The G8 summit has concluded with a statement promising a coordinated international effort to crack down on money laundering, although history suggests it will take more than promises to address one of organized crimes most insidious facets.

Leaders of the eight countries agreed to a raft of commitments targeting opaque financial arrangements that facilitate money laundering and tax evasion.

Among them were plans to demand greater transparency over the ownership and financial structures of companies, in particular shell companies used to channel funds that may have illicit origins.

The countries committed to pursuing regulations which are “robustly enforced” and backed by “effective, proportionate and dissuasive sanctions.”

Each of the countries will now publish a national action plans providing concrete details of what action it will take to meet the commitments laid out in the statement.

InSight Crime Analysis

Money laundering is a truly international crime facilitated by globalization and trade liberalization so, although none of the G8 countries are Latin American, any action they take to clamp down on laundering will undoubtedly affect the region’s organized crime groups.

The plans themselves are welcome measures to increase standards of accountability and close down the gaping loopholes that for too long countries have been too happy to ignore. However, any optimism should be tempered by realism.

Prosecution of individuals for money laundering remains extremely rare, even in the United States, which has the most resources and expertise at its disposal. The complexity of untangling illegal financial webs means it is often far easier to attack organized crime groups from other angles, and this is unlikely to change even if the new proposals are implemented.

Prosecution of financial institutions is even rarer, and has proved to be an area where governments have consistently placed economic concerns over security. The recent case of HSBC, which saw the bank escape with nothing more than a $1.9 billion fine for ignoring $60 trillion of suspicious financial transactions, is a perfect example of how state rhetoric over tackling financial crimes is rarely backed by action.