Analysis of the Practices of Financial Intelligence Units (FIUs) and Other Anti-money Laundering Agencies Within EU

2021 ◽  
pp. 241-269
Author(s):  
Darko Panevski ◽  
Tomáš Peráček ◽  
Katarína Rentková
Keyword(s):  
Money Laundering ◽  
Financial Intelligence

Artificial harmony

2014 ◽  
Vol 17 (4) ◽  
pp. 428-439 ◽  
Author(s):  
Clifford Williams
Keyword(s):  
Money Laundering ◽  
Information Exchange ◽  
Global Economy ◽  
Task Force ◽  
National Interests ◽  
Content Type ◽  
Network Building ◽  
Primary Means ◽  
Transfer Procedures ◽  
Financial Intelligence

Purpose – The purpose of this paper is to explain that the commonly used method allowing for inter-agency cooperation between national financial intelligence units, the memorandum of understanding, is inadequate and ineffective in creating a cooperative global financial intelligence unit capable of combating money laundering typologies on an international scale. Design/methodology/approach – Methods of international financial intelligence unit (FIU) cooperation have chiefly occurred in two ways: first, through the efforts of the Egmont Group; and second, through the inclusion of provisions concerning FIUs contained in international legal documents. The first is an impossibility. Findings – This paper proposes that the result of implementation of the 2012 Financial Action Task Force Recommendations will be an informal network of FIUs where the Egmont group acts as a centralized operator for information exchange, effectively creating an informal global FIU (“GFIU”), but that this system, or a cooperative global financial intelligence unit system based on FIU-to-FIU exchanges will not allow for effective multilateral, international cooperation. Research limitations/implications – This is because national interests and unfamiliarity with capabilities provided in the Egmont Group’s cooperative platform have and will continue to result in under-utilization of cooperative efforts, and because the traditional mechanism employed for FIU-to-FIU exchanges, the memorandum of understanding (“MOU”), makes uniform or standardized information request and transfer procedures that are required for multilateral or multi-agency efforts to combat money laundering across international boundaries an impossibility. Practical implications – The Egmont Group’s cooperational structure should be the primary means by which to achieve a GFIU. Social implications – The global combat on money laundering will be more effective, thereby more fully protecting the global economy. Originality/value – A comparison between the Egmont Group’s network building mechanism and the existing use of MoU to create global cooperation against money laundering has not been analyzed.

Mafia, money-laundering and the battle against criminal capital: the Italian case

2018 ◽  
Vol 21 (2) ◽  
pp. 124-133 ◽  
Author(s):  
Yara El Siwi
Keyword(s):  
Money Laundering ◽  
Asset Management ◽  
Organised Crime ◽  
Future Research ◽  
Content Type ◽  
Italian Case ◽  
Investment Opportunities ◽  
To Come ◽  
Financial Intelligence ◽  
The Relationship

Purpose This paper aims to look at the case of Italy, which clearly stands out in its relationship with organised crime. The recognition that money is the “lifeblood” of OC has resulted in the implementation of what we can refer to as the anti-money laundering (AML) regime, which backs the systematic targeting of mafia assets and the application of severe obstacles to the concealment of dirty money through increased financial surveillance. This paper discusses the financialisation of counter-mafia strategies, with the purpose of questioning the extent to which this system has been delivering what it promised. Design/methodology/approach The paper is divided into three chapters. The first chapter looks at the relationship between Italian mafia and dirty money. The second chapter discusses the rationale and pillars of the AML regime. Finally, the last section examines and discusses recent evidence of the outcome of AML policies, by looking at figures as reported by relevant entities, such as the Financial Intelligence Unit (FIU), Europol, the Italian Ministry of Interior and the Direzione Investigativa Anti-Mafia (DIA). Findings Evidence suggests that financial surveillance, the first pillar of the AML regime, is much costlier than it is beneficial to society. Reporting of suspicions has rocketed in the past years, bringing very little change to yearly ML convictions, and being only marginally helpful in mafia-related investigations, confiscations and arrests. The confiscation of assets from mafia members, i.e. the second pillar of the AML regime, has proven to be effective in gaining control over large sums and goods. However, more research is needed around the question of confiscated asset-management and desirable re-investment opportunities. Originality/value As the AML regime gains in prominence internationally, it is of great value to assess its achievements so far. This is especially true of a country like Italy, which suffers from a long-standing mafia dominance. This paper represents a modest initial inquiry, which will hopefully be complemented by future research to come to an in-depth understanding of the value and limitations of an AML regime in fighting OC.

Suspicious transaction reporting: an Indian experience

2015 ◽  
Vol 18 (1) ◽  
pp. 2-16 ◽  
Author(s):  
B. Viritha ◽  
V. Mariappan ◽  
Irfan Ul Haq
Keyword(s):  
Money Laundering ◽  
Reporting System ◽  
Task Force ◽  
Annual Reports ◽  
Content Type ◽  
Suspicious Transaction ◽  
Financing Of Terrorism ◽  
Secondary Information ◽  
Financial Intelligence ◽  
The Impact

Purpose – The purpose of this paper is to assess the effectiveness of anti-money laundering (AML) reporting system in India in terms of Suspicious Transaction Reports (STRs) and its impact on countering money laundering through the conviction and confiscation. The main emphasis of financial action task force (FATF) guidelines on AML and countering of financing of terrorism (CFT) is the obligation of financial institutions and designated non-financial businesses and professions to instantaneously report the suspicious transactions to Financial Intelligence Unit (FIU), an agency with a mandate to deal with AML. Design/methodology/approach – It is a descriptive study to explore the outcome of the AML process. The study has used the secondary information published in the annual reports of FIU-India and FATF. The study period is 2006-2007 to 2011-2012. Findings – Though there is a significant increase in the STRs filed, the impact of AML is not realized in terms of neither AML-related convictions nor confiscations, since the enactment of the Prevention of Money Laundering Act (PMLA). However, the AML/CFT regime in India has just started earnestly, and it still has to go a long way before stabilizing and achieve tangible results. Research limitations/implications – In the Indian context, only few of the effectiveness indicators of the FATF methodology 2013 could be selected due to the limited availability of data, as much of the information maintained by various stakeholders, including reporting entities, FIU-India and other investigative and enforcement agencies, is kept confidential. Thus, it is difficult to establish the effectiveness of enforcement function of AML. Evaluation of effectiveness of AML is judged on the basis of convictions and confiscations. Originality/value – There is a dearth of studies assessing the reporting system under PMLA and thus this paper attempts to throw some insights on the outcome of AML chain, especially the impact of reporting suspicious transactions.

The Nigerian Money Laundering (Prevention and Prohibition) Bill, 2016: a critical appraisal

2017 ◽  
Vol 20 (1) ◽  
pp. 79-88 ◽  
Author(s):  
Ehi Eric Esoimeme
Keyword(s):  
Money Laundering ◽  
Critical Appraisal ◽  
Task Force ◽  
Director General ◽  
Financial Action Task Force ◽  
Content Type ◽  
High Court ◽  
Customer Information ◽  
Financial Action Task ◽  
Financial Intelligence

Purpose This paper aims to critically examine the Money Laundering (Prevention and Prohibition) Bill, 2016. It also aims to determine the level of effectiveness of the preventive measures in the Bill. Design/methodology/approach The appraisal took the form of a desk study, which analyzed various documents and reports such as the Financial Action Task Force Recommendations 2012, Mutual Evaluation Reports conducted by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) on Nigeria, the judgment delivered by Justice Gabriel Kolawole of the Federal High Court Abuja and the United Kingdom’s national risk assessment of money laundering and terrorist financing. Findings This paper determined that the Bill could achieve its core objectives if the following recommendations are implemented: section 15 of the Bill should be modified to include the definition of “Arrangement”; lawyers should be allowed to send their Suspicious Transaction Report to the Nigerian Bar Association, provided that there are appropriate forms of cooperation between the NBA and the Financial Intelligence Unit, and this approach is in line with the Financial Action Task Force Recommendations; the Bill should expressly prohibit retaliation by employers against whistleblowers and provide them with a private cause of action in the event that they are discharged or discriminated against by their employers, and this approach is being adopted by the US Dodd–Frank Act; a request for customer information, by the Director-General of the Nigeria Financial Intelligence Centre, should be made pursuant to an order of the Federal High Court obtained upon an ex-parte application supported by a sworn declaration by an authorized officer of the Centre, justifying the request for customer information. Originality/value This paper offers a critical appraisal of the Money Laundering (Prevention and Prohibition) Bill, 2016. The paper will identify the strengths and weaknesses of the Bill. This is the only paper to adopt this kind of approach.

Is tackling Trade Based Money Laundering (TBML) through stricter reporting regulation the most effective response?

2018 ◽  
Vol 21 (3) ◽  
pp. 345-357 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Academic Writing ◽  
Negative Impact ◽  
Effective Response ◽  
Content Type ◽  
Financial Crimes ◽  
Regulatory Approach ◽  
Service Sectors ◽  
Financial Intelligence ◽  
Empirical Implications

PurposeThis paper (written in August 2015) aims to discuss the regulatory approach to detecting and preventing trade-based money laundering (TBML) by using the example of Financial Crimes Enforcement Network (FinCEN) and its use of geographic targeting orders.Design/methodology/approachThe paper uses both theoretical and empirical reports on TBML to explore whether increased regulation will ultimately achieve the ends it claims to offer.FindingsThe main findings from the analysis are that increased regulation has been found to have a negative impact on improving TBML detection. There is evidence that it causes an over-defensive response from banks that leads to a decrease in useful information to financial intelligence units.Research limitations/implicationsThe research topic is very new and an emerging topic; therefore, analysis papers and other academic writing on this topic are limited.Practical implicationsThis paper has implications for both the regulatory and the banking/financial service sectors.Originality/valueThe originality of this paper is the deeper analysis of a specific TBML case, and the focus is on both the theoretical and empirical implications of the approach being used.

scholarly journals Trade-based money laundering: development of the «red flags» system

2022 ◽  
Vol 7 (4) ◽  
pp. 55-69
Author(s):  
M. G. Girich ◽  
A. D. Levashenko
Keyword(s):  
International Trade ◽  
Financial Market ◽  
Money Laundering ◽  
Financial Data ◽  
Red Flags ◽  
Exchange Of Information ◽  
Foreign Countries ◽  
Intelligence Agencies ◽  
Financial Intelligence

The OECD and the FATF highlight the problem of money laundering via international trade with a view to disguising illicit gains and moving value through the use of trade transactions. For example, inaccurate invoices may be used, which, according to the Global Financial Integrity estimates, resulted in $0,9 trillion to $1,7 trillion losses in 148 countries in 2006–2015. In Russia, the authorities attempt to reduce the risks of money laundering within the framework of international trade through the use of currency regulation, while foreign countries are using a risk-based approach by developing the “red flags” systems that allow financial intelligence agencies, customs and other state bodies as well as subjects of financial market (through which the payments for export-import transactions are made) and the companies participating in international trade themselves to determine whether a transaction entails risks of money laundering. In addition, internal and international inter-agency exchange of information related to money laundering in international trade, including trade and financial data, is being developed.

scholarly journals Geographical risk of money laundering in the European banking system

2012 ◽  
Vol 3 (3) ◽  
pp. 103-123 ◽  
Author(s):  
Patrycja Chodnicka
Keyword(s):  
Money Laundering ◽  
Banking System ◽  
Transitional Period ◽  
Gdp Per Capita ◽  
Rule Based ◽  
Maximum Value ◽  
European Banking ◽  
Per Capita ◽  
Rule Based Approach ◽  
Financial Intelligence

The issue of risk of money laundering in the European banking system was presented in the article. It describes two approaches used by regulators to prevent the mentioned phenomenon: the rule-based approach and the risk-based approach. The author also identified strategies which are used by banks as entities functioning to maximize profit in the conditions of having full and incomplete information by the FIU. Then, the European countries were analyzed with respect to participating reports on suspicious transactions in the total number of reports, which are sent by all the obligated entities to the national financial intelligence units. We also verified the value of two indicators: the value of above-threshold transactions and the value of financial penalties, which are imposed on banks for failure to comply with the rules on anti-money laundering. Some hypotheses were examined. With the increase in GDP per capita grows the maximum value of the mentioned financial penalties grows. There is a negative correlation between the share of banks in the total of reported suspicious transactions and GDP per capita, which is an effect of extending the list of the obligated entities and the lack of the differentiation of sanctions in the various categories of such entities. In connection with the applying of transitional period for implementing the directive by the banks, there is an inverse relationship between the amount of the penalty, and the number of suspicious transactions reports.

scholarly journals A methodology for highlighting nodes in graphs applied to the analysis of financial intelligence reports

2020 ◽  
Author(s):  
Roberto Zaina ◽  
Gustavo Medeiros de Araujo ◽  
Vinicius Faria Culmant Ramos
Keyword(s):  
Data Mining ◽  
Money Laundering ◽  
Link Analysis ◽  
Computational Techniques ◽  
Large Set ◽  
Analysis Program ◽  
Research Information ◽  
Proposal A ◽  
Criminal Investigators ◽  
Financial Intelligence

Money laundering is a category of crime that requires great efforts by criminal investigators to gather a variety of information in order to set the context for an investigation. One of the sources for starting the investigation and the search for adjacent information is the Financial Intelligence Report. From this report, the researcher dives into a large set of data and information to form the panorama of the investigation. With all the information gathered and interconnected, a graph is obtained in which one can use computational techniques to search for and highlight the main ones involved in the report. Since the size of the graph and the number of nodes can take on large proportions, which would make it difficult to identify the main people, companies and financial operations, this work presents as a 2 Zaina, Roberto; Araujo*, Gustavo Medeiros de; Ramos, Vinicius Faria Culmant (2020). Uma metodologia para destaque de nós em grafos aplicada à análise de relatórios de inteligência financeira (preprint). Ciência da Informação. Disponibilizado em EmeRI - Emerging Research Information. (preprints.ibict.br) DOI: 10.21452/15188353202000002. proposal, a methodology supported by technology to highlight the main ones involved in the investigation. The methodology adopted was data mining guided by metrics such as "suspicious companies" and "suspicious accountants". With the result of the data mining, a link analysis program was loaded forming the graph with the information from the highlighted nodes, representing the main ones involved in the investigation. This methodology helps the criminal investigator, as it facilitates the processing of large volumes of data and helps to decrease the complexity of the information arising from the Financial Intelligence Reports.

The financial intelligence unit and money laundering control in Tanzania

2019 ◽  
Vol 22 (3) ◽  
pp. 543-562
Author(s):  
Eugene E. Mniwasa
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Research Approach ◽  
Institutional Reforms ◽  
Content Type ◽  
Essential Component ◽  
The Law ◽  
Financial Intelligence ◽  
Practical Implications

Purpose This paper aims to explore the role of the financial intelligence unit in Tanzania in fighting against money laundering and its predicate offences, examine its potential in controlling the problem and describe factors that undermine its efficacy. Design/methodology/approach The doctrinal research approach is used to analyse Tanzania’s anti-money laundering law and appraise its effectiveness in facilitating operations of the financial intelligence unit in fighting against money laundering and its predicate offences. The law-in-context approach is applied to interrogate the anti-money laundering law and describe non-law factors that impinge on the efficiency of Tanzania’s financial intelligence unit. Findings The law vests the financial intelligence unit with powers to perform a number of functions that are significant in fighting against money laundering and its predicate offences in Tanzania. The unit has been instrumental in curbing money laundering. The efficacy of this anti-money laundering agency, which is at its infancy stage, is emasculated by law-related, institutional and non-law factors. These factors undercut the potency of the agency. Practical implications There is a need for Tanzania to undertake policy, legislative and institutional reforms to augment the efficacy of the financial intelligence unit. The reforms should be implemented concurrently with other measures, which will enhance the country’s anti-money money laundering regime. Originality/value This paper applies the legal and non-law perspectives to evaluate the effectiveness of the financial intelligence unit as an essential component of Tanzania’s anti-money laundering regime. It proposes law-related and non-law approaches to augment the efficiency of the unit and the country’s anti-money laundering regime in general.

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