Search results
1 – 10 of over 9000This paper aims to analyze thoroughly all of the sources of research used to develop the money laundering (ML) and terrorist financing (TF) low-risk rating, a rating attained by…
Abstract
Purpose
This paper aims to analyze thoroughly all of the sources of research used to develop the money laundering (ML) and terrorist financing (TF) low-risk rating, a rating attained by Norway according to the Basel Institute of Governance, and determine the reasons why Norway is one of only two countries in the world according to the 2012 report, with the other being Estonia, to gain an overall low-risk ML and TF rating.
Design/methodology/approach
The differences between the USA and Norway which has obtained a low-risk ranking, were compared and contrasted.
Findings
Beginning with the Basel Institute Rating index as a legitimate source for use in assessing anti-money-laundering (AML)/TF risk, and the amount of documentation used in the index’s methodology, it has been proven that the low-risk rating Norway has received is well deserved, and that the US rating of medium risk is also deserved for the time the report was published. Achieving a low-risk rating is not as ambiguous as recently thought and neither is its application on a global scale.
Originality/value
The paper identifies practical areas of improvement and concerns in addressing the overall issue of ML and terrorist financing.
Details
Keywords
The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and…
Abstract
The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.
Details
Keywords
– This paper aims to investigate the purpose, reach and effectiveness of the customer identification framework of the Financial Action Task Force (FATF).
Abstract
Purpose
This paper aims to investigate the purpose, reach and effectiveness of the customer identification framework of the Financial Action Task Force (FATF).
Design/methodology/approach
The article draws on relevant research and documents of the FATF, the Basel Committee on Banking Supervision and the Alliance for Financial Inclusion to determine whether compliance with the standards and practices of the FATF would prevent anonymous usage of financial services.
Findings
The FATF’s identification principles, guidance and practices resulted in processes that are largely bureaucratic and do not ensure that identity fraud is effectively prevented. Strict identification requirements on the other hand may impact on financial inclusion, leaving the FATF with little leeway to raise its standards. There are potential solutions, but they are longer-term and partial in nature.
Originality/value
Current identification and verification practices affect the lives of millions of people around the globe. The measures are being enforced to ensure that users are appropriately identified. This article informs the debate by highlighting the weaknesses of the current approach.
Details
Keywords
Raja Madihah Raja Alias, Norhashimah Mohd Yasin, Badruddin Hj Ibrahim and Mohd Yazid Zul Kepli
Money laundering and terrorism financing are financial crimes which affect the economic stability and integrity of the country. In this respect, the relevant regulator has a duty…
Abstract
Money laundering and terrorism financing are financial crimes which affect the economic stability and integrity of the country. In this respect, the relevant regulator has a duty to preserve and protect the financial stability of the country. This duty is in line with the concept of the protection of wealth (hifz al-mal) under the maqāsid al-Sharīʿah or higher objectives of Islamic law framework. The objective of this chapter is to examine the protection of wealth vis-á-vis money laundering and terrorism financing from the maqāsid al-Sharīʿah perspective. This study analyses the primary and secondary legal sources on the laws and regulations on anti-money laundering and counter financing of terrorism while also considering the primary and secondary sources of Islamic law. This study is significant as it makes an exploration of the maqāsid al-Sharīʿah perspectives and discusses the position of unlawful wealth that is acquired from the illicit gain of property from the abuse of money laundering and the financing of terrorist activities. This chapter suggests that Islamic law emphasises on the lawful ownership of wealth and prohibits a person from acquiring illicit wealth. This study will contribute towards the study on the deployment of maqāsid al-Sharīʿah, which is beneficial in safeguarding an individual action as well as the country’s commitment against abuse and misuse of wealth for financial crimes.
Details
Keywords
To identify the reason of Japan not complying with the Financial Action Task Force (FATF) recommendation 35 and suggesting a strategic solution to overcoming the barrier.
Abstract
Purpose
To identify the reason of Japan not complying with the Financial Action Task Force (FATF) recommendation 35 and suggesting a strategic solution to overcoming the barrier.
Design/methodology/approach
Through contextual, historical, and legal analysis of the anti-money laundering (AML) measures in Japan.
Findings
This paper implies that less flexible mindsets in stone of major players in the field of AML measures in Japan are the fundamental barrier for Japan not complying with the FATF Recommendation 35, while this paper suggests better realistic ways to address the barrier.
Originality/value
The novel point of this paper is that this paper illustriously uncovers the mindsets of the major players pertaining to the Japanese AML measures in a very illustrative way, points out the underlying true barrier, and describes a useful strategy desperately needed to address the barrier.
Details
Keywords
The purpose of this paper is to explain that the commonly used method allowing for inter-agency cooperation between national financial intelligence units, the memorandum of…
Abstract
Purpose
The purpose of this paper is to explain that the commonly used method allowing for inter-agency cooperation between national financial intelligence units, the memorandum of understanding, is inadequate and ineffective in creating a cooperative global financial intelligence unit capable of combating money laundering typologies on an international scale.
Design/methodology/approach
Methods of international financial intelligence unit (FIU) cooperation have chiefly occurred in two ways: first, through the efforts of the Egmont Group; and second, through the inclusion of provisions concerning FIUs contained in international legal documents. The first is an impossibility.
Findings
This paper proposes that the result of implementation of the 2012 Financial Action Task Force Recommendations will be an informal network of FIUs where the Egmont group acts as a centralized operator for information exchange, effectively creating an informal global FIU (“GFIU”), but that this system, or a cooperative global financial intelligence unit system based on FIU-to-FIU exchanges will not allow for effective multilateral, international cooperation.
Research limitations/implications
This is because national interests and unfamiliarity with capabilities provided in the Egmont Group’s cooperative platform have and will continue to result in under-utilization of cooperative efforts, and because the traditional mechanism employed for FIU-to-FIU exchanges, the memorandum of understanding (“MOU”), makes uniform or standardized information request and transfer procedures that are required for multilateral or multi-agency efforts to combat money laundering across international boundaries an impossibility.
Practical implications
The Egmont Group’s cooperational structure should be the primary means by which to achieve a GFIU.
Social implications
The global combat on money laundering will be more effective, thereby more fully protecting the global economy.
Originality/value
A comparison between the Egmont Group’s network building mechanism and the existing use of MoU to create global cooperation against money laundering has not been analyzed.
Details
Keywords
Emmanuel Senanu Mekpor, Anthony Aboagye and Jonathan Welbeck
This paper aims to compute a measure for anti-money laundering/counter-financing of terrorism (AML/CFT) compliance and investigate its determinants.
Abstract
Purpose
This paper aims to compute a measure for anti-money laundering/counter-financing of terrorism (AML/CFT) compliance and investigate its determinants.
Design/methodology/approach
Using the Financial Action Task Force (FATF) recommendations and assigning weights to them, the study computes a measure for AML compliance. Further, the determinants of AML compliance were investigated using ordinary least squares (OLS) data of 155 countries between 2004 and 2016.
Findings
The findings suggest that AML compliance have slightly improved over the years. Further, the OLS regression results show that technology, regulatory quality, bank concentration, trade openness and financial intelligence center significantly determined and improved AML compliance.
Practical implications
From the findings, it is evident that countries that wish to improve the AML compliance should focus more on technology, regulatory quality, structure of the banking sector, size of the economy and institution of financial intelligence center so as to enhance AML compliance.
Originality/value
To the best of the author’s knowledge, this paper reveals a first AML/CFT compliance index that measures the cross-country level of AML/CFT compliance from the year 2004 to 2016. Subsequently, this paper adopted an OLS econometric model to identify the key determinants of AML/CFT compliance among member states of FATF.
Details
Keywords
Sharifah Nazatul Faiza Syed Mustapha Nazri, Salwa Zolkaflil and Normah Omar
This paper aims to conduct a comparison on the effectiveness of the law enforcement agencies (LEAs) of Australia and Malaysia in investigating money laundering cases by looking…
Abstract
Purpose
This paper aims to conduct a comparison on the effectiveness of the law enforcement agencies (LEAs) of Australia and Malaysia in investigating money laundering cases by looking into the legal system and operational issues faced in conducting the investigation.
Design/methodology/approach
The purpose of this paper is to review and analyze the data collected from the Financial Action Task Force (FATF) Mutual Evaluation Report, focusing on the information outlined in the third chapter. The legal system and operational issues cover the area of technical compliance and effectiveness compliance, which were introduced in the latest FATF Evaluation Methodology issued in 2013.
Findings
The results show that both countries have the power needed to investigate money laundering and terrorism financing under their respective Anti-Money Laundering Act. However, Australia is seen to have a better investigative support system to assist LEAs during the investigation process. This explains the reason for difficulties in increasing the number of prosecutions for money laundering and terrorism financing cases. Hence, improvement actions are needed in curbing this issue.
Practical implications
The result suggests that Malaysia should strengthen the cooperation, coordination and capacity among LEAs to ensure effective targeting, investigation and prosecution of money laundering. The government should also revise the money laundering investigation time frame and broaden the power of LEAs in retrieving information during the investigation process. Malaysia should also enhance the investigative support system, which will be helpful for LEAs in gathering sufficient evidence to support their money laundering charges. Unlimited power in gathering evidence is prominent to charge money launders as it helps to gather information required for prosecution.
Originality/value
Prior literature focuses on the prevention mechanism, where this paper aims to focus on detection and investigation mechanism focusing on money laundering investigation conducted by LEAs. Lack of study on money laundering investigation calls for this research to be done to understand the strengths and weaknesses to improve its effectiveness in the future.
Details
Keywords
Howard Chitimira and Sharon Munedzi
The anti-money laundering (AML) frameworks of many countries were generally influenced by the international best practices of money laundering that were first established in 1988…
Abstract
Purpose
The anti-money laundering (AML) frameworks of many countries were generally influenced by the international best practices of money laundering that were first established in 1988 through the Basel Committee on Banking Supervision (BCBS). The general belief is that these international best practices are applicable in all jurisdictions, although most countries are still affected by money laundering. The international best practices are universal measures that were developed as a yardstick to control and curb money laundering globally. Nonetheless, international best practices for money laundering are not tailor-made for specific jurisdictions and/or countries. Therefore, it remains the duty of respective jurisdictions and/or countries to develop their own context-sensitive AML measures in accordance with international best practices. An overview of the AML international best practices that were developed and adopted by several countries are analysed in this paper. These include customer due diligence measures established by the BCBS, the financial action task force (FATF) standards, as well as the ongoing monitoring and the risk-sensitive approach that were implemented to curb money laundering globally.
Design/methodology/approach
The article analyses the AML international best practices that were developed and adopted by several countries. These include customer due diligence measures established by the BCBS, the FATF standards, as well as the ongoing monitoring and the risk-sensitive approach that were implemented to curb money laundering globally.
Findings
It is hoped that policymakers and other relevant persons will use the recommendations provided in the paper to enhance the curbing of money laundering in financial institutions globally.
Research limitations/implications
The paper does not provide empirical research.
Practical implications
The study is useful to all policymakers, lawyers, law students and regulatory bodies globally.
Social implications
The study seeks to curb money laundering in the economy and society globally.
Originality/value
The study is original research on the use of AML/counter financing of terrorism international best practices to curb money laundering activities globally.
Details