , there is money. And money is primarily a banker’s business. If the banker carries out upstream checks, using all the software at their disposal and their team of compliance officers, then, as a result of their extensive due diligence, the customer issues a cheque or a transfer. In what way would a subject trader, insurer, estate agent or notary have to carry out further due diligence downstream, beyond what has already been done by the banker?

Thus, with the exception of cash, all fiduciary, dematerialised transactions originate, if not under the authority of a bank, from the issuance of a scriptural security or a dematerialised transaction, especially since banks have a regulatory and technical monopoly in this area.

Thus, this cascade of diligence, controls and software that subjects, other than bankers, must equip themselves with, all these almost imposed training courses, are not really understandable, except as an activity that is added to another, a form of parasite of capitalism.

In the simple definition of capitalism, most beautifully expressed by Henry Ford as “producing and selling, above all to my workers“, marketing was certainly the first parasite. Today, with hindsight, marketing, why not? Ferdinand Porsche expressed it most beautifully: “On Sundays I race, on Mondays I sell“.

But through a battalion of subject merchants, inspectors or controllers by destination, becoming the secular arm of lazy states, we forget the simplicity of each person’s role, because everyone must stay in their own field, otherwise the cows will not be well guarded.

To summarise the technical implications of implementing the controls imposed on subjects, it is primarily a matter for states supporting their government agencies and bankers, whether state or private.

This transfer of sovereign power to private economic actors described as Assujetti-subject, raises questions.

The legal and existential implications of not implementing a Suspicious Transaction Report.

As a reminder, “A piece of jewellery in Monaco may be used tomorrow in a drug transaction. In such a case, it is the jeweller who will be sought out. But if the jeweller has complied with the rules, he will be protected.“

Failure by a regulated entity to implement due diligence measures results in a fine.

The only known fines have been imposed on banks, which seems logical (see above), and last June in France, the ACPR imposed a fine of €600,000 on a banking institution for “failures” in its AML/CFT system.

Originally, it was jewellery, a car, movable or immovable property, advice paid for with money from drug trafficking, etc., that would make these professionals liable if they did not comply with the rules.

So unlike Josh Randall, who will be rewarded with a bonus after bringing the criminal to the authorities, dead or alive, and unlike Eliott Ness, who will be rewarded with fame, the subject will be fined for not being able to read “Wanted” on the forehead of his prospect or client, and even if “Wanted” had been written on his forehead, no reward was written below it.

This illustrates the double penalty of these strange “modern times”, where if the subject does not say “In the name of the law” as soon as a client walks through the door, he will be fined.

Patrick LAURE
Secrétaire Particulier
+33 6 35 45 27 02
laurepatrick@wanadoo.fr

**The information provided in this article is for general informational purposes only and does not constitute legal advice. It is not intended to create an attorney-client relationship. Laws and regulations vary by jurisdiction and may change over time. Readers should consult a qualified legal professional for advice specific to their situation. The author and publisher are not responsible for any actions taken based on this information.