S. Anti-Money Laundering Laws

The United States has long enlisted banks in the country’s efforts to deter and detect crime. Anti-money laundering (AML) laws and related obligations affirmatively require banks and a growing array of other types of “financial institutions” to provide the government with information about possible suspicious activity. These reports and other components of today’s AML regime have proven exceptionally useful for law enforcement and are increasing used to facilitate certain types of sanctions. Nonetheless, first order questions about the efficacy and efficiency of today’s AML regime loom large. The financial industry expends billions of dollars a year to comply, yet leaks reveal that the current regime remains full of holes and available estimate suggests that only a small fraction of all illicit financial flows are actually captured by the AML regime currently in place.

The course will dive into AML laws and the institutions that have grown up around them. We will explore the origins and evolution of AML laws, how they work, how they facilitate law enforcement, how they shape banking and the structure of the regulated financial system, how they have contributed to recent innovations, and the collateral consequences, good and bad, that flow from the regime as it currently exists. The class will feature a number of outside speakers, each of whom will help illuminate a different facet of the current system. All students are expected to regularly attend class and participate in class discussions. Beyond that, students will have the option of writing six short response papers over the course of the semester or submitting two response papers and writing one longer essay.