14. Combatting financial crime

2019 ◽  
pp. 679-722
Author(s):  
Iris H-Y Chiu ◽  
Joanna Wilson
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Internal Control ◽  
The Other ◽  
Active Part ◽  
Financial Crime ◽  
Due Diligence ◽  
Strong Incentive ◽  
Proceeds Of Crime ◽  
Financial Intelligence

This concluding chapter studies the regulation compelling banks and financial institutions to play an active part in combatting financial crime. Regulation takes two approaches: one is to enforce anti-money laundering law through banks and financial situations; and the other approach is to enforce anti-money laundering law against them if they should be found to be complicit in transferring proceeds of crime. Under the first approach, regulation imposes duties on banks and financial institutions to act as gatekeepers to prevent money laundering from taking place and to identify such incidents so as to help regulators carry out enforcement. Under the second approach, banks and financial institutions may be punished for sometimes inadvertently becoming complicit in money laundering, and this provides a strong incentive for them to treat their gatekeeper roles seriously. The chapter then considers the regulatory duty of due diligence, financial intelligence reporting, and internal control and governance.

Moving in the right direction to fight financial crime: prevention and detection

2018 ◽  
Vol 25 (2) ◽  
pp. 362-368
Author(s):  
Fitriya Fauzi ◽  
Kenneth Szulczyk ◽  
Abdul Basyith
Keyword(s):  
Literature Review ◽  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Asia Pacific ◽  
Financial Crime ◽  
Content Type ◽  
Financial Crimes ◽  
The Right ◽  
Financial Intelligence

Purpose The purpose of this paper is to identify current measures taken for financial crime’s prevention and detection in the context of Indonesia. Design/methodology/approach This study is based on data from articles in Indonesian newspapers relating to the current financial crimes, current measures of preventing financial crimes in Indonesia and based on the literature review. Findings There are some attempts to combat financial crimes in Indonesia, both internally and externally. The attempts that have been made for the internal scope are the enactment of anti-money laundering law, the new monitoring system of financial institutions and the formation of a superintendent institution. The attempts that have been made for the external scope are the agreement between Indonesia’ financial intelligence unit Pusat Pelaporan dan Analisis Transaksi Keuangan (PPATK), and other countries’s financial intelligence unit, the affiliation member of the Asia/Pacific Group on Money Laundering (APG) to combat financial crimes through strengthening its anti-money laundering and terror financing capabilities. Originality/value This paper presents an overview of current prevention and detection measures in the context of Indonesia, and it is hoped that this paper will contribute to the current discussion of eliminating financial crimes.

Selected challenges associated with the reliance on customer due diligence measures to curb money laundering in South African banks and related financial institutions

2021 ◽  
Vol 8 (1) ◽  
pp. 42-66
Author(s):  
Howard Chitimira ◽  
Sharon Munedzi
Keyword(s):  
South Africa ◽  
South African ◽  
Money Laundering ◽  
Financial Institutions ◽  
Financial Institution ◽  
Financial Sector ◽  
Due Diligence ◽  
Role Players ◽  
Customer Due Diligence ◽  
Combat Money Laundering

Customer due diligence is a means of ensuring that financial institutions know their customers well through know-your-customer (KYC) tools and related measures. Notably, customer due diligence measures include the identification and verification of customer identity, keeping records of transactions concluded between a customer and the financial institution, ongoing monitoring of customer account activities, reporting unusual and suspicious transactions, and risk assessment programmes. Accordingly, financial institutions should ensure that their customers are risk assessed before concluding any transactions with them. The regulation of money laundering is crucial to the economic growth of many countries, including South Africa. However, there are still numerous challenges affecting the banks and other role players’ reliance on customer due diligence measures to combat money laundering in South Africa. Therefore, a qualitative research methodology is employed in this article to unpack such challenges. The challenges include the failure to meet the identification and verification requirements by some South African citizens, onerous documentation requirements giving rise to other persons being denied access to the formal financial sector, and the lack of express provisions to regulate the informal financial sector in South Africa. Given this background, the article discusses the challenges associated with the regulation and implementation of customer due diligence measures to enhance the combating of money laundering in South African banks and related financial institutions. It is hoped that the recommendations provided in this article will be utilised by the relevant authorities to enhance customer due diligence and effectively combat money laundering activities in South African banks and related financial institutions.

Rethinking the internal mechanism of the EGMONT group in financial crime control

2019 ◽  
Vol 22 (2) ◽  
pp. 327-338
Author(s):  
Johnson Adeoye Adetunji
Keyword(s):  
Money Laundering ◽  
Technical Assistance ◽  
Financial Crime ◽  
Due Diligence ◽  
Member States ◽  
Content Type ◽  
Historical Perspectives ◽  
Fundamental Needs ◽  
Financing Of Terrorism ◽  
Investigation Process

Purpose This paper aims to evaluate the use of Intelligence gathering, especially the exercise of customer due diligence (CDD), enhanced due diligence (EDD), know your customer (KYC) and recordkeeping as effective anti-money laundering (AML) and counter-terrorism financing (CTF) measures. It re-appraises the risk of breach of privacy associated with recordkeeping of clients’ information in countries where there are no data protection laws and the role of the EGMONT group against the backdrop of the recent suspension of Nigeria from the group; it argues that, in view of other existing liberal punitive measures, suspending a developing nation like Nigeria by the EGMONT group (arising from a rigid demand for an autonomous financial intelligence unit (FIU)) is draconian and counterproductive. Finally, it argues that the fundamental needs and challenges of developing member states of the EGMONT group, particularly members that are battling with weak and non-transparent investigation process and terrorism require, inter alia, technical and manpower assistance to disrupt financial crime and financing of terrorism. Design/methodology/approach A doctrinal approach is utilised to analyse AML and CTF from the social and historical perspectives. A comparative analysis of international control of money laundering and terrorist financing, appraising the challenges of developing member states in complying with the Financial Action Task Force regulations and the principles of the Egmont group. Findings There are liberal punitive measures than suspension which the EGMONT group could apply when dealing with developing members of the group, especially on the issue of rigid demand for an autonomy of a national FIU. The fundamental needs and challenges of developing member states of the Egmont group, particularly members that are battling with weak and non-transparent investigation process and terrorism require, inter alia, technical and manpower assistance to disrupt financial crime and financing of terrorism. Originality/value The paper queries the appropriateness of the decision to suspend Nigeria by the Egmont group for failure to comply with its policy autonomy of its FIU when there are other liberal disciplinary measures that could have been applied. And, it suggests the need to lay more emphasis on technical assistance for member states to achieve the objectives of the group.

RegTech solutions and AML compliance: what future for financial crime?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Esman Kurum
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Financial Crime ◽  
Strong Positive Correlation ◽  
Content Type ◽  
Compliance Programs ◽  
Time Required ◽  
International Experts

Purpose This study aims to discuss the growing use of RegTech solutions by financial institutions to comply more efficiently with regulation in terms of anti-money laundering compliance and more specifically its influence on the evolution of financial crime in the next ten years. Design/methodology/approach Based on two online Delphi surveys sent to a panel of international experts composed of eight specially recruited professionals and specialists of anti-financial crime compliance and RegTech, five main predictions have been developed. Findings It was found that artificial intelligence would become the most impactful technology for financial institutions to fight financial crime, and that there will be a strong positive correlation between ever-more elaborated compliance programs and the level of sophistication of methods used for money laundering. Furthermore, the panel designated regulators’ recommendations as likely to be less influential than RegTech solutions, and the time required to integrate RegTech solutions for AML compliance as the main future challenge. Originality/value These predictions are meant to provide financial institutions and regulators with useful outlooks. While the reviewed literature focused on the role of regulations on the evolution of money laundering, this study puts stress on RegTech solutions and their impact on both compliance and financial crime.

Consequences of Money Laundering in Banking Sector

2013 ◽  
Vol 64 (2) ◽  
Author(s):  
Surendran Sundarakani ◽  
M. Ramasamy
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Banking Sector ◽  
Control Measure ◽  
Banking System ◽  
Economic Effects ◽  
Due Diligence ◽  
Customer Identification ◽  
Illegal Activities ◽  
The Cost

Banks are traditionally measured as pillars of economic prosperity. The best banking system will be able to ensure good production in all sectors of the economy. Money laundering is the process of providing legitimate appearance to the illegally gained revenue. Money Laundering has the tradition of eroding the financial institutions and weakening the financial sectors’ role in economic growth. It has the habit of facilitating corruption, crime and other illegal activities at the expense of countries development and can increase the risk of macroeconomic instability. Banks and other financial institutions are at the forefront of the battle against the money launderers. The negative economic effects of money laundering on economic development are difficult to quantify. International society expects every bank to perform customer identification and due diligence as it is the important control measure in preventing criminals from entering into the legitimate economy. The cost involved in combating money laundering and terrorist financing transactions are increasing largely on yearly basis however unable to eradicate them.

New developments in Hong Kong’s anti-money laundering laws

2016 ◽  
Vol 19 (3) ◽  
pp. 291-297 ◽  
Author(s):  
David Kwok
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Task Force ◽  
Case Law ◽  
New Developments ◽  
Content Type ◽  
Proceeds Of Crime ◽  
Financial Action Task ◽  
Law And Legislation

Purpose The purpose of this paper is to discuss briefly new developments in Hong Kong’s (HK) Anti-Money Laundering (AML) laws, both in terms of case law and legislation. Design/methodology/approach In terms of case law, the author discusses two decisions given by HK’s Court of Final Appeal relating to the dealing of proceeds of crime offence. Also, a guideline case on sentencing is also examined. In terms of legislation, the author briefly outlines the main provisions of the newly enacted AML and Counter-Terrorist Financing (Financial Institutions) Ordinance. Findings As suggested by the Financial Action Task Force, new measures need to be put in place. The AML laws, as they presently stand, need further improvement. Originality/value A good AML regime is necessary as HK continues to thrive as a major financial/banking centre in Asia. This paper seeks to encourage more discussion on the topic.

scholarly journals The participation of the insurance sector in the laundering of criminal proceeds

2018 ◽  
Vol 11 (2) ◽  
pp. 201-209
Author(s):  
N. A. Kabanova ◽  
E. R. Myasishcheva
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Internal Control ◽  
Task Force ◽  
Insurance Companies ◽  
Insurance Sector ◽  
Mutual Insurance ◽  
Financial Action Task ◽  
Financial Monitoring ◽  
Improvement Of Legislation

The development of financial institutions inRussiaand the scaling-up of the use of financial instruments contribute to the emergence of an increasing number of schemes for laundering criminal proceeds. At the same time, the improvement of legislation and the introduction of strict control over the activities of financial institutions lead to the complication of such schemes, including an increase in the number of entities in the financial sector involved in the process of legalization. Now criminals are increasingly using non-credit financial organizations. Subjects of the insurance sector fall into the zone of critical risk of involvement in criminal schemes. At the end of2018, aplanned event will be held inRussiawithin the framework of the fourth round of inspections, which will be carried out by the Financial Action Task Force on Money Laundering (FATF). FATF will assess Russia not only in terms of the performance of the Central Bank of Russia and the Federal Service of Financial Monitoring, but also in the effectiveness of its functions and the interaction of all links in the national system of combating legalization: from financial institutions that provide information on suspicious transactions to judicial bodies that issue confiscation orders proceeds from crime.The insurance sector inRussiais represented by its three main entities: insurance organizations, insurance brokers, and mutual insurance societies. A significant quantitative share of the market is occupied by insurance organizations, whose services are in turn an increasingly popular tool for legalization.The article is researched the insurance sector in Russia, analyzed the main trends of the sector development, suggested a methodological basis for record the participation of the insurance sector in the money laundering, also identified the problems associated with process of implementation of internal control in the field of AML/CFT. The author also presents typical schemes for the laundering of proceeds from crimes related to insurance companies.

IT in the Law

2004 ◽  
Vol 4 (3) ◽  
pp. 201-202
Author(s):  
Jo Tomlinson ◽  
Irwin Mitchell
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Information Services ◽  
Data Warehouses ◽  
Audit Trail ◽  
Complete Set ◽  
Proceeds Of Crime ◽  
The Law

OneSource Information Services has recently launched their Synergy Solution anti-money laundering service. The service addresses the additional requirements raised by the Money Laundering Regulations and Proceeds of Crime Act, which demand that advisors and financial institutions have sufficient processes in place to identify likely money laundering activities. The service lets the user simply type in a name, the complete set of OneSource's data warehouses are searched, and the result is a report complete with an audit trail (for compliance purposes). www.onesource.com.

scholarly journals Combating the laundering of proceeds of crime in the United Kingdom: an analysis of the Criminal Finances Act 2017

Amicus Curiae ◽  
2019 ◽  
pp. 43-48
Author(s):  
Sirajo Yakubu
Keyword(s):  
United Kingdom ◽  
Money Laundering ◽  
Economic Crime ◽  
Financial Crime ◽  
The United Kingdom ◽  
Proceeds Of Crime ◽  
The Uk ◽  
Suspicious Activity

In this article Dr Sirajo Yakubu (Researcher and consultant in Economic Crime) analyses the amendments the Criminal Finances Act 2017 in the UK made to the Proceeds of Crime Act 2002. The author focuses analysis on: suspicious activity reports, sharing of information among bodies in the regulated sector, and the newly introduced law on unexplained wealth orders (UWOs). Index keywords: Economic crime, financial crime, anti-money laundering, United Kingdom

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