The determinants of anti-money laundering compliance among the Financial Action Task Force (FATF) member states

2018 ◽  
Vol 26 (3) ◽  
pp. 442-459 ◽  
Author(s):  
Emmanuel Senanu Mekpor ◽  
Anthony Aboagye ◽  
Jonathan Welbeck
Keyword(s):  
Money Laundering ◽  
Banking Sector ◽  
Task Force ◽  
Ordinary Least Squares ◽  
Member States ◽  
Financial Action Task Force ◽  
Content Type ◽  
Regulatory Quality ◽  
Financial Action Task ◽  
Financial Intelligence

Purpose This paper aims to compute a measure for anti-money laundering/counter-financing of terrorism (AML/CFT) compliance and investigate its determinants. Design/methodology/approach Using the Financial Action Task Force (FATF) recommendations and assigning weights to them, the study computes a measure for AML compliance. Further, the determinants of AML compliance were investigated using ordinary least squares (OLS) data of 155 countries between 2004 and 2016. Findings The findings suggest that AML compliance have slightly improved over the years. Further, the OLS regression results show that technology, regulatory quality, bank concentration, trade openness and financial intelligence center significantly determined and improved AML compliance. Practical implications From the findings, it is evident that countries that wish to improve the AML compliance should focus more on technology, regulatory quality, structure of the banking sector, size of the economy and institution of financial intelligence center so as to enhance AML compliance. Originality/value To the best of the author’s knowledge, this paper reveals a first AML/CFT compliance index that measures the cross-country level of AML/CFT compliance from the year 2004 to 2016. Subsequently, this paper adopted an OLS econometric model to identify the key determinants of AML/CFT compliance among member states of FATF.

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.

US will increase Paraguay money-laundering pressures

2019 ◽  
Keyword(s):  
Latin American ◽  
Money Laundering ◽  
Task Force ◽  
Border Area ◽  
Financial Action Task Force ◽  
Content Type ◽  
Lower House ◽  
Financial Action Task

Significance The bill, which now goes to the Lower House, is in line with demands from Gafilat, the Latin American affiliate of the Financial Action Task Force (FATF), which began a long-delayed evaluation of Paraguay’s performance on May 7. This will probably avoid Paraguay returning to the FAFT ‘grey list’ but is unlikely to placate the international financial community. Impacts Abdo Benitez will face an uphill struggle to get anti-corruption legislation through Congress. US pressures will mount with respect to purported terrorism finance in the tri-border area. Lack of progress will complicate relations with the international financial community.

International commercial arbitrator addressing money laundering sua sponte

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Todor Kolarov
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Legal Basis ◽  
Practical Application ◽  
Commercial Arbitration ◽  
Financial Action Task Force ◽  
Content Type ◽  
International Commercial Arbitration ◽  
Financial Action Task

Purpose The purpose of this paper is to evaluate the existing legal basis, and its practical application, of an arbitrator’s competence to raise on her own initiative money laundering issues. Design/methodology/approach The research focusses on presenting the essence of the problem through evaluation of the legal basis for the arbitrators to raise money laundering concerns on their own initiative and the examples of so being done in international commercial arbitration. Findings This paper concludes that arbitrators do not presently have a solid legal basis that authorises them to act sua sponte against money laundering. Originality/value The originality and value of this paper lies in its emphasis on theoretical and practical issues related to money laundering in international commercial arbitration. It argues in favour of an explicit recommendation to be incorporated in the 2012 Recommendations of the Financial Action Task Force (FATF) that international commercial arbitrators address money laundering on their own initiative.

Dampening corruption and money laundering: emissions from soft laws

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ejike Ekwueme
Keyword(s):  
Decision Making ◽  
Money Laundering ◽  
Task Force ◽  
Banking Supervision ◽  
Financial Action Task Force ◽  
Content Type ◽  
Basel Committee ◽  
Financial Action Task ◽  
International Chamber Of Commerce ◽  
Soft Laws

Purpose The purpose of this paper is to bring to the fore that soft laws should be taken very seriously because they have demonstrated their importance in helping to reduce corruption and money laundering. Liberalisation of the markets and globalisation, undoubtedly, enabled the increase in the volume of commercial and economic interactions among natural and legal persons. As a result, the generation of profits and losses are noticeable. However, it became evident that some of the actors involved in corruption endeavour to dock the regulatory radars by way of laundering their illicit wealth. It is as a result of this, that the authorities reacted to checkmate this by way of fashioning out legislations that have cross-border and national characteristics. However, it was as a result of the inadequacies noticeable in the Conventions and their inability to contain the malaise that the soft laws surfaced to fill the lacunae to help dampen the momentum of corruption and money laundering. These significant soft laws include but not limited to the Financial Action Task Force (FATF), Organisation of Economic Development and Cooperation (OECD), Basel Committee on Banking Supervision (BCBS), Wolfsberg Group (WG) and International Chamber of Commerce (ICC). Although reservations were raised as to the composition of their decision-making apparatus, it is evident that countries still adhere to their pronouncements by way of adaptation, and they have made significant contributions in reducing corruption and money laundering. Design/methodology/approach This paper relies on primary legal documentations such as but not limited to the Financial Action Task Force, Basel Committee on Banking Supervision, Organisation of Economic Cooperation and Development, Wolfsberg Group, International Chamber of Commerce, the United Nations Convention on Corruption 2003, the Foreign Corrupt Practices Act 1977 and the United Kingdom Bribery Act 2010. Findings There is undoubtedly glaring indications that soft laws have made very significant impact to slow down the level of corruption and money laundering in many polities. It is evidently clear that most countries usually adapt the nuances of these laws into their domestic legislations in order not to be frozen out from the financial and economic activities of the dominant wider members. Evidentially, some of these countries may have been excluded from the core decision-making apparatus of the organisations with particular reference to mostly the developing countries. On the whole, the soft laws are a welcome relief in view of the impact that they have made. Research limitations/implications This paper is addressed to policy makers who are concerned on the negative implications of the scourge of money laundering and corruption. They should continue to inculcate the emissions that usually come from soft laws when formulating their policies in planning for economic growth. Originality/value The originality of this paper lies on the fact that it is essential that we awaken the importance of soft laws in containing the malaise as it has become evident that excuses have been made that it was forced on some of the recipient participants.

The EU will struggle to crackdown on money laundering

2019 ◽  
Keyword(s):  
Money Laundering ◽  
Direct Investment ◽  
Banking Sector ◽  
Screening Programme ◽  
Task Force ◽  
International Standards ◽  
Content Type ◽  
Financial Action Task ◽  
National Governments ◽  
The Eu

Subject EU money-laundering concerns. Significance On 5 April, Swedbank Chairman Lars Idermark resigned, following criticism of how the bank has handled allegations of money laundering. The allegations follow similar revelations relating to Danske Bank last year. In addition to raising further questions about the integrity of the Nordic banking sector, it also highlights the EU’s continued exposure to money laundering. Impacts Money-laundering scandals suggest that the international standards set by the Financial Action Task Force are inadequately upheld. Such scandals could increase suspicion among voters that national governments and the EU serve the interests of the elite. Further cases of money laundering could undermine the EU’s new foreign direct investment screening programme. Addressing the proportional divergence in the transparency and rules of national regulatory regimes is high on the EU’s agenda.

Using anti-money laundering measures to curb pension fraud in Nigeria

2020 ◽  
Vol 27 (4) ◽  
pp. 1341-1348
Author(s):  
Ehi Eric Esoimeme
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
International Standards ◽  
Next Of Kin ◽  
Financial Action Task Force ◽  
Content Type ◽  
Record Keeping ◽  
Compliance Officers ◽  
Financial Action Task ◽  
High Level

Purpose The purpose of this paper is to propose a new approach to curbing pension fraud in Nigeria. The approach involves the use of anti-money laundering tools, procedures and expertise to advance the fight against pension fraud in Nigeria. The guidance is non-binding and does not override the purview of the National Pension Commission. The intention is to build on the revised procedures on the processing of death benefits and to complement existing circulars and guidelines issued by the National Pension Commission, including in particular the guidelines for compliance officers. Design/methodology/approach The analysis took the form of a desk study, which analyzed various documents and reports, such as the Financial Action Task Force (2012-2018), International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (the FATF Recommendations); the Financial Action Task Force Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing: High Level Principles and Procedures; National Pension Commission Regulations for Compliance Officers; the Joint Money Laundering Steering Group Guidance for the United Kingdom Financial Sector Part I, June 2017 [Amended December 2017] and the Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act/Anti-Money Laundering Examination Manual 2014. Findings This paper determined that a strong due diligence process where the owner of the pension account and the next-of-kin/legal beneficiary are duly identified before the establishment of a business relationship is capable of reducing the risks associated with pension fraud to the barest minimum. This paper also determined that anti-money laundering measures, such as record keeping, suspicious transactions reporting, training for anti-fraud/money laundering compliance and an independent audit of systems and controls can help curb pension fraud. Research limitations/implications Pension fraud involves the use of deceit or misrepresentation in connection with a pension claim. There are many different kinds of pension fraud, but the type where the fraud is aimed at stealing a person’s pension funds is what this paper is concerned with. Originality/value Although most publications on pension fraud are focused on anti-fraud measures, this paper focuses on the anti-money laundering measures which can be used by Pension Fund Administrators to curb pension fraud.

Smuggling report fuels Paraguay corruption concerns

2021 ◽  
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Task Force ◽  
Financial Action Task Force ◽  
Content Type ◽  
Financial Action Task ◽  
High Level

Significance The response from Tabesa and the finance ministry was disproportionately hostile. That may be linked to a much-delayed in-country review of illicit activities that is being conducted by Gafilat, the regional affiliate of the international Financial Action Task Force (FATF). Impacts The contraband cigarette trade is expanding the influence of Brazilian crime gangs in Paraguay. Reports of tax evasion and money-laundering in the sector will draw renewed scrutiny of high-level corruption. Failure to implement transparency measures will deter legitimate inward investment.

Poor enforcement hinders Mexico's anti-laundering laws

2015 ◽  
Keyword(s):  
Money Laundering ◽  
Banking Sector ◽  
Task Force ◽  
Unintended Consequences ◽  
Federal Law ◽  
Property Development ◽  
Content Type ◽  
Car Sales ◽  
Financial Intelligence ◽  
Financial Transactions

Subject Anti-money laundering efforts. Significance July 17 will mark two years since the 'Federal Law for the Prevention and Identification of Operations with Illicit Resources' came into force. The law regulates sectors considered susceptible to money laundering, such as property development, construction, car sales and art sales which were left out of earlier legislation on financial transactions. The provisions -- enacted by the President Enrique Pena Nieto government -- were welcomed by international regulators such as the Financial Action Task Force, which, in its February 2014 evaluation report, said that Mexico had successfully addressed most of its outstanding recommendations. Impacts High demand for illegal narcotics will continue to fuel money laundering despite improved laws. Anti-laundering legislation will have mixed effects in both financial and non-financial sectors. The finance ministry and Financial Intelligence Unit are receptive to feedback, amending regulation accordingly. The legislation's unintended consequences in the banking sector have been compounded by stringent foreign anti-laundering provisions.

Iran will equivocate over money laundering

2018 ◽  
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Financial System ◽  
Foreign Minister ◽  
Financial Action Task Force ◽  
Content Type ◽  
Terrorism Financing ◽  
Financial Action Task ◽  
Global Financial System ◽  
Combat Money Laundering

Significance The Financial Action Task Force (FATF), a global body that works to combat money laundering and terrorism financing, has threatened to impose countermeasures on Iran in February 2019 if it does not comply with mandated reforms. This would effectively cut Iran out of the global financial system. Impacts Political considerations by FATF's member states will contribute to its decision. Israel, recently appointed an FATF member, will push for anti-Iran measures. An impeachment attempt against the foreign minister will likely fail.

Ratify and comply: a pathway for Japan to follow the FATF recommendation 35

2018 ◽  
Vol 21 (1) ◽  
pp. 71-88 ◽  
Author(s):  
Akira Matsuoka
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
The Novel ◽  
Legal Analysis ◽  
Financial Action Task Force ◽  
Content Type ◽  
Financial Action Task ◽  
Strategic Solution

Purpose To identify the reason of Japan not complying with the Financial Action Task Force (FATF) recommendation 35 and suggesting a strategic solution to overcoming the barrier. Design/methodology/approach Through contextual, historical, and legal analysis of the anti-money laundering (AML) measures in Japan. Findings This paper implies that less flexible mindsets in stone of major players in the field of AML measures in Japan are the fundamental barrier for Japan not complying with the FATF Recommendation 35, while this paper suggests better realistic ways to address the barrier. Originality/value The novel point of this paper is that this paper illustriously uncovers the mindsets of the major players pertaining to the Japanese AML measures in a very illustrative way, points out the underlying true barrier, and describes a useful strategy desperately needed to address the barrier.

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