[Dave Birch] I may have mentioned once or twice that I think there is a moral element to the discussion about cash replacement and the need for national strategy to reduce the amount of cash in use. As a rhetorical flourish, I’ll normally say something along the lines of “who wants to keep cash, other than criminals” or similar. Now, obviously, it’s not the case that everyone using cash is a criminal, although there does seem to be at least prima facie evidence linking larger quantities of cash with various kinds of illegality. The latest Italian figures make for typical reading…

The “Yellow Flame” financial police seized 41 million euros’ ($50 million) worth compared with 23.2 million euros in the same period last year, they said in a statement. In addition to large quantities of cash and treasury bills, they seized 88 kilograms of gold and 570 kilos of silver, the statement said.

[From Italian border police seize record amounts of gold, cash | ArabNews]

Unsurprising, given the apparently low level of taxpaying in Italy and the new administration’s attempts crackdown on tax evasion, cash smuggling is on the rise. There were a couple of things that I loved about this story. The first was that the Italian police have a cool name for their cash-hounds (the “Yellow Flame”!) and the second was that they are using actual hounds to track down the wobbly wonga.

Dogs trained to detect the scent of money played their part. A Labrador named Tango nabbed a Sri Lankan at a Milan airport with 424,000 euros in a suitcase bulging with clothing, while his brother Cash sniffed out a pensioner trying to spirit out 242,000 euros. One Chinese entrepreneur was caught at Rome’s Fiumicino airport trying to smuggle out 200,000 euros hidden in 400 cartons of cigarettes — one 500 euro note in each. In another case, an Italian with business in Ethiopia was caught with 122,000 euros in the false bottom of a suitcase.

[From Italian border police seize record amounts of gold, cash | ArabNews]

Tango and Cash yuk yuk. Yet more incontrovertible evidence that €100, €200 and especially €500 euro notes are a curse, and that if the European Central Bank (ECB) keeps on printing them then it should be prosecuted under conspiracy laws. Why national governments allow this to continue I’ve got no idea. Banning the notes would not, I’ll admit, end tax evasion and racketeering, but it would at least raise the cost of it, which you’d think would be our government’s strategy toward payments, if the government had a strategy, which it doesn’t.

Given the high density of euro notes, I’m puzzled as to why money launderers and tax evaders and drug dealers would ever use anything else, but apparently some people think the euro collapse is imminent and that only bullion will do. If you’re worried about your euros becoming worthless, then what do you put under the bed? It’s the old favourite.

Another businessman was stopped at the Swiss border traveling with his daughter with 50 kilos of gold hidden under a carseat.

[From Italian border police seize record amounts of gold, cash | ArabNews]

By my calculation, 50 Kg of gold is worth about as much as four cornflakes boxes full of euros, so why take the risk? Why add all that weight?

Eftychia Symeonidoy stood outside a London apartment, casually holding the box under her arm.
But instead of it containing the recommended daily amount of vitamins and minerals, it had been stuffed with 300,000 euros.

[From BBC News – 500 euro note – why criminals love it so]

And then I began to wonder: are there sniffer dogs for gold? Gold is famously unreactive and my distant O-Level chemistry led me to think that this might make it hard to smell. And then began to think that if there were sniffer dogs that could find gold, then surely I would have seen them in movies about the Gold Rush and such like. Why would treasure hunters used metal detectors instead of cocker spaniels? If I’m wrong about this — and a quick bit of googling suggests that I’m not — please do let me know. Anyway, perhaps that’s the key. The forces of law and order, despite the draconian laws on money laundering, have to rely on the K9 corps to actually find any of the bent cash so maybe the criminals figure that it’s better to take gold (even though it’s bulkier) because Tango and Cash can’t find it. It looks as if you’ve got no chance of getting euro notes past them!

Within minutes of being deployed at Milan’s Malpensa airport this week, Robbie the cocker spaniel pointed his handler towards an Italian man who was found to have US$40,000 (£27,000) in his suitcase. A few hours later, the British-trained dog notched up his second success, identifying an Albanian man who had 46,000 euros (£40,000) in 500 euro notes stuffed down his underpants.

[From British sniffer dogs help Italian fraud squad sniff out cash – Telegraph]

Hold on. That sounds like another TeamGB Olympic-style success story! The sniffer dogs are Brits! Rather than bomb dogs, these are dogs that are the bomb.

Last December a single cocker spaniel found around a quarter of a million dollars worth of nefarious cash at Milan’s airport over just a two-day span.

[From Dogs search for cash, cows in heat, whales – CNN]

Woo hoo! Team GB! This could be a terrific export market for us. We are a nation of dog lovers and must have a pool of qualified dog trainers to draw on, so with a bit of organisation we could turns this into a serious business. I wonder what the global market is like? Governments everywhere are presumably keen to raise their tax take so they’d be after a few of these dogs.

The Argentine tax agency is deploying 300 specially trained golden retrievers and labradors to sniff out undeclared dollars, reports La Nacion.

[From Argentina deploys cash-sniffing dogs | GlobalPost]

So the export market could be huge! 300 just for Argentina! Ah, but wait. Is Argentina representative?

The report notes Argentina’s failure to comply with 46 of 49 Financial Action Task Force (FATF) Recommendations, and the lack of judicial processes against money laundering. In the last two years there have been only two convictions for money laundering, and five prosecutions are ongoing.

[From US Downgrades Argentina Over Money Laundering]

So probably not. Nevertheless, I’m going to add to my response to the Treasury consultation on the future of the Payments Council by suggesting that the proposed Payment Strategy Board be tasked with creating army of specially-trained sniffer dogs be deputised to HMRC and dispatched to building sites around the country immediately.

These are personal opinions and should not be misunderstood as representing the opinions of 
Consult Hyperion or any of its clients or suppliers


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