Search results

This paper aims to evaluate the use of Intelligence gathering, especially the exercise of customer due diligence (CDD), enhanced due diligence (EDD), know your customer (KYC) and recordkeeping as effective anti-money laundering (AML) and counter-terrorism financing (CTF) measures. It re-appraises the risk of breach of privacy associated with recordkeeping of clients’ information in countries where there are no data protection laws and the role of the EGMONT group against the backdrop of the recent suspension of Nigeria from the group; it argues that, in view of other existing liberal punitive measures, suspending a developing nation like Nigeria by the EGMONT group (arising from a rigid demand for an autonomous financial intelligence unit (FIU)) is draconian and counterproductive. Finally, it argues that the fundamental needs and challenges of developing member states of the EGMONT group, particularly members that are battling with weak and non-transparent investigation process and terrorism require, inter alia, technical and manpower assistance to disrupt financial crime and financing of terrorism.

A doctrinal approach is utilised to analyse AML and CTF from the social and historical perspectives. A comparative analysis of international control of money laundering and terrorist financing, appraising the challenges of developing member states in complying with the Financial Action Task Force regulations and the principles of the Egmont group.

There are liberal punitive measures than suspension which the EGMONT group could apply when dealing with developing members of the group, especially on the issue of rigid demand for an autonomy of a national FIU. The fundamental needs and challenges of developing member states of the Egmont group, particularly members that are battling with weak and non-transparent investigation process and terrorism require, inter alia, technical and manpower assistance to disrupt financial crime and financing of terrorism.

The paper queries the appropriateness of the decision to suspend Nigeria by the Egmont group for failure to comply with its policy autonomy of its FIU when there are other liberal disciplinary measures that could have been applied. And, it suggests the need to lay more emphasis on technical assistance for member states to achieve the objectives of the group.

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.

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.

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.

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.

The Egmont Group’s cooperational structure should be the primary means by which to achieve a GFIU.

The global combat on money laundering will be more effective, thereby more fully protecting the global economy.

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.

This paper aims to examine the probable effect of the General Data Protection Regulation of the European Union on the transfer of financial intelligence to a third country without an adequacy decision.

This is an analytical study of the financial intelligence exchange mechanisms between the Bangladesh Financial Intelligence Unit (BFIU) and its foreign counterparts. The research analyses the key challenges this national agency faces in using the Egmont Group membership to import financial intelligence from jurisdictions with a superior data protection regime.

Membership in the Egmont Group of Financial Intelligence Units does not guarantee unrestricted international intelligence exchange. Existing data protection regulations in Bangladesh are inadequate. This may forbid the transfer of the financial intelligence linked to European Union (EU) data subjects to Bangladesh.

This paper does not cover a thorough discussion on any specific alternative tools for data transfer from the EU to a third country except for “appropriate safeguards” options.

The results of this study will help understand the existing legal and institutional limitations that may prevent intelligence exchange between the BFIU and its EU counterparts.

The study helps ascertain the legislative reform necessary in Bangladesh, a third country, to facilitate the transfer of financial intelligence from the EU.

The purpose of this paper is to present a comparative position of Financial Intelligence Units (FIU) in Zambia, Zimbabwe and Malawi and assess their role in combating money laundering.

The study employed a multiple case study research methodology. The units in the three countries are compared using a framework based on the Financial Action Task Force (FATF) recommendations, the International Monetary Fund, the World Bank and Commonwealth guidelines and the Egmont Group guidelines.

The study established that the three countries have made tremendous progress in the fight against money laundering. The units in the three countries have several commonalities and differences. Zimbabwe is left behind in the process of establishing an effective FIU. Malawi is on top with Zambia coming second.

Apart from the common limitations of the multiple case study methodology, the major limitation of this study was the utilization of secondary data in the case of Zimbabwe.

The practical implication of these findings is that policy makers and FIU authorities the world over would be particularly interested in regard to strengthening their units and comparing themselves with international standards.

By focusing on three countries the study has addressed weaknesses usually associated with single country case studies. These findings may be generalized without difficulties. It is envisaged that that research will encourage similar studies in other regions of the world.

This paper consists of two parts, the second of which will be published in the next issue of this Journal (Volume 3, Number 3). The second part of this paper will deal with the legal framework of the European Union.

This study aims to apply the modified Walker-Unger model to show the degree of attractiveness of a country for Mexican-based money launderers to send their illicit funds for the 2000–2015 time period.

The modified Walker-Unger model is used to conduct the analysis, as it combines several independent variables related to an illicit financial activity. These allow the researcher to investigate the attractiveness of a market to money launderers and the possible economic effects of money laundering. In total, 13 categories of indicators were used, namely, gross national product per capita; banking secrecy; government attitude; society for worldwide interbank financial telecommunication membership; financial deposits; conflict; corruption; Egmont group membership; language; trade; culture, colonial background; and physical distance.

Model results suggest the preferred destinations for Mexican-based money launderers from 2000 to 2015 were Bermuda (i.e. from 2000–2004), Canada (i.e. in 2005 and 2006) and Monaco (i.e. from 2007–2015).

Timing and availability of reliable data after 2015.

Aids in continuing to empirically validate the Walker-Unger model. There is little literature on models that quantify money laundering activity.

May aid policymakers in targeting anti-money laundering policy to more relevant countries.

The first empirical investigation that looks to quantify money launderer activity in Mexico. Contributes to the limited literature of quantitative investigations on money laundering.

The purpose of this paper is to provide an overview and discuss the development of the UK and international measures against money laundering.

This paper examines the anti‐money laundering measures and the activities of regulatory and professional bodies both domestically and internationally.

Despite the enormous efforts and co‐operation by the governments, law enforcement agencies, professional bodies and private financial institutions, money laundering and terrorist financing remain as threatening issues. There is also the concern that stricter regulation will only add burden on the financial industry.

This paper examines the development of different measures against money laundering and thereby provides assistance to policy makers in the formulation and implementation of effective anti‐money laundering mechanisms.

This study aims to determine the performance of the Pakistani financial intelligence unit in combating money laundering/terrorist financing in local and global contexts.

The study used a qualitative research design. The objective is achieved by critically examining the Anti-money Laundering Act and its relevant clauses concerning the financial monitoring unit and other related legislation. Further, empirical data was collected through semi-structured interviews with chief compliance officers from regulated entities, regulators and premier law enforcer.

The performance of the financial monitoring unit has severe issues concerning the dissemination of financial intelligence due to its time taking behaviour, non-sharing of feedback with reporting agencies, dearth of international cooperation, lack of trained and relevant personnel and financial constraints.

To the best of the authors’ knowledge, this is a maiden study concerning financial monitoring unit in Pakistan.

Crime is becoming ever more international. This is a world where it is quicker to cross the Atlantic from Paris to New York than to traverse the city of Paris by road. This world is faced with a criminality that profits by the advantages of the so‐called free world, where there are practically no frontiers any more. Whether it is drug trafficking, financial fraud or cyber‐pornography, crime has gone global on a massive scale as borders fade and cash rockets from Grand Cayman to Hong Kong, Luxembourg or Vanuatu in the flash of a second. Criminals know no geographical boundaries; nor does their dirty money recognise any such barriers.

The purpose of this paper is to share research data from the Financial Intelligence sector on trade-based money laundering (TBML), as a way to better inform banking risk assessment and the submission of suspicious activity reports (SARs).

The research data formed part of a bigger project on TBML banking risk assessment for improving the detection of TBML activity. This paper analysed the data from an online survey carried out among the financial intelligence staff from financial intelligence units (FIUs) and some external financial intelligence agencies. The aim was to determine which areas of banking SARs needed to be improved or enhanced to support FIU investigations.

The research found that FIUs do use the data supplied to them, in particular the SARs. The research also found that more data would be appreciated from banks especially in relation to beneficial ownership information and politically exposed persons data. The findings highlighted that contact between banks and FIUs was limited and restricted to a couple of key individuals, whereas the increased requirement for intelligence and more data would suggest that this relationship needs to be expanded and strengthened.

The main limitation was the restricted scope of the survey (only focussed on TBML) and was broad in depth, and perhaps a local FIU survey would be useful to look at specific country recommendations. Similar research also needs to be conducted on other forms of ML activity. The research identified the need for more information on beneficial ownership information; however, other work needs to be done on how exactly banks can access this data.

The main outcome from the research was the need for SARs to contain more detailed information on beneficial ownership and politically exposed persons data. This needs to be incorporated into a specific risk assessment tool for TBML that considers not only the client but also relevant business partners and silent partners/shell companies used by the client. This research is part of a bigger research project that has developed a risk matrix tool for TBML and can be linked into this work.

The paper used original data collected by the researcher from 49 FIU and financial intelligence staff across the globe. The timely presentation of the results and the nature of the sample means that this is relevant and useful data to be presented to the banking sector.