Money laundering through exchange offices

Abstract

Purpose

The purpose of this paper is to illustrate how money launderers circumvent compliance measures by using exchange offices to launder incriminated funds.

Design/methodology/approach

The three-step process entailed carrying out unofficial interviews with money launderers, which gave first insight into the issue, followed by expert interviews that were reviewed by means of a qualitative study. The findings of the qualitative study were processed during the subsequent quantitative research.

Findings

Although exchange offices are a known threat to anti-money laundering efforts, they continue to be highly applicable. As exchange offices are responsible for their own compliance measures, compliance officers employed by other institutions do not encounter money laundering through exchange offices regularly.

Research limitations/implications

The findings of the study are limited to the experiences of the interviewed experts, which, naturally, are highly subjective. Further, they are geographically limited, as certain areas were not represented in the study.

Practical implications

During the literature review, a research gap was identified. The present study attempts to partially fill the same. The illustrated findings aimed at facilitating an improvement of anti-money laundering measures. The insights into the minds of money launderers provide valuable information for legislators, compliance officers and authorities.

Originality/value

Presently, the majority of the literature focuses on the issue of money laundering from a compliance perspective. However, accurately understanding how money launderers circumvent the existing prevention measures requires an exploration of their approaches. To effectively inhibit money laundering, it is necessary to gain a holistic overview of the issue, which entails the observation of both perspectives.

Citation

Teichmann, F.M.J. and Falker, M.-C. (2023), "Money laundering through exchange offices", Journal of Money Laundering Control, Vol. 26 No. 3, pp. 445-461. https://doi.org/10.1108/JMLC-07-2019-0059