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Article
Publication date: 12 November 2020

XiaoTong Loh

Against a backdrop of money laundering scandals in the banking industry, this study aims to assess anti-money laundering (AML) reporting obligations of bankers in the UK. By…

Abstract

Purpose

Against a backdrop of money laundering scandals in the banking industry, this study aims to assess anti-money laundering (AML) reporting obligations of bankers in the UK. By evaluating the effectiveness of the current suspicious activity report (SAR) regime, this study seeks to use the senior management functions of the Senior Managers and Certification Regime (SMCR) to achieve the goals of AML law within the banking sector.

Design/methodology/approach

This study firstly evaluates the efficiencies of the available risk-based sanctions aimed at making the banks the gatekeeper for money laundering. It points out the three-fold deficiencies of the SAR regime in the UK. Lastly, it discusses and examines the merits of multiple proposals for reformation.

Findings

It is argued that the risk-based sanctions have failed to achieve their goals to deter banks from abusing their products and services to facilitate money laundering activities. In revealing the three-fold deficiencies of the SAR regime – theoretical flaws, practical inapplicability and institutional culture – this study argues for both the retainment of the current regime and the repositioning of regulation focus on the reformation of institutional culture, particularly within large or multinational corporates, in terms of their commitment to fulfilling AML obligations.

Originality/value

This essay has concluded that the regime has correct tools under the Proceeds of Crime Act 2002, the Money Laundering Regulations 2017 and the SMCR to address problems associated with AML reporting obligations imposed on the banking sector.

Article
Publication date: 1 July 2006

Satish M. Kini

To draw lessons learned from recent anti‐money laundering enforcement actions.

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Abstract

Purpose

To draw lessons learned from recent anti‐money laundering enforcement actions.

Design/methodology/approach

After providing a brief introduction to the AML regime, this article reviews the recent high‐profile enforcement actions. The article then examines what compliance lessons can be learned from these recent cases. Put differently, the article attempts to identify those measures that firms can take now to avoid being subject to headline‐grabbing enforcement actions in the future.

Findings

Lessons learned from key recent enforcement actions include the following: SAR filings matter and ensuring an adequate SAR regime means ensuring both systems and staffing are commensurate with an institution's activities; an AML program can only function well if it is calibrated properly to the risks that the institution's businesses face; business growth needs to be accompanied by AML compliance growth; as institutions expand globally, they need to consider how to apply their AML programs across geographies and to ensure that common best practices are being followed by all employees, wherever located; and financial institutions must ensure not only that they have written policies and procedures, but also that those procedures are followed in practice.

Originality/value

Draws the most important lessons learned from recent key anti‐money laundering enforcement actions.

Details

Journal of Investment Compliance, vol. 7 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 15 May 2007

Rowan Bosworth‐Davies

The purpose of this chapter is to look at the implications of the laws which are designed to prevent and forestall money laundering and how they impact upon relevant industry…

2230

Abstract

Purpose

The purpose of this chapter is to look at the implications of the laws which are designed to prevent and forestall money laundering and how they impact upon relevant industry sectors.

Design/methodology/approach

The paper looks specifically at the implications of the word “suspicion” and what they really mean. It examines the context of “suspicious transaction disclosures” and reviews the ways in which the UK Government is seeking to change the terms of engagement into requiring “suspicious activity reporting”. The paper also looks at how potentially suspicious activities can be disguised by the professional money launderer, in ways which spell danger for financial institutions.

Findings

If government wishes to introduce regulatory change, then it should do so openly, transparently and in the full glare of publicity, and provide a full opportunity for the issues to be debated by parliament, and not seek to slide it onto the statute books using underhand methods.

Originality/value

The paper offers insights into the implications of global money laundering laws.

Details

Journal of Money Laundering Control, vol. 10 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

Open Access
Article
Publication date: 18 February 2022

Anthony B.L. Cheung

The purpose of this book launch speech is to introduce the book I author, Can Hong Kong exceptionalism last? Dilemmas of governance and public administration over five decades

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Abstract

Purpose

The purpose of this book launch speech is to introduce the book I author, Can Hong Kong exceptionalism last? Dilemmas of governance and public administration over five decades 1970s-2020 (2021). The book critically reviews the governance and public administration from 1970s to 2020, identifying strengths and capabilities as well as constraints and dilemmas.

Design/methodology/approach

The book is based on my decades of academic observations and personal political experience by interpreting and re-interpreting the Hong Kong journey, with reflections on past assumptions and raising new questions.

Findings

This book identifies five exceptional aspects: (a) Under British rule Hong Kong was governed as an atypical colony; (b) It was one of the Four Little Dragons as part of the East Asian Miracle; (c) In the 1990s, it was one of the regional pioneers in public sector reform; (d) The unique constitutional status of post-1997 Hong Kong as a Special Administrative Region (SAR) of China; (e) After reunification, the SAR government, though only semi-democratic, is checked by balancing and monitoring mechanisms no less vigorous than some developed democracies. It also examines various governance problems faced in the post-1997 period.

Originality/value

Hong Kong is again in times of uncertainty and volatility. The city has entered a ‘second transition’ after 2020, and it is undergoing a bigger test than in 1997. After reviewing the past, I opine in the book that Hong Kong has to identify its niche areas, not only in economics. It needs a paradigm shift in how it relates to the Mainland within ‘One Country’ and how it relates to the world as a global metropolis.

Details

Public Administration and Policy, vol. 25 no. 1
Type: Research Article
ISSN: 1727-2645

Keywords

Article
Publication date: 14 August 2007

Peter A. Sproat

Asset recovery and the incentivisation of law enforcement is a theme within both the official and critical discourses on anti‐money laundering and asset recovery. This paper…

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Abstract

Purpose

Asset recovery and the incentivisation of law enforcement is a theme within both the official and critical discourses on anti‐money laundering and asset recovery. This paper attempts to find out whether this so‐called “new policing of assets” in the UK has produced new assets for policing.

Design/methodology/approach

The aim is achieved by producing an estimate for the costs to private companies and public authorities as well as an estimate of the financial benefits, both of which challenge the costs and benefits stated in previous work on the issue.

Findings

In doing this work it points out the difficulty of producing such costings and questions whether the regime justifies the compliance costs imposed.

Originality/value

The paper contributes to the debate about improving the quality of cost‐benefit analyses of the money laundering regime.

Details

Journal of Money Laundering Control, vol. 10 no. 3
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 23 June 2023

Mario Menz

This paper aims to show how financial services firms determine whether customer transactions or behaviours meet the threshold for suspicious activity reporting mandated by the…

Abstract

Purpose

This paper aims to show how financial services firms determine whether customer transactions or behaviours meet the threshold for suspicious activity reporting mandated by the Terrorism Act 2000 and the Proceeds of Crime Act 2002, and how suspicious activity reporting is executed in practice.

Design/methodology/approach

Semi-structured interviews have been carried out among compliance professionals in UK financial services.

Findings

Two issues related to suspicious activity reporting have been identified. Firstly, a widespread misunderstanding about the tipping-off offence under s. 333 Proceeds of Crime Act 2002 has been identified, which appears to be a root cause for poor quality as well as over-reporting of suspicious activity. Secondly, issues related to the notice and moratorium periods used by the UK’s National Crime Agency appear to deter reporting of suspicious activity related to live transactions.

Practical implications

The paper makes suggestions for changes financial services firms and the UK’s National Crime Agency can make to improve the effectiveness of suspicious activity reporting.

Originality/value

The paper provides valuable insights which can be used to limit the flow of criminal funds, improve the quality of suspicious activity reporting and enhance the effectiveness of law enforcement agencies.

Details

Journal of Financial Crime, vol. 31 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 23 March 2020

Constance Gikonyo

Kenya is vulnerable to trade-based and other forms of money laundering. Banks are prime targets for money launderers since they can facilitate the processes of placement, layering…

Abstract

Purpose

Kenya is vulnerable to trade-based and other forms of money laundering. Banks are prime targets for money launderers since they can facilitate the processes of placement, layering and re-integration. Consequently, banks are key in fulfilment of the prohibitory and preventative anti-money laundering (AML) strategies. In executing these obligations, the potential for clashes between the bank following the law and obeying its contractual duties to the client arises. Hence, this paper aims to examine these potential conflicts of interests.

Design/methodology/approach

The examination is based on reviewing relevant literature, case law and analysing the Proceeds of Crime and AML Act and its attendant regulations. These form the core of the AML regime imposing obligations on banks.

Findings

The analysis indicates the provisions are robust and can assist in addressing money laundering risks faced by banks. Nonetheless, there are identified gaps since the primary AML legislation does not provide guidance on various issues. This can potentially lead to banks facing litigation from customers for failure to honour its duty of secrecy and customer’s instructions.

Originality/value

The paper seeks to make a practical and scholarly contribution in considering the issue and possibly filling this gap through advocating for statutory amendment. Subsequently, positive review of the law will help strike a balance between interference in the banker-customer contractual relationship and facilitation of banks fulfilling their prohibitory and enforcement of AML obligations.

Details

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

Keywords

Article
Publication date: 5 October 2015

Zeyu Huang

This paper aims to, inspired by the media report concerning the misuse of China UnionPay cards, examine the elements of money laundering offence in Macau SAR through a case study…

Abstract

Purpose

This paper aims to, inspired by the media report concerning the misuse of China UnionPay cards, examine the elements of money laundering offence in Macau SAR through a case study, which also calls for the mutual legal assistance between mainland China and Macau.

Design/methodology/approach

This paper provides the case study of China UnionPay scandal in accordance with Macau law and comparative analysis of legislation and regulations in mainland China and Macau. Relevant suggestions are presented.

Findings

Despite the lack of actually discovered money laundering cases involving China UnionPay, the methods of smuggling money from mainland China across the border to Macau implied a “risk exposure” of Anti-Money Laundering (AML) mechanism of Macau SAR. The risk of money laundering therein makes it necessary to establish and enforce the inter-regional mutual legal assistance for AML. Sensitive issues thereof shall be handled ipso jure and reasonably.

Practical implications

This paper is a good attempt to touch upon the long-term puzzle in inter-regional mutual legal assistance in Greater China. The specific case study may act as an ice-breaker about how to develop inter-regional mutual legal assistance in specific criminal matters.

Originality/value

This paper, first, reacts to the legal problem caused by China UnionPay scandal, which also will be beneficial for the legal debates and policy-making upon the establishment and enforcement of mutual legal assistance in Greater China.

Details

Journal of Money Laundering Control, vol. 18 no. 4
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 1 January 2002

TODD STERN, SATISH M. KINI and STEPHEN R. HEIFETZ

An exhaustive analysis of the current state of play of both the old and new law and the regulations promulgated thereunder. A one‐stop analysis of the state of the requirements…

Abstract

An exhaustive analysis of the current state of play of both the old and new law and the regulations promulgated thereunder. A one‐stop analysis of the state of the requirements under the USA Patriot Act and particularly how it affects broker‐dealers.

Details

Journal of Investment Compliance, vol. 2 no. 3
Type: Research Article
ISSN: 1528-5812

Article
Publication date: 3 February 2022

Natalie W.M. Wong, Ka Ki Lawrence Ho, Mao Wang and Chih-Wei Hsieh

A debate emerged among members of public administration academia soon after COVID-19 appeared on the roles and measures that governments ought to deploy to prevent infection. One…

Abstract

Purpose

A debate emerged among members of public administration academia soon after COVID-19 appeared on the roles and measures that governments ought to deploy to prevent infection. One prevalent discourse is the strength of “strong government” in the fight against the virus—the administrative capacity to launch prompt, appropriate and effective actions that entail collaboration with citizens. A notable development in governance is that new public management (NPM) principles, such as the value of money and the pluralisation of service delivery, are gradually put aside when governments urgently need to curb the spread of infection. The roles of bureaucracy and centralised action are re-emphasised in the policymaking and implementation of anti-epidemic measures. Such a trend allows us to examine if the COVID-19 public health crisis has fundamentally reversed the trend of government retreat in public service within neoliberal regimes since the 1980s.

Design/methodology/approach

For this research, the authors selected two “strong governments” in Asia—Hong Kong and Taiwan—by showing how administrators outline their anti-pandemic strategies, examining the role of government in coordinating responses and how bureaucracy interacts with the other two key domains of the governance mechanism: civil society and the market. These two offshore Chinese capitalist economies and pluralistic societies are perceived to have “strong government capacity” in the fight against COVID-19, presumably as a key attribute to their success confining the spread of infection during the early stages of the first outbreak. Both societies reported low infection rates and low mortality rates until September 2020. The authors browsed databases developed by scholars (Cheng et al., 2020; Hale et al., 2020) and referred to two “rubrics” to assess and compare government actions in both places in response to COVID-19. The authors itemised, categorised and counted the policy actions in both places according to the rubrics, noticed that the policy footprint appeared in over two-thirds of indicators of proactive government interventions and identified double-digit counts in nearly half of the categories.

Findings

The authors found that both governments attempted to establish strong stewardship and quick measures to contain the infection. The pattern of “strong government” is, however, not the same as that superficially exhibited. Taiwan took limited steps to regulate business activities but proactively intervened and coordinated the supply of hygienic utilities. Hong Kong launched aggressive attempts to reduce human mobility but remained non-active despite the “face mask run” in society. The “strong government” aspect also received divergent reactions from society. There was extensive cross-sectoral collaboration under the centralised “National Team” advocacy in Taiwan, and there has been no record of local infection for over 10 months. The Hong Kong government was repeatedly doubted for its undesirable stewardship in anti-epidemic measures, the effectiveness of policy interventions and the impartiality of law enforcement. Spontaneous actions during the health crisis from civil societies and private markets were noted, but they seemed uncoordinated with official attempts.

Originality/value

The initial findings enable us to rethink correlations between state capacity and legitimacy in the fight against the virus and its development post-COVID-19. Apparently, Taiwan and Hong Kong demonstrated a “re-expansion” of their public sector during the public health crisis, but not in the same format. This can be understood based on their varying regime values and administrative systems. The pandemic has been a catalyst, pushing both regimes back to their original track of public administration establishments. The concept of “path dependence” might explain the initial development and project the longer-term transformation of the public sector in both places.

Details

International Journal of Public Sector Management, vol. 35 no. 4
Type: Research Article
ISSN: 0951-3558

Keywords

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