Identifying Money Laundering in Business Operations as a Factor for Estimating Risk

2017 ◽  
Vol 3 (3) ◽  
pp. 7-16
Author(s):  
Sonja Cindori ◽  
Jelena Slović
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Cash Flows ◽  
Terrorist Financing ◽  
Business Transactions ◽  
Business Operations ◽  
Terrorism Financing ◽  
Business Changes ◽  
Butterfly Diagram ◽  
A Company

Money laundering and terrorist financing can be performed in many ways, regular business operations being among them. Business activities go through a large number of business changes, which offers numerous options for money or assets to enter the company via seemingly legal business transactions, enabling money or assets to remain in regular business flows once money laundering is completed. On the other hand, the opposite scenario, in which there is interest in money to be transferred from regular flows to alternative flows, including terrorism financing, is also common. This paper will discuss legal business operations as a framework for money laundering and terrorist financing. Cash flow cycles are presented in form of an algorithm as connections between irregularly and regularly acquired assets in the process of money laundering through business operations, as well as re-entry from regular flows into alternative cash flows. The “Butterfly Diagram”, presenting groups of business changes enabling entry of larger amounts of money and assets owned by a company in order to be laundered or their exit with the effect or tax evasion or terrorism financing, evolved from the algorithm. Also, the “Butterfly Diagram” includes certain forms of legal and tax misuse which enable legalizing the specified activities. The business reality is exceptionally dynamic and needs of money launderers keep growing, this is why there is an increase in types and numbers of business transactions that can be used for money laundering or terrorism financing, resulting in the need to keep modifying the presented “Butterfly Diagram”.

Terrorism financing and money laundering: two sides of the same coin?

2018 ◽  
Vol 25 (4) ◽  
pp. 962-968 ◽  
Author(s):  
Frederic Compin
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
White Collar Crime ◽  
Islamic State ◽  
Content Type ◽  
Fully Integrated ◽  
Financial Crimes ◽  
Terrorism Financing ◽  
Utilitarian Approach ◽  
The Cost

Purpose The purpose of this paper is to analyse how terrorism financing can be assimilated with money launderning when the amounts ofmoney involved differ so markedly. Not only is the cost of financing terrorist attacks minimal compared to the huge sums often at stake in financial crimes, but also the psychological profile of terrorists, who are reclusive by nature, contrasts starkly with that of financial criminals, who are usually fully integrated members of society. When terrorism financing is equated with money laundering this represents a utilitarian approach in that it facilitates the creation of a security strategy and stifles criticism of criminogenic capitalismthat turns a blind eye to tax evasion. Design/methodology/approach The analysis is conceptual, focussing on the assimilation of terrorism financing with money laundering. There is an interview with a French magistrate, specialized in the fight against corruption and white-collar crime, and data have been collected from international organizations and scholarly articles. Findings The fight against money laundering and money dirtying has clearly sparked numerous controversies around evaluation, scope, criminal perpetrators and a lack of vital cooperation between administrative and judicial services. Social implications This paper raises questions about the reasons behind the linking of money laundering and money dirtying by states and players in public international law and why the fight against money laundering is very much overshadowed by their focus on terrorist financing in dealing with the growing threat of Islamic State, otherwise known as ISIS or ISIL, in the Middle East and West Africa. Originality/value The paper enables the reader to raise the question of similarities between the fight against money laundering and the fight against terrorism financing.

Alternate remittance systems in Ghana: a trade enabler or an organised fraud

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alexander Asmah ◽  
Williams Abayaawien Atuilik
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Participant Observation ◽  
Banking System ◽  
Multiple Sources ◽  
Content Type ◽  
Case Study Analysis ◽  
Business Operations ◽  
Border Trade ◽  
Single Method

Purpose Alternate remittance systems (ARS) are inherently not illegal; however, the nature of their activities has mostly been linked with money laundering and terrorist financing, which raises several questions as to why businesses in Ghana rely on these systems to conduct their cross-border trade. The purpose of this study is seeks to understand the nature of ARS in Ghana and analyse why business owners rely on them for their transactions. Design/methodology/approach Three companies were selected for the case study analysis. This research paper used a qualitative data analysis for the study. Interviews, direct participant observation and documentary review were the main techniques for data collection. The multiple sources of evidence helped to reduce the potential bias of the single method. Findings This paper found that some businesses using the system in Ghana can acquire unsecured loans at little or no interest cost, which provides a good source of funding to support business growth. Unlike other studies, this study proves that in some instances, ARS operators transact business with the clients they do not, particularly trust. Within the context of this study, this paper found evidence that supports money laundering, but the underlining crime is mostly tax evasion. The adoption of the system is an attempt to disguise the proceeds of the tax evasion crime and clean them through business operations. Research limitations/implications This analysis was based on the strain theory from the perspective of the clients. Future studies can focus attention on the ARS operators and understand their perspectives. Several other fraud theories could be used as a lens to understand the phenomena in Ghana and other jurisdictions. Practical implications The study throws more light on a “secret” or an underground banking system that operates in Ghana. It provides insights that can guide regulatory authorities in their policy implementation. The need for stricter enforcement of the law has also been highlighted. Originality/value To the best of the authors’ knowledge, this study is original, as it focuses on a sector that is highly secretive but has significant implications on the Ghanaian economy.

The Relevance of Maqasid al Shari'ah to Anti-Money Laundering and Terrorism Financing

2020 ◽  
pp. 179-194
Author(s):  
Maruf Adeniyi Nasir
Keyword(s):  
Money Laundering ◽  
Financial System ◽  
Islamic Finance ◽  
Complex Relationship ◽  
Terrorist Financing ◽  
The World ◽  
Terrorism Financing ◽  
Illegal Activities ◽  
Muslim Scholars

The modern financial system has continuously been traumatised by money laundering and terrorism financing. This is partly because it is a concept that revolves around the complex relationship between money and crime. The challenges posed by these menaces have become a phenomenon that the world has ceaselessly looked for means to address. Yet launderers and terrorists continue to perfect methods of perpetuating their illegal activities, while the havoc created by the menace of these crimes are enormous and remains unquantifiable in term of the actual estimate. Interestingly, Maqasid al Shari'ah has caught the attention of several Muslim scholars as a useful tool that can resolve several contemporary issues. Consequently, examining the relevance of Maqasid al Shari'ah which is the basis of Islamic Finance on money laundering and terrorist financing (AML/CFT) is desirable. The focus of this chapter, therefore, is to examine the relevance of Maqasid al Shari'ah in the fight against the menace of money laundering and terrorism financing

scholarly journals O crime de lavagem de dinheiro no âmbito da convenção sobre o combate a corrupção de funcionário públicos estrangeiros em transações comerciais internacionais da Organização para a Cooperação e Desenvolvimento Econômico (OCDE)

2015 ◽  
Vol 10 (2) ◽  
pp. 187
Author(s):  
Notari Bonini Notari ◽  
Rogério Gesta Leal
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Economic Cooperation ◽  
General Assumption ◽  
Fundamental Rights ◽  
Social Rights ◽  
Public Officials ◽  
Brazilian Government ◽  
Business Operations ◽  
Financial Issues

O presente artigo tem por objetivo analisar o fenômeno da corrupção e o crime de lavagem de dinheiro e a forma como vem sendo abordada essa temática no âmbito da Convenção sobre o Combate da Corrupção de Funcionários Públicos Estrangeiros em Transações Comerciais Internacionais da Organização para a Cooperação e Desenvolvimento Econômico (OCDE) e à formulação de políticas públicas para o Combate a Corrupção e a Lavagem de Dinheiro, por parte do Estado Brasileiro. A Lavagem de Dinheiro é uma das espécies de práticas corruptivas, de tal modo que esse tipo de ilícito compromete a efetivação dos direitos fundamentais, dos direitos sociais, do direito penal econômico, o Estado Democrático de Direito afetando, de forma direta, as políticas públicas tributárias em razão do cometimento de ilegalidades e delitos ligados às questões de ordem econômica, tais como, o suborno, fraudes, sonegação fiscal, propina, lavagem de dinheiro, tráfico de drogas, armas, ligados de maneira indireta, ao crime organizado. Considerando que o artigo é de natureza bibliográfica, será utilizado quanto ao método de abordagem a ser adotado no seu desenvolvimento o dedutivo, tendo pressuposto argumentos gerais (premissa maior) para argumentos particulares (premissa menor); enquanto o procedimento será analítico. Palavras chaves: Políticas Públicas Tributárias, Lavagem de Dinheiro, Corrupção de Funcionários Públicos Estrangeiros, ordem econômica, ilegalidades. MONEY LAUNDERING CRIME UNDER THE CONVENTION ON THE FIGHT AGAINST CORRUPTION OF FOREIGN public employee in the business operations of the International Organization for Economic Cooperation and Development (OECD) This article aims to analyze the phenomenon of corruption and money laundering and how it is addressing this issue under the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of the Organization for Economic Cooperation and Economic Development (OECD) and the formulation of public policies for the Fight against Corruption and Money Laundering, by the Brazilian government. Money laundering is a kind of corrupt practices, so this type of crime committed with the observance of fundamental rights, social rights, economic criminal law, the democratic rule of law affecting directly the tax public policy because the commission of unlawful acts and crimes related to financial issues such as bribery, fraud, tax evasion, bribery, money laundering, drug trafficking, arms linked indirectly to the crime organizado.Considerando that the article is a bibliographic character , will be used as a method of approach is adopted in its deductive development, with arguments general assumption (major premise) for particular arguments (minor premise); while the procedure is analytic.

Blockchain Technology and General Issue of Tax Evasion via Bitcoin

2021 ◽  
pp. 92-108
Author(s):  
Güneş Çetin Gerger
Keyword(s):  
Supply Chain ◽  
Money Laundering ◽  
Tax Evasion ◽  
Market Value ◽  
Financial Fraud ◽  
Terrorist Financing ◽  
Blockchain Technology ◽  
The World ◽  
Financial Transactions ◽  
Digital Assets

Cryptocurrencies often also serve money laundering activities, terrorist financing, tax evasion, and other illegitimate activities with a market value of more than 7 billion euros across the globe, though the total amount is hardly measurable. Indeed, the blockchain technology involves many virtual currencies, including bitcoin, to conduct various financial transactions related practices throughout the world economies. Besides, other blockchain applications are making positive contributions to a wide array of other industries including healthcare, supply chain, manufacturing, etc. This technology which constitutes the backbone of digital assets transactions currencies is characterized by anonymity, privacy, security, and speed. In this sense, for tax administration authorities, detection of financial fraud and regulations with respect to taxation of virtual transactions pose newer emerging challenges. This chapter aims to examine the blockchain technology, cryptocurrencies, especially bitcoin, and look into regulations by world governments to combat tax evasion and illegal transactions.

UK fraud and tax evasion measures enhanced

2017 ◽  
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
House Prices ◽  
Content Type ◽  
Terrorist Financing ◽  
Financial Activity ◽  
The United Kingdom ◽  
The Government ◽  
Overseas Territories ◽  
The Uk

Subject Money laundering and terrorist financing clampdown. Significance On March 15, the UK Treasury announced plans to create a new watchdog aiming to improve detection of crimes relating to money laundering and terrorist financing, and published draft updates to money-laundering regulations. After Brexit, the United Kingdom will no longer have to adhere to EU money-laundering rules; improving the regulatory framework around suspicious financial activity is crucial to ensure it does not become even more attractive to international launderers. Impacts The new watchdog should make compliance easier, minimising the regulatory burden on high-value sectors. Increased scrutiny of estate agents and lawyers may reduce demand for high-end UK residential property, slowing growth in house prices. Against the backdrop of Brexit, the government may shy away from pressuring Overseas Territories in case it provokes independence demands.

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