Search results

This paper analyses the international regime of rules, principles and standards designed to reduce the risk of money laundering in the international financial system. The international anti‐money‐laundering regime ranges from a variety of soft law (non‐binding) principles and rules that involve voluntary cooperative arrangements among states that have evolved in recent years, to a more specific legal framework that binds an increasing number of major states. In particular, the Financial Action Task Force (FATF) and its member states have played a crucial role in developing international norms and rules that require financial institutions to adopt minimum levels of transparency and disclosure to prevent financial crime. The FATF has focused its anti‐money‐laundering efforts on financial institutions because of the ease with which criminal groups have used financial institutions to transmit the proceeds of their illicit activities and because of the threat that money laundering poses to the systemic stability of financial systems.

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.

The differences between the USA and Norway which has obtained a low-risk ranking, were compared and contrasted.

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.

The paper identifies practical areas of improvement and concerns in addressing the overall issue of ML and terrorist financing.

Based on an overview of the anti-money laundering initiatives in the sport sector and recent efforts of money launderers focused toward finding alternative channels for money laundering operations, the purpose of this paper is to present the modus operandi of money laundering in the football sector especially.

Specifics of money laundering through the football sector have been analyzed using deductive and inductive methods. This paper provides a review of the existing anti-money laundering initiatives in the sport sector to highlight the specific features of sport that increase money-laundering risks in the football sector. Certain risks have been analyzed and linked to risk areas and money laundering methods as a way of demonstrating established modus operandi.

Analyzed vulnerabilities that arise from the structure, financial characteristics and culture of the football sector represent an increased risk of money laundering in a condition where potential money launderers achieve status of investors, football agents or owners of football clubs and players. Taking some of these roles allows money launderers to enter into transactions related to the acquisition of ownership over football clubs or player transfers. Such types of transactions are particularly exposed to abuse for the purposes of the money laundering process due to their unique features.

Through a wide range of clarified risks and money laundering methods applicable to the football sector, this paper offers a comprehensive review of the existing money laundering threats in the football sector and proposals of prevention.

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.

To outline the role of the Caribbean Financial Action Task Force (CFATF), which has the remit to spearhead the implementation of internationally recognized anti‐money laundering and combating the financing of terrorism (AML/CFT) benchmarks in the Caribbean Basin region.

The first part of the paper sets out the mandate and structure of the CFATF, and describes the range of activities in which it has been engaged, together with some triumphs and challenges experienced over its history. The second part focuses on a critical component of the CFATF's remit, namely, the conduct of the mutual evaluation (MVE) programme, a peer review process by which member states within the CFATF family are assessed for compliance with AML/CFT requirements. The third part constitutes the conclusion and offers some observations on the way forward for the CFATF in its ongoing campaign against financial crime.

The Caribbean Basin region is ad idem with its international partners in the fight against money laundering and the financing of terrorism. Member governments of the CFATF have embraced this commitment because it is in the region's best interests to protect first and foremost the regional financial system from criminal activity and by extension the global financial system. In so doing we are able to position ourselves as well regulated, clean jurisdictions which are firmly committed to adherence to international best practices. The ongoing stance of the CFATF is one of constant vigilance with regard to international developments, their potential impact on members and the Caribbean Basin region and the way in which the region's interests could be best protected.

The task of the CFATF is to ensure that throughout the membership all the domestic stakeholders be it the National Anti Money Laundering Committee, the attorney general's department, the central bank, police, customs, immigration, defence departments, the financial intelligence units (FIUs), the judiciary and the magistracy all must take on the responsibility for ensuring that in the AML/CFT arena a culture of compliance is engendered throughout the national consciousness. The MEV reports on all CFATF members as the outcome of the monitoring for compliance process are now being published on the CFATF web site and will be of value to our international partners and in particular to the global investment community. The Caribbean Basin region through concerted action must strive for a positive and responsible international image and reputation and the publication of this paper is a step in that direction.

This paper aims to investigate the purpose, reach and effectiveness of the customer identification framework of the Financial Action Task Force (FATF).

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.

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.

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.

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.

Through contextual, historical, and legal analysis of the anti-money laundering (AML) measures in Japan.

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.

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.

The purpose of this paper is to determine whether anti‐money laundering measures are capable of providing a solution to the growing problem of public sector corruption in Iraq and, if so, the extent to which changes are required to the current Iraqi AML regime to enhance its effectiveness against such corruption.

This paper will initially explore the growing problem of public sector corruption in Iraq and the measures taken to address such corruption. Subsequently, the corruption‐money laundering relationship and the ability of AML measures based on prevailing international standards to serve as an anti‐corruption tool will be analysed. Finally, the current Iraqi AML regime will be examined to observe whether and to what extent changes are required to enhance its effectiveness against public sector corruption.

Considering the widely acknowledged nexus between corruption and money laundering, a robust AML regime can be effectively utilised by Iraq to combat endemic public sector corruption. This regime must involve a system where financial institutions at their own expense monitor transactions and file suspicious transaction reports with the Iraqi Money Laundering Reporting Office. This, in turn, must identify cases from those suspicious transaction reports that require further investigation by Iraqi anti‐corruption bodies and other law enforcement authorities, who should be empowered to investigate, freeze, seize and confiscate the suspected corrupt proceeds. Such a regime would provide a clear avenue for the obtaining of financial intelligence capable of exposing corruption, thereby addressing the fundamental issue presently encountered by Iraqi anti‐corruption bodies. Amendments are, however, needed to Iraqi anti‐money laundering laws to enhance their effectiveness in combating public sector corruption. Most importantly, financial institutions must be required to apply enhanced customer due diligence measures to domestic politically exposed persons.

This paper is a result of a remote analysis of material published in relation to the subject matter of the paper. Local and regional analysis (e.g. including interviews with the relevant agencies) would be required to confirm the practicality of the propositions made in the paper. Further, the draft version of the revised Iraqi anti‐money laundering law was not examined in an in depth manner due to the uncertainty in its status, including, in particular, whether it has been submitted to the Council of Representatives for approval.

Although the topics of corruption in Iraq, the Iraqi AML regime and the corruption‐money laundering relationship have been the subject of academic analysis, the related topics have not collectively been examined to determine whether, and to what extent, the Iraqi AML regime can address the rapidly growing problem of public sector corruption in Iraq. Accordingly, the findings in this paper will be of interest to Iraqi lawmakers, Iraqi law enforcement agencies, Iraqi financial institutions and investors in Iraq, particularly in the oil and gas industry.

This paper aims to compare the prepaid card laws/regulations in Nigeria, the UK, the USA and India with the aim of determining the best approach to regulating prepaid cards, that is the approach that promotes financial inclusion and also makes the product less attractive for money laundering.

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

This paper makes the following findings and recommendations: Nigeria has the best approach to regulating providers of prepaid cards. Nigeria’s approach could foster financial inclusion and at the same time mitigate the money laundering risks associated with prepaid cards. Nigeria’s approach is not too strict like the Indian approach and it is not too relaxed like the UK and the USA approach. Operators, including mobile/telecommunications operators, wishing to operate money transfer schemes in Nigeria are allowed to do so with approval from the Central Bank of Nigeria and in strict conjunction with licensed deposit-taking banks or financial institutions. The UK, the USA and India are recommended to adopt Nigeria’s approach. The UK and the USA have the best approach to regulating agents of prepaid cards. Both countries require prepaid card providers to maintain a current list of agents and make it available to the relevant authorities upon request. The approach allows regulatory agencies to effectively monitor and supervise prepaid card agents. India and Nigeria are advised to clarify their approach regarding the regulation of prepaid card agents. The prepaid card laws/regulations of those countries should be modified to specify if the agent of a prepaid card provider is required to be licensed or registered by a competent authority or if the prepaid card provider (the principal) is required to maintain an updated list of agents which must be made accessible to a designated competent authority, when requested. The new changes will afford regulatory authorities the opportunity to effectively monitor and supervise prepaid card agents. India’s approach to thresholds would preclude most individuals in the intended target market from accessing basic financial products, as most people typically do not have residential addresses that could be confirmed by reference to formal documentation. India should adopt the “risk-based approach” and not the “wholesale de-risking approach”.

Given their low-risk characteristics, closed-loop cards, specifically cards which do not allow reloads or withdrawals, remain outside the scope of this paper.

Although there have been researchers who adopted the comparative approach like Jean J Luyat and Will Cain, the comparative approach adopted by those researchers was not detailed enough and also was not aimed at seeking to answer the research question in Section 1 of this paper. Both writers focused on only the aspect of financial inclusion making the whole research a one-sided approach. Jean J Luyat focused on “how regulation had an impact on the development of prepaid cards in Japan and Europe”. He was able to discover that prepaid cards were growing rapidly in Japan but not gaining acceptance as a payment method in the European Union (EU) and France. He aligned such growth in Japan to different factors including regulation. He stated that Japan had a simple and flexible regulatory framework compared to the EU and France which have a complex regulatory system with strict prudential requirements. Nothing was said about the money laundering aspect of such regulation and neither was anything said about thresholds and other optional recommendations canvased by the Financial Action Task Force. The Electronic Money Directive referred to by Jean J Luyat has already been repealed and a second Electronic Money Directive is in place. A comparative approach is adopted in this research seeking to compare the approach in Nigeria with that of the UK, the USA and India. Each of these countries adopted different approaches. The results are to help answer the research question in Section 1 of this paper. The countries were selected on the basis of how strict their regulatory regime is. India’s regulatory regime is the strictest while the UK and the USA are the most lenient. Nigeria is caught in between strict/lenient.

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.

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.

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.

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.