Search results

Electronic commerce denotes the use of electronic means, usually the Internet, for creating and often fulfilling contracts without the use of face‐to‐face encounters. In recent years many countries have passed legislation to render to the electronic signature the same significance in contract formation as the traditional hand‐written signature. The general desire is to promote user trust and confidence in the process of authentication in the information age. Leading the charge to transform their traditional business into e‐commerce is the financial services industry, although many other sectors have begun to develop their electronic marketplace with gusto. What this means for money laundering is that wealth may be rapidly moved around the globe and so layering and integration become child's play. Online brokers, bankers and intermediaries of all varieties already accept instructions from clients using traditional user name and password type authentication. But the flawed nature of this type of authentication is rapidly forcing the adoption of public key cryptography with digital signatures and digital certificates. Unless a financial services institution can be absolutely certain about the identity of the online client, it is taking very great risks to accept instructions on their behalf. Recent advances in public key cryptography provide an enabling platform for the secure transaction of business.

As computers and information technology gradually insinuate themselves into every nook and cranny of business operations, management have begun to appreciate some of the risks as well as the benefits. But why are computer systems so vulnerable? There are many reasons why computer systems need to be protected. Computers are so much smaller and more powerful than they were just a few years ago and so much more extensively used as a consequence that the combination of their ubiquity and the importance of the information that they hold is a magnet for accident and malice alike. When we consider that the data that they process often relates directly to money, and in effect is money in many applications, then the attraction is heightened. Converging computing technology with telecommunications has produced real time systems so that there is no longer any delay between the giving of an instruction and its commission. Bank accounts are updated instantly, whether the instructions were bona fide or fraudulent. Even more mouth watering is the opportunity to initiate the process in one country, debit the account in a second country and post the proceeds to an account in yet a third country. Systems are no longer secreted in a whitecoat computer room environment — the terminal on the teller's desk might, with a little tweaking and know‐how, lead into the sanctus sanctorum of the corporate information heartlands, with devastating effects.

Traces how Mexico’s anti‐money laundering regime developed, under international pressure, since 1989; the country is considered one of the top 20 centres of laundered money. Outlines the suspicious transactions reporting system in the form of a diagram, and describes how the Secretariat of Finance and Public Credit now supervises the financial system. Moves on to problems with the legislation; in spite of membership of the Financial Action Task Force and entry into various other agreements, Mexico still has loopholes in its campaign against money laundering, and these centre on the very slow exchange of information at the national and international levels, plus the fact that banking secrecy remains enshrined in the constitution. Suggests a technical information service with online access for processing reports and detecting patterns of laundering activities.

Smart cards are being toted as the secure means of payment for the future. But there are still some security and legal issues to resolve. This article evaluates current security methods for smart cards and briefly reviews existing legislation related to their use.

Gone are the days when a bank could concentrate on providing a reliable service to its customer, and maintain that as part of that service it could guard the confidentiality of all information learnt in the course of the customer's banking. Formerly, a customer could be relatively confident that information about his or her business affairs would not be disclosed save in fairly limited circumstances, and the bank would not trouble itself as to how these affairs were conducted. Current legislation and regulation requires a bank to be aware of the commercial background to its clients' dealings and, in certain circumstances, to take steps to report criminal conduct or to account to third parties.

Enforcement of regulatory controls has traditionally been left to the criminal law. In the last 15 years there has been an increasing interest in using civil remedies for this purpose. Most of the attention has been on financial services, but there have been recent developments in the UK planning system, which provide interesting parallels.

Information is power — so it has been said — and nowhere has this statement been realised more significantly than in the banking industry. IT and banking in the 1990s and going forward to the next millennium are tightly bonded. It is now more difficult to determine whether business drives technology or the other way round. Given this scenario, one of the most important facets of managing IT in a bank is that of information security.

Section 2 of the Criminal Justice Act 1987 abrogates the right to silence since a suspect is required to answer questions in pre‐trial investigations by the SFO, although the answers are inadmissible as evidence unless proceedings are brought under s. 2(14) for giving false information or by s. 2(8), where the individual ‘makes a statement inconsistent with it’. In a previous article, the writer has considered the necessity and effectiveness of s. 2 powers. It is also instructive to analyse the conceptual basis of s. 2 powers since this will aid in the interpretation of statutory ambiguities and will allow the courts to have a uniformity of approach when seeking to resolve the statutory ambiguities. The conceptual basis is also important as concerns the resolution of where the line lies between the effective investigation of offences pursuant to s. 2 and the rights of the individual subject to such questioning. A critical examination of the above issues demands steering a careful course between normative rules and theory: in this area above all others it is impossible and undesirable to divorce one from the other.