FIFA – highlighting the links between global banking and international money laundering
Abstract
Purpose
This paper uses the recent (August 2015) FIFA arrests to provide an example of how illicit financial flows are occurring through the formal banking and financial services sector. The purpose of this paper is to explore which elements of anti-money laundering (AML) compliance need to be addressed to strengthen the banking response and reduce the impact of IFFs within the banking sector.
Design/methodology/approach
The paper is based on the indictment document currently prepared for the FIFA arrests and the District Court case of Chuck Blazer the FIFA Whistleblower. It uses the banking examples identified in the indictment as typologies of money laundering and wire fraud. Corresponding industry reports on AML compliance are included to determine where the major weaknesses and gaps are across the financial service.
Findings
The main findings from the analysis are that banks still have weak areas within AML compliance. Even recognised red flag areas such as off shore havens, large wire transfers and front companies are still being used. The largest gaps still appear to be due diligence and beneficial ownership information.
Research limitations/implications
The research topic is very new and emerging topic; therefore, analysis papers and other academic writing on this topic are limited.
Practical implications
The research paper has identified a number of implications for the banking sector, addressing AML deficiencies, especially the need to consider the source of funds and the need for further enhanced due diligence systems for politically exposed and influential people and the importance of beneficial ownership information.
Social implications
This paper has implications for the international development and the global banking sector. It will also influence approaches to AML regulation, risk assessment and audit within the broader financial services sector.
Originality/value
The originality of this paper is the link between the emerging issues associated with allegations of bribery and corruption within FIFA and the illicit financial flow implications across the banking sector.
Keywords
Acknowledgements
Please note that this paper was composed and submitted for review to this journal in August 2015 – a time at which the author was working on his second doctorate level research project titled “Trade Based Money Laundering: Exploring the Implications for International Banks”. All the content within this paper was current at the time of submission (August 2015). The banking, legal and regulation industries have evolved since then, with new material from academic research also emerging. These points need to be taken into consideration when reading this paper.
The author acknowledges being the recipient of a research grant awarded by Princess Ālae as part of Seven Foundation’s “2020 Banking Vision – building banks of the future” and he thanks her for the continued support and motivation both to himself and other students who benefit through her generosity (www.sevenfoundation.ch).
The author also thanks Professor Muhammad Jumàh (a leading economist of this era based in Damascus) who has continued to provide valuable input both through his teaching of the science of economics and for his continued guidance.
Citation
Naheem, M.A. (2018), "FIFA – highlighting the links between global banking and international money laundering", Journal of Money Laundering Control, Vol. 21 No. 4, pp. 498-512. https://doi.org/10.1108/JMLC-08-2015-0037
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited