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1 – 10 of 103
Article
Publication date: 9 July 2018

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.

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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

Journal of Financial Regulation and Compliance, vol. 26 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 20 April 2020

Asanga Abeyagoonasekera

The purpose of this paper will attempt to depict the importance of meaningful co-operation in preventing and interdicting economically motivated crime and misconduct in Sri Lanka…

Abstract

Purpose

The purpose of this paper will attempt to depict the importance of meaningful co-operation in preventing and interdicting economically motivated crime and misconduct in Sri Lanka while exploring the challenges faced by the state, its bureaucracy, extremist threat, war on drugs and anti-money laundering/countering the financing of terrorism (AML/CFT) mechanisms.

Design/methodology/approach

Qualitative and secondary data.

Findings

While mechanisms to introduce legislation and implement the national actions plan on combating bribery and corruption will add significant value to the entire system, Sri Lanka will need to improve co-operation among domestic and international agencies to overcome the challenges. For domestic co-operation educating the bureaucracy is essential in this regard who would take a central role in advising the policymakers.

Originality/value

Sri Lankan perspective has not been discussed on challenges faced by the state, its bureaucracy, extremist threat, war on drugs and AML/CFT mechanisms. Paper was presented at the Cambridge International Symposium on Economic Crime 2019.

Details

Journal of Financial Crime, vol. 28 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 1 January 2012

Angela Samantha Maitland Irwin, Kim‐Kwang Raymond Choo and Lin Liu

The purpose of this paper is to measure the size of the money laundering and terrorism financing problem, identify threats and trends, the techniques employed and the amount of…

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Abstract

Purpose

The purpose of this paper is to measure the size of the money laundering and terrorism financing problem, identify threats and trends, the techniques employed and the amount of funds involved to determine whether the information obtained about money laundering and terrorism financing in real‐world environments can be transferred to virtual environments such as Second Life and World of Warcraft.

Design/methodology/approach

Analysis of 184 Typologies obtained from a number of anti‐money laundering and counter‐terrorism financing (AML/CTF) bodies to: determine whether trends and/or patterns can be identified in the different phases of money laundering or terrorism financing, namely, the placement, layering and integration phases; and to establish whether trends and/or behaviours are ubiquitous to a particular money laundering or terrorism financing Type.

Findings

Money launderers and terrorism financers appeared to have slightly different preferences for the placement, layering and integration techniques. The more techniques that are used, the more cash can be successfully laundered or concealed. Although terrorism financers use similar channels to money launderers, they do not utilise as many of the placement, layering and integration techniques. Rather, they prefer to use a few techniques which maintain high levels of anonymity and appear innocuous. The sums of monies involved in money laundering and terrorism financing vary significantly. For example, the average maximum sum involved in money laundering cases was AUD 68.5M, as compared to AUD 4.8 for terrorism financing cases.

Originality/value

This paper provides some insight into the relationship between predicate offence, the predominant techniques utilised in carrying out that offence and the sums of money involved.

Details

Journal of Money Laundering Control, vol. 15 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 20 January 2020

Ehi Eric Esoimeme

The purpose of this paper is to critically examine the anti-money laundering measures of the UK and Nigeria, to determine what the best approach is. The best approach is likely…

Abstract

Purpose

The purpose of this paper is to critically examine the anti-money laundering measures of the UK and Nigeria, to determine what the best approach is. The best approach is likely the one that strikes a fair balance between protecting the financial system against money laundering and promoting financial inclusion.

Design/methodology/approach

This paper relies mainly on primary and secondary data drawn from the public domain. It also relies on documentary research.

Findings

This paper critically analysed the anti-money laundering measures of the UK and Nigeria to determine that the anti-money laundering measures of Nigeria does not strike a fair balance between protecting the financial system against money laundering and promoting financial inclusion because it does not expressly provide for verification of a customer’s identity at the account opening stage for low risk accounts. The paper, however, determined that the anti-money laundering measures of the UK does strike a fair balance between protecting the financial system against money laundering and promoting financial inclusion because it requires customer identification and verification before the establishment of a business relationship for customers who want to open a basic bank account.

Research limitations/implications

This paper focuses on the anti-money laundering and financial inclusion measures in the UK’s Payment Accounts Regulations 2015 and the Central Bank of Nigeria’s (Anti-Money Laundering and Combating the Financing of Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations, 2013.

Originality/value

This paper offers a critical analysis of the anti-money laundering and financial inclusion measures of the UK and Nigeria as provided in the UK’s Payment Accounts Regulations 2015 and the Central Bank of Nigeria’s (Anti-Money Laundering and Combating the Financing of Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations, 2013. The paper will provide recommendations on how the measures could be strengthened. This is the only article to adopt this kind of approach.

Details

Journal of Money Laundering Control, vol. 23 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 8 May 2018

Ronald F. Pol

The purpose of this paper is to advance debate and prompt new strategies substantially to improve the capacity to disrupt serious profit-motivated crime.

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Abstract

Purpose

The purpose of this paper is to advance debate and prompt new strategies substantially to improve the capacity to disrupt serious profit-motivated crime.

Design/methodology/approach

Using interdiction rates (the proportion of criminal funds seized or forfeited) as an interim proxy effectiveness indicator, this article challenges elements of the dominant anti-money laundering/counter-financing of terrorism (AML/CFT) narrative, and reflects on policy effectiveness and outcomes.

Findings

Interdiction rates in jurisdictions surveyed hardly constitute a rounding error in the accounts of profit motivated criminal enterprises. The current AML/CFT model appears almost completely ineffective in disrupting illicit finances and serious crime.

Research limitations/implications

With such research at an early stage, some data are poorly substantiated and methodological inconsistencies rife.

Practical implications

For policy interventions with a reasonable prospect for crime not to pay, beyond rhetoric, frank evaluation of results and a potential step-change in policy, regulatory and enforcement vision and capability, may be required.

Originality/value

Scholars have exposed a paucity of meaningful links between AML/CFT controls and crime and terrorism prevention, yet the dominant narrative persists largely unchecked. This paper examines components of that narrative in the context of scholarship on “bullshit”.

Details

Journal of Financial Crime, vol. 25 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 6 July 2012

Angela Samantha Maitland Irwin, Kim‐Kwang Raymond Choo and Lin Liu

The purpose of this paper is to show how modelling can be used to provide an easy‐to‐follow, visual representation of the important characteristics and aspects of money laundering…

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Abstract

Purpose

The purpose of this paper is to show how modelling can be used to provide an easy‐to‐follow, visual representation of the important characteristics and aspects of money laundering behaviours extracted from real‐world money laundering and terrorism financing typologies.

Design/methodology/approach

In total, 184 typologies were obtained from a number of anti‐money laundering and counter‐terrorism financing (AML/CTF) bodies to determine the common patterns and themes present in the cases involved. Financial flows, transactions and interactions between entities were extracted from each of the typologies and modelled using the Unified Modelling Language (UML) features within Microsoft Visio.

Findings

The paper demonstrates how complex transactional flows and interactions between the different entities involved in a money laundering and terrorism financing case can be shown in an easy‐to‐follow graphical representation, allowing practitioners to more easily and quickly extract the relevant information from the typology, as opposed to reading a full text‐based description. In addition, these models make it easier to discover trends and patterns present within and across Types and allow money laundering and terrorism financing typologies to be updated and published to the wider international AML/CTF community, as and when new trends and behaviours become apparent.

Originality/value

A set of models have been produced that can be extended every time a new scenario, typology or Type arises. These models can be held in a central repository that can be added to and updated by AML/CTF practitioners and can be referred to by practitioners to help them identify whether the case that they are dealing with fits already predefined money laundering and terrorism financing behaviours, or whether a new behaviour has been discovered. These models may also be useful for the development of money laundering and terrorism financing detection tools and the training of new analysts or practitioners. The authors believe that their work goes some way to addressing the current lack of formal methods and techniques for identifying and developing uniform procedures for describing, classifying and sharing new money laundering and terrorism financing with the international AML/CTF community, as and when they happen, in a simple but effective manner.

Article
Publication date: 11 March 2020

Kennedy Otieno Pambo

Kenya has made little progress in its endeavor to categorize lawyers as designated non-financial businesses and professionals (DNFBPs), despite making spirited attempts in 2007…

Abstract

Purpose

Kenya has made little progress in its endeavor to categorize lawyers as designated non-financial businesses and professionals (DNFBPs), despite making spirited attempts in 2007, 2018 and lately in 2019. The legal professionals are, therefore, not bound by the reporting and other stringent obligations imposed by the Financial Action Task Force (FATF) to deter possible misuse by money launderers. The purpose of this paper, therefore, is to enumerate the ongoing efforts toward designating lawyers as DNFBPs in Kenya. The paper also assesses the institutional and legislative incentives (as well as barriers) for imposing the anti-money laundering (AML) duty thereto.

Design/methodology/approach

The paper provides a qualitative review of Kenya’s AML legislative framework and the potential support/hindrance to imposing the AML duty on lawyers. Also, this paper provides a suggestion for possible solutions.

Findings

The legislative framework in Kenya has outlawed money-laundering, and lawyers can be compelled to disclose confidential information observed in the course of employment if it embodies crime or fraud. Thus, imposing the AML obligation on lawyers is nothing out of the ordinary, rather a mere creation for a formal disclosure mechanism. However, this paper also revealed divergent views that merit reconciliation for the seamless designation of lawyers.

Originality/value

To enhance the legislative framework in Kenya, the paper borrows from the FATF’s Interpretive Note to Recommendation 23 and suggests a practical solution to the apparent conflict between the legal professional privilege and the AML duty.

Details

Journal of Money Laundering Control, vol. 23 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 5 January 2015

Hamed Tofangsaz

– This paper aims to examine whether from a factual standpoint, it is sufficiently reasonable to address the suppression of terrorist financing by analogy with money laundering.

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Abstract

Purpose

This paper aims to examine whether from a factual standpoint, it is sufficiently reasonable to address the suppression of terrorist financing by analogy with money laundering.

Design/methodology/approach

The process of terrorist financing will be examined in regard to the funding requirements of terrorists and the methods and tools that terrorists use to raise, move and store their funds. The process of money laundering will be compared with terrorist financing. The role of money laundering in terrorist financing will be discussed. In the core part of this paper, the assumptions justifying the inclusion of anti-money laundering measures to terrorist financing will be challenged.

Findings

What terrorist financing and money laundering share in common is money. However, there are fundamental differences between them with regard to the sources of funds and the direction of financial flows. None of the elements –“accumulation” and “legitimization”– involved in money laundering are necessarily engaged in the process of terrorist financing. This questions the authenticity of the assumptions which underlie the adopted approach. It also requires further investigation on the effectiveness of the integrated counter-terrorist regime, which will not be covered by this paper.

Originality/value

This paper provides a comprehensive introduction for those dealing with the greater question of whether the terrorist financing can and should be tackled by anti-money laundering measures.

Details

Journal of Money Laundering Control, vol. 18 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 3 July 2017

Michael Newbury

The purpose of this paper is to highlight vulnerabilities in Australia’s anti-money laundering/counter-terrorism financing (AML/CTF) regime through Australia’s non-compliance with…

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Abstract

Purpose

The purpose of this paper is to highlight vulnerabilities in Australia’s anti-money laundering/counter-terrorism financing (AML/CTF) regime through Australia’s non-compliance with the Financial Action Task Force (FATF) recommendations on the regulation of designated non-financial businesses and professions (DNFBPs). It is intended that through examination of the justifications for and against AML/CTF regulation of DNFBPs, the paper will provide support for the position that Australia’s AML/CTF regime should incorporate regulation of DNFBPs.

Design/methodology/approach

The paper presents findings from research conducted in 2015 that focused on some of the principal arguments for and against the extension of Australia’s AML/CTF regime to DNFBPs. Review and consideration of the merits of these arguments is undertaken to support the conclusion that AML/CTF regulation should be extended to DNFBPs, in line with the FATF recommendations.

Findings

The current exemption of many DNFBPs from AML/CTF regulation perpetuates vulnerabilities within Australia’s AML/CTF regime; until this is addressed, criminals will continue to exploit these vulnerabilities and the regulated AML/CTF sector will continue to shoulder an unfair burden of Australia’s AML/CTF response.

Practical implications

This paper provides an objective assessment of factors for and against the regulation of DNFBPs in Australia. It may be of value to government policymakers, regulators, financial institutions and DNFBPs.

Originality/value

This paper complements existing research on this subject and provides a specific focus on some of the main arguments for and against the extension of Australia’s AML/CTF regime to specific DNFBPs.

Details

Journal of Money Laundering Control, vol. 20 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 26 June 2021

Mark Rowe

This paper aims to examines the trade-offs that Small Island Developing States (SIDS) must make in navigating an inappropriate elite-driven global anti-money laundering anti-money

Abstract

Purpose

This paper aims to examines the trade-offs that Small Island Developing States (SIDS) must make in navigating an inappropriate elite-driven global anti-money laundering anti-money laundering/countering the financing of terrorism (AML-CFT) order. This paper examines the case of Samoa, an under-researched Pacific Island nation. It is hoped that this paper will have a wider resonance for policymakers from other developing nations facing similar challenges.

Design/methodology/approach

It draws on the latest Samoan domestic source material and Asia/Pacific Group on Money Laundering Mutual Evaluation Reports to highlight the difficult balancing act that SIDS face in complying with complex global norms within their limited regulatory capacity and competing development priorities of financial inclusion and affordable remittance flows.

Findings

Samoa and other SIDS in balancing the existential risks of “blacklisting” with the significant regulatory opportunity costs of compliance undertake an expensive form of AML-CFT window-dressing. Policymakers need to be more sensitive to the needs and regulatory opportunity costs of small jurisdictions, particularly when questions about the effectiveness of the AML-CFT remain open.

Research limitations/implications

The author notes Samoa’s offshore center’s role in raising its risk profile. However, owing to this paper's limited scope offshore center (OFCs) will not be explored in depth. Further research is needed in this area.

Originality/value

There is a dearth of contemporary academic research into AML-CFT regulation in the South Pacific and Samoa specifically. This paper presents through its Samoan case study insights into the cost-benefit calculations that small jurisdictions must make in seeking to comply with elite global AML-CFT norms vis-à-vis competing policy goals such as financial inclusion and ready access to remittance flows.

Details

Journal of Money Laundering Control, vol. 24 no. 3
Type: Research Article
ISSN: 1368-5201

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