Search results

1 – 10 of 862
To view the access options for this content please click here
Article
Publication date: 4 January 2008

Jackie Johnson

To gauge the extent to which the global financial system is anti‐money laundering (AML)/countering the financing of terrorism (CFT) prepared by analysing and comparing the…

Downloads
1674

Abstract

Purpose

To gauge the extent to which the global financial system is anti‐money laundering (AML)/countering the financing of terrorism (CFT) prepared by analysing and comparing the AML/CFT systems of Financial Action Task Force (FATF) members with countries belonging to regional AML organisations.

Design/methodology/approach

Mutual evaluation data of 16 FATF members and 21 non‐FATF countries is analysed and compared using Kruskal‐Wallis and paired‐t tests to determine similarities and differences across the two groups of countries.

Findings

AML/CFT systems of FATF members and non‐FATF countries are poor. The lack of compliance with global AML/CFT standards leaves so many holes in these countries' regulatory, financial, and legal systems that money laundering with or without any relationship to the financing of terrorism, would be relatively easy to achieve.

Research limitations/implications

In using an analytical approach it has been necessary to put numerical values on compliance levels used by the FATF. Given that these are very broad, substituting a single value for each compliance level will provide only a crude measure of compliance for comparisons to be made. The results should therefore be used as a guide to the ranking and compliance of countries rather than some exact measurement of compliance.

Practical implications

There will need to be follow‐up visits to this round of mutual evaluations to evaluate country responses to their poor assessments.

Originality/value

Publication of mutual evaluations by the FATF and a number of regional bodies has enabled a comparison of AML/CFT systems from countries around the world. Lack of data has not enabled this to be done before.

Details

Journal of Financial Crime, vol. 15 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

To view the access options for this content please click here
Article
Publication date: 10 May 2011

Neil Jensen and Cheong‐Ann Png

This paper aims to examine the extent to which the Financial Action Task Force (FATF) 40+9 Recommendations have been implemented by developing countries from the…

Downloads
1761

Abstract

Purpose

This paper aims to examine the extent to which the Financial Action Task Force (FATF) 40+9 Recommendations have been implemented by developing countries from the Asia‐Pacific region and the issues pertaining to these countries.

Design/methodology/approach

The paper uses the compliance ratings from published reports of assessments/mutual evaluations for these countries between 2004 and 2010 and makes comparisons with the ratings for FATF countries for that period.

Findings

These developing countries have demonstrated positive developments in addressing anti‐money laundering and combating the financing of terrorism (AML/CFT) requirements and having their level of compliance evaluated through the rigorous process of assessment/mutual evaluation. Nonetheless, the general level of compliance is quite limited, not least when compared with FATF countries. This may be due to complexities of the FATF 40+9 Recommendations, challenges in prioritizing AML/CFT development amidst other national priorities and general limited capacity in these countries. An appreciation of the challenges faced by these countries is essential in the formulation and implementation of AML/CFT measures for these countries.

Originality/value

This paper considers implementation of international standards for AML/CFT from the perspective of developing countries, which is an important contribution given the needs and peculiarities of these countries.

Details

Journal of Money Laundering Control, vol. 14 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

To view the access options for this content please click here
Article
Publication date: 28 June 2021

Firas Murrar

This study aims to define how countries can implement a risk-based approach (RBA) for non-profit organisations (NPOs) by measuring how well certain countries have complied…

Abstract

Purpose

This study aims to define how countries can implement a risk-based approach (RBA) for non-profit organisations (NPOs) by measuring how well certain countries have complied with the Financial Action Task Force’s (FATF) “Recommendation 8, criterion 1” (recommendation [8.1]).

Design/methodology/approach

This study combines a comparative analysis methodology with a descriptive analytical approach to compare three member countries of FATF and FATF-Style Regional Bodies (FSRBs). It uses secondary data sources, namely, FATF guidelines on the subject and FATF reports on mutual evaluation reports.

Findings

This study examines the variations in compliance with the FATF recommendation (8.1) among three countries recently assessed by the FATF: the UK, Bahrain and the Russian Federation. Although the UK has completely fulfilled these recommendations, Bahrain and Russia have largely fulfilled them. These variations in compliance are mainly attributed to the uneven level of preparedness in the countries’ commitment to the legislative requirements before the process of mutual evaluation.

Originality/value

This paper offers insight into the progress of legislation and mechanisms (technical compliance) in the three countries with respect to recommendation (8.1). This paper also discusses the evolution of implementing and adopting the RBA among NPOs. This paper concludes with suggestions to other countries in developing a plan that meets the FATF recommendations by considering key factors such as comprehensive assessment of threats to NPOs, periodic reassessment and sharing of success stories.

Details

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

Keywords

To view the access options for this content please click here
Article
Publication date: 12 February 2021

Aisha Hassan Al-Emadi

This paper aims to study the effectiveness of the implementation of the Financial Action Task Force (FATF) recommendations in the UK in an attempt to combat the laundering…

Abstract

Purpose

This paper aims to study the effectiveness of the implementation of the Financial Action Task Force (FATF) recommendations in the UK in an attempt to combat the laundering of proceeds of corruption.

Design/methodology/approach

A desk review of secondary resources was conducted to analyze available literature to examine the research topic.

Findings

The leakage of 11.5 million documents, known as the Panama papers, has revealed that the UK functioned as a safe haven for illicit and corrupt money. In an attempt to address this, the country called for a public registry of beneficial owners to disclose the identities of the owners of the incorporated corporations and to extend them to individuals abroad holding UK property. The FATF report recognizes the UK’s far-reaching regulation. Despite the measures taken, UK still faces serious risks with regard to the laundering of criminal proceeds, which demonstrates that technical compliance with FATF rules is not enough to effectively curb money laundering.

Originality/value

This study suggests that FATF rules’ effectiveness in identifying instances of laundering the proceeds of corruption is limited because of the deeply rooted system vulnerabilities and the rapid changes in money laundering trends.

Details

Journal of Money Laundering Control, vol. 24 no. 4
Type: Research Article
ISSN: 1368-5201

Keywords

To view the access options for this content please click here
Article
Publication date: 7 July 2020

Georgios Pavlidis

To critically examine two significant developments for the regulation and supervision of virtual assets and virtual assets services providers: the amendment of the…

Abstract

Purpose

To critically examine two significant developments for the regulation and supervision of virtual assets and virtual assets services providers: the amendment of the Financial Action Task Force (FATF) Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019. We argue that new FATF standards constitute an appropriate response to money laundering and terrorist financing risks associated with virtual assets, but that they must be followed by firm, consistent and effective implementation at the national level.

Design/methodology/approach

This paper draws on reports, legislation, legal scholarship and other open source data in order to examine the new FATF standards on virtual assets.

Findings

The amendment of the FATF Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019 have been necessary and opportune to forge a global approach to mitigate money laundering risks associated with crypto-assets. The new FATF standards on crypto-asset activities need to be implemented firmly, effectively and consistency to reduce the risk of jurisdiction-shopping by money launderers and terrorism financiers.

Originality/value

This is one of the first studies examining two important and recent FATF initiatives, the amendment of the FATF Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019.

To view the access options for this content please click here
Article
Publication date: 5 June 2020

Doron Goldbarsht and Hannah Harris

This paper aims to explore the case of counter-terrorist financing (CTF) within the transnational regulatory network (TRN) of the Financial Action Task Force (FATF). The…

Abstract

Purpose

This paper aims to explore the case of counter-terrorist financing (CTF) within the transnational regulatory network (TRN) of the Financial Action Task Force (FATF). The paper demonstrates how the structure and operation of the FATF reflect those of a TRN and shows how the FATF has been successful in securing formal compliance with CTF policies.

Design/methodology/approach

The paper stresses that formal compliance does not guarantee actual compliance or effective enforcement. It is argued that the FATF and the CTF regime must balance concerns for legitimacy with those of flexibility and efficiency. Traditionally, TRNs have focused on flexibility, efficiency and informal cooperation over legitimacy. This paper demonstrates that legitimacy concerns cannot be ignored.

Findings

A lack of legitimacy may ultimately result in non-compliance and ineffectiveness. On this basis, current efforts to build legitimacy through the FATF are noted but deemed insufficient. If this balance is not struck, the FATF may be doomed to failure through an overreliance on coercive methods. Particularly in the case of CTF, coercion is insufficient for meaningful compliance. Global enforcement by diverse states is a necessary condition for the success of the regime.

Originality/value

This paper will fill the gaps existing in the literature by examining CTF, as well as the FATF as an example of TRN. This approach differs from other literature in the field, which deals solely with the effectiveness of the FATF and the global CTF without considering the effect of legitimacy on compliance.

Details

Journal of Financial Crime, vol. 27 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

To view the access options for this content please click here
Article
Publication date: 13 June 2020

Firas Murrar and Khaled Barakat

This study aims to define the role of the Financial Action Task Force (FATF) and its Style Regional Bodies (FSRBs) that combat money laundering (ML) and terrorist…

Abstract

Purpose

This study aims to define the role of the Financial Action Task Force (FATF) and its Style Regional Bodies (FSRBs) that combat money laundering (ML) and terrorist financing (TF) by measuring how well some Arab countries have complied with FATF’s “Forty Recommendations” with respect to the regulatory framework.

Design/methodology/approach

This study combines the comparative analysis methodology with a descriptive analytical approach to compare three member countries of the Middle East and North Africa Financial Action Task Force (MENAFATF). It uses secondary data sources, namely, theoretical literature on the subject and FATF reports on mutual evaluation reports (MERs).

Findings

This study examined the variations in compliance with FATF standards among three member countries of MENAFATF: Bahrain, Morocco and Jordan. While Bahrain has almost completely fulfilled these standards, Morocco and Jordan have only partially fulfilled them. These variations in compliance are mainly attributed to the uneven level of readiness in the countries’ commitment to the legislative and regulatory requirements before the process of mutual evaluation.

Originality/value

Researchers can find several studies on the role of FATF and FSRBs in combating ML and TF. However, no studies have focussed on the application levels of FATF standards, which are relevant to the regulatory frameworks of member countries. This study makes a unique and vital contribution, as it demonstrates the effectiveness of applying the FATF standards.

Details

Journal of Money Laundering Control, vol. 24 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

To view the access options for this content please click here
Article
Publication date: 31 August 2020

Nankpan Moses Nanyun and Alireza Nasiri

This paper aims to examine the extent of successes and challenges of adoption and implementation of Financial Action Task Force (FATF) codes in member states by…

Abstract

Purpose

This paper aims to examine the extent of successes and challenges of adoption and implementation of Financial Action Task Force (FATF) codes in member states by highlighting the influence of the FATF anti-money laundering policy framework on money laundering (ML) and the way forward in heightening the fight against the fast-evolving nature of ML and terrorist financing activities.

Design/methodology/approach

This paper, based on a purely qualitative desktop study, is drawn on historical information from FATF’s recommendations, its periodic reports, publications and other secondary sources such as books, journal articles on financial systems and scholarly literature.

Findings

The challenges found include difficulty in domestic coordination, capacity constraints of countries, inadequate operational resources and assessment complexities in the implementation of FATF standards. Nonetheless, FATF has chalked some successes such as the harmonization of legislation and enforcement efforts through the provision of coordination points. Other successes include flexibility in response to new threats, adoption of the mutual evaluation process, which advanced peer pressure on defaulting members, enhancement of the international financial space and the enhancement of the legitimization of FATF’s processes.

Originality/value

This paper provides a description of the successes and challenges of the FATF’s 40 + 9 recommendations since its establishment. The outcome would alert countries and players within the international financial space to invest more in capacity building and the entrenchment of the recommendations into their domestic laws.

Details

Journal of Money Laundering Control, vol. 24 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

To view the access options for this content please click here
Article
Publication date: 20 January 2020

Georgios Pavlidis

Thirty years after its creation, the Financial Action Task Force (FATF) has become a prime example of a norm-building process that transcends the traditional avenues of…

Abstract

Purpose

Thirty years after its creation, the Financial Action Task Force (FATF) has become a prime example of a norm-building process that transcends the traditional avenues of public international law, while compelling a high level of compliance and assuring quick adaptation to norms and practices that better address money laundering and the financing of terrorism in their evolving form. On the occasion of FATF’s 30th anniversary, this paper aims to revisit the unique characteristics of FATF and the factors behind FATF’s success as standard-setter and as implementation-reviewer in the anti-money laundering (AML)/CFT context.

Design/methodology/approach

This paper draws on primary sources of law, legal scholarship, reports and other open source data to analyse the FATF norm-building process and the factors behind its success.

Findings

Thirty years after its creation, the FATF has established itself as the key standard-setter, implementation-reviewer and force for reform in the AML/CFT context. Though the FATF norm-building process has been very successful, owing to its flexibility, adaptability and expansiveness, significant challenges lay ahead due to the evolving nature of money laundering and financing of terrorism.

Originality/value

This is a comprehensive study examining the achievements, impact, strengths and weaknesses of the FATF norm-building process on the occasion of the organisation’s 30th anniversary.

Details

Journal of Financial Crime, vol. 28 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

To view the access options for this content please click here
Article
Publication date: 11 October 2011

Louis de Koker

The purpose of this paper is to identify key questions that should be addressed to enable the Financial Action Task Force (FATF) to provide guidance regarding the…

Downloads
5165

Abstract

Purpose

The purpose of this paper is to identify key questions that should be addressed to enable the Financial Action Task Force (FATF) to provide guidance regarding the alignment of anti‐money laundering, combating of financing of terror and financial inclusion objectives.

Design/methodology/approach

The paper draws on relevant research and documents of the FATF to identify questions that are relevant to consider when it formulates guidance regarding the alignment between financial integrity and financial inclusion objectives.

Findings

The FATF advises that its risk‐based approach enables countries and institutions to further financial inclusion. It is, however, not clear what the FATF means when its uses the terms “risk” and “low risk”. It is also unclear whether current proposals for financial inclusion regulatory models will necessarily limit money laundering as well as terror financing risks to levels that can be described as “low”. The FATF will need to clarify its own thinking regarding low money laundering and low terror financing risk before it will be able to provide clear guidance to national regulators and financial institutions.

Originality/value

This paper was drafted to inform current FATF discussions regarding guidance on financial inclusion. The questions are relevant to all stakeholders in financial regulation.

Details

Journal of Financial Crime, vol. 18 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

1 – 10 of 862