I had a strange experience with Google the other day. While trying to pay for some music in the Play Store, an error occurred, which long-story-short was because my wallet had been suspended.
Apparently, Google wanted me to verify my account before use, something they claim (probably correctly) is required by "law" to identify the owner of an account.
Now, since this is something I have not seen before on other providers, I am guessing that Google have become subject to these laws because their wallet is now designed to be much more than just a payment engine, like Google Checkout used to be and more like a Bank Account. Bank Accounts certainly incur requirements for identification (apparently to avoid money laundering?).
Anyway, Google expect me to upload a form of government id (drivers licence, passport etc) and a proof of address. Haha. As if I would upload copies of these documents to an anonymous web server in the cloud owned by a US company. It is one thing to show them to someone at the bank, who at worst photo-copies them and keeps them on file, but am I really going to upload them electronically to the US? Nope, I am not!
This requires some root cause analysis and leads to these anti money-laundering laws. The Money Laundering Regulations 2007 were brought in to address, fundamentally, the worry that money for terrorism was moving through UK banks and that by identifying or preventing this would help reduce terrorism. The government also justified it because it also helps remove organised crime!
I am not an expert on organised crime and terrorism but I am guessing that the criminals are not heavy users of banks and are probably not worried by the regulations too much. They also suppose that the majority of crime is run by a few organised bosses - again something that sounds plausible except that there is still organised crime in this country (and elsewhere) despite the regulations. What the government have done, again, is tried to look like they were doing something useful which has hit the honest people dis-proportionally more than the criminals that they were intended to stop. It presumably means that loads of your financial information is under scrutiny secretly ever day by people looking into various crimes and God-forbid you are a business person who deals with erratic amounts of money and will raise red flags all over the place.
The other big problem is that, I would suggest, most crime us still based on cash. Whether this is tradesmen not paying their tax, drug dealers or theft/robbery, we are talking about a large amount of small amounts, which add up to a vast amount of money but which are still largely undetectable and which no government is really doing anything about. In Germany, if you cannot justify where you obtained a large amount of cash from, it will be seized and you will be investigated. In the UK, you can have £5,000 in small bills hidden in parts of your car and if the police can't prove that it was illegally obtained, you get it back! (I saw this on a TV show!).
The government and police should want people to use electronic systems to move money because it is easier to trace the amounts moving around from source to destination. They should also have an international law that if anyone wants to receive money from UK banks, they must provide law enforcement here with details of where money has gone to if requested.
Stop fixing the wrong problem and adding all this extra red-tape that does nothing to stop crime, if just shifts it to somewhere else and leaves the rest of us having to pick up the pieces!