Estimating the destination of Mexican-based laundered funds: an application of the modified Walker-Unger model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Juan Roman ◽  
Ana Machuca ◽  
Thomas Schaefer
Keyword(s):  
Money Laundering ◽  
Gross National Product ◽  
Physical Distance ◽  
Economic Effects ◽  
Content Type ◽  
Banking Secrecy ◽  
Financial Activity ◽  
Time Period ◽  
Money Launderer ◽  
Practical Implications

Purpose This study aims to apply the modified Walker-Unger model to show the degree of attractiveness of a country for Mexican-based money launderers to send their illicit funds for the 2000–2015 time period. Design/methodology/approach The modified Walker-Unger model is used to conduct the analysis, as it combines several independent variables related to an illicit financial activity. These allow the researcher to investigate the attractiveness of a market to money launderers and the possible economic effects of money laundering. In total, 13 categories of indicators were used, namely, gross national product per capita; banking secrecy; government attitude; society for worldwide interbank financial telecommunication membership; financial deposits; conflict; corruption; Egmont group membership; language; trade; culture, colonial background; and physical distance. Findings Model results suggest the preferred destinations for Mexican-based money launderers from 2000 to 2015 were Bermuda (i.e. from 2000–2004), Canada (i.e. in 2005 and 2006) and Monaco (i.e. from 2007–2015). Research limitations/implications Timing and availability of reliable data after 2015. Practical implications Aids in continuing to empirically validate the Walker-Unger model. There is little literature on models that quantify money laundering activity. Social implications May aid policymakers in targeting anti-money laundering policy to more relevant countries. Originality/value The first empirical investigation that looks to quantify money launderer activity in Mexico. Contributes to the limited literature of quantitative investigations on money laundering.

Money laundering through raw diamonds

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
German Speaking ◽  
Three Stages ◽  
Practical Implications ◽  
Combat Money Laundering

Purpose This paper aims to illustrate how illegally obtained funds are laundered through raw diamonds in Austria, Germany, Liechtenstein and Switzerland. Design/methodology/approach To identify specific money laundering techniques involving raw diamonds, this study used a qualitative content analysis of data collected from 60 semi-standardized interviews with both criminals and prevention experts and a quantitative survey of 200 compliance officers. Findings Raw diamonds are extraordinarily suitable for money laundering in European German-speaking countries. In particular, they may be used in all three stages of the laundering process, namely, placement, layering and integration. Research limitations/implications Because the qualitative findings are based on semi-standardized interviews, their insights are limited to the perspectives of the 60 interviewees. Practical implications Identifying gaps in existing anti-money laundering mechanisms should provide compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate. Originality/value While prior studies focus on the methods used by organizations to combat money laundering and how to improve anti-money laundering measures, this paper investigates how money launderers operate to avoid detection, thereby illustrating authentic experiences. Its findings provide valuable insights into the minds of money launderers and combines criminal perspective with that of prevention experts.

FINRA’s disciplinary actions in 2017: increased restitution ordered with minimal changes in number of cases

2018 ◽  
Vol 19 (2) ◽  
pp. 19-23
Author(s):  
Brian Rubin ◽  
Adam Pollet
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Disciplinary Actions ◽  
Financial Industry ◽  
Electronic Communications ◽  
Content Type ◽  
The Past ◽  
Expert Analysis ◽  
Research Analysts ◽  
Practical Implications

Purpose The purpose of this paper is to analyze the Financial Industry Regulatory Authority’s (FINRA) 2017 disciplinary actions, the issues that resulted in the most significant fines and restitution and the emerging enforcement trends from 2017 and beyond. Design/methodology/approach The approach of this paper discusses the disciplinary actions in 2017 and prior years, details the top 2017 enforcement issues measured by total fines assessed, including anti-money laundering, trade reporting, electronic communications, books and records, research analysts and research reports, and explains current enforcement trends, including restitution, suitability cases and technological issues. Findings In 2017, restitution more than doubled from the prior year, resulting in the fourth highest total sanctions (fines combined with restitution and disgorgement) assessed by FINRA over the past 10 years. Practical implications Firms and their representatives should heed the trends in both the substantial restitution FINRA is ordering and the related enforcement issues in the cases FINRA has brought. Originality/value This paper provides expert analysis and guidance from experienced securities enforcement lawyers.

scholarly journals The importance of specificity in occupation‐based social classifications

2008 ◽  
Vol 28 (5/6) ◽  
pp. 179-192 ◽  
Author(s):  
Paul S. Lambert ◽  
Koon Leai Larry Tan ◽  
Kenneth Prandy ◽  
Vernon Gayle ◽  
Manfred Max Bergman
Keyword(s):  
Design Methodology ◽  
Content Type ◽  
Service Grid ◽  
Theoretical Perspectives ◽  
Time Period ◽  
Technological Developments ◽  
Specific Occupation ◽  
Data Environment ◽  
And Gender ◽  
Practical Implications

PurposeThis paper aims to present reasons why social classifications which use occupations should seek to adopt “specific” approaches which are tailored to the country, time period and gender of the subjects under study.Design/methodology/approachThe relative motivations for adopting a specific approach to social classifications are discussed and theoretical perspectives on specificity and empirical evidence on the contribution of specific approaches are reviewed. Also the practical costs of implementing specific social classifications are evaluated, and the authors' development of the “GEODE” data service (grid‐enabled occupational data environment), which seeks to assist this process, is discussed.FindingsSpecific approaches make a non‐trivial difference to the conclusions drawn from analyses of occupation‐based social classifications. It is argued that the GEODE service has reduced the practical challenges of implementing specific measures.Research limitations/implicationsThere remain conceptual and pragmatic challenges in working with specific occupation‐based social classifications. Non‐specific (“universal”) measures are adequate for many purposes.Practical implicationsThe paper argues that there are few excuses for ignoring specific occupation‐based social classifications.Originality/valueThe paper demonstrates that recent technological developments have shifted the balance in the long‐standing debate between universal and specific approaches to occupation‐based social classifications.

The first two decades of Circular Economy in the 21st century: a bibliographic review

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
João Francisco Pinto Anaruma ◽  
Jorge Henrique Caldeira de Oliveira ◽  
Francisco Anaruma Filho ◽  
Wesley Ricardo de Souza Freitas ◽  
Adriano Alves Teixeira
Keyword(s):  
21St Century ◽  
Circular Economy ◽  
Review Of Literature ◽  
Content Type ◽  
Time Period ◽  
Number Of Publications ◽  
Two Stages ◽  
Academic Area ◽  
Practical Implications ◽  
Made In

PurposeThe purpose of this paper is to analyze and map the main areas of the Circular Economy literature of the first two decades of 21st century, offering a broad vision about the growth of the theme during these years.Design/methodology/approachThe research was divided into two stages: the first was a systematic review of literature and the second consisted on generation and analysis of bibliographic maps.FindingsThe publication indicates the prominence of China and European Union countries in the production of articles about Circular Economy. Furthermore, the topic is restricted to academic area, and that research on Circular Economy is still very focused on theory studies, even with exponential growth in the number of published articles about the theme since 2015. Finally, it also provides a collection of information as the principal authors, the most cited publications, citations, co-citations and countries that have most published beyond which are the most discussed topics.Research limitations/implicationsA possible limitation of the research is that it was performed only in the Scopus database. It may be suggested as future searches that other databases are included as well, and another suggestion is to reduce the time period between research samples due to the exponential increase in the number of publications and topics discussed lately.Practical implicationsThe results of this paper can guide future researches about the development of Circular Economy during the next decades or years and serve as a facilitator for researchers and for managers that want to know more about the topic.Originality/valueA mapping of the principal players and main discussions about Circular Economy made in the first two decades of the 21st century and an analysis about the growth and changes about the theme.

Tax evasion and money laundering: a complete framework

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Deen Kemsley ◽  
Sean A. Kemsley ◽  
Frank T. Morgan
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Task Force ◽  
Regulatory Agencies ◽  
Content Type ◽  
Single Process ◽  
Financial Action Task ◽  
Tax Savings ◽  
Practical Implications ◽  
Complete Framework

Purpose This paper aims to define the fundamental nexus between income tax evasion and money laundering. The G7 Financial Action Task Force (FATF) designates tax evasion as a predicate offense for money laundering. We determine whether this designation is complete from a conceptual standpoint, or whether there is a stronger connection between tax evasion and money laundering. Design/methodology/approach This paper applies the FATF definition for money laundering – as well as generally accepted definitions for tax evasion and for a standard predicate offense – to identify the necessary conditions for each crime. This paper then uses these conditions to test opposing hypotheses regarding the nexus between tax evasion and money laundering. Findings This paper demonstrates that tax evasion does not meet the conditions for a standard predicate offense, and treating it as if it were a standard predicate could be problematic in practice. Instead, it is concluded that the FATF’s predicate label for tax evasion, together with tax evasion methods and objectives, imply that all tax evasion constitutes money laundering. In a single process, tax evasion generates both criminal tax savings and launders those criminal proceeds by concealing or disguising their unlawful origin. Practical implications The FATF could strengthen its framework by explicitly defining all tax evasion as money laundering. This would enable regulatory agencies to draw upon the full combined resources dedicated to either offense. Originality/value The analysis demonstrates that tax evasion completely incorporates money laundering as currently defined by the FATF.

Does holding offshore jurisdictions to higher AML standards really assist in preventing money laundering?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Andrew James Perkins
Keyword(s):  
Money Laundering ◽  
Secondary Data ◽  
Cayman Islands ◽  
Content Type ◽  
Task Forces ◽  
Financial Crimes ◽  
Financial Action Task ◽  
Practical Implications ◽  
Combat Money Laundering

Purpose This paper aims to contend that when tackling financial crimes such as money laundering and terrorist financing, international regulators are seeking to hold offshore jurisdictions such as the Cayman Islands to higher standards and that this detracts from the pursuit of detecting and prosecuting money launders. Design/methodology/approach This paper will deal with the following perceived issues: firstly, to offshore jurisdictions as a concept; secondly, to outline the efforts made by the Cayman Islands to combat money laundering and to rate these changes against Financial Action Task Forces’ (FATAF’s) technical criteria; thirdly, to demonstrate that the Cayman Islands is among some of the world’s top jurisdictions for compliance with FATAF’s standards; and finally, to examine whether greylisting was necessary and to comment upon whether efforts by international regulators to hold offshore jurisdictions to higher standards detracts from the actual prosecution of money laundering within the jurisdiction. Findings Greylisting the Cayman Islands in these authors’ view was something that should have never happened; the Cayman Islands is being held to standards far beyond what is expected in an onshore jurisdiction. There is a need for harmonisation in respect of international anti money laundering rules and regulations to shift the tone to prosecution and investigation of offences rather than on rating jurisdictions technical compliance with procedural rules where states have a workable anti-money laundering (AML) regime. Research limitations/implications The implications of this research are to show that offshore jurisdictions are being held by FATAF and other international regulators to higher AML standards than their onshore counterparties. Practical implications The author hopes that this paper will begin the debate as to whether FATAF needs to give reasons as to why offshore jurisdictions are held to higher standards and whether it needs to begin to contemplate higher onshore standards. Originality/value This is an original piece of research evaluating the effect of FATAF's reporting on offshore jurisdictions with a case study involving primary and secondary data in relation to the Cayman Islands.

Money laundering in a CBDC world: a game of cats and mice

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Daniel Dupuis ◽  
Kimberly Gleason ◽  
Zhijie Wang
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Economic Activity ◽  
Design Methodology ◽  
Central Banks ◽  
Content Type ◽  
Digital Currency ◽  
Individual Privacy ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this study is to describe the present taxonomy of money, summarize potential central bank digital currency (CBDC) regimes that central banks worldwide could adopt and explore the implications of the introduction of each of these CDBC regimes for money laundering through the lens of the regulatory dialectic theory. Design/methodology/approach The methodology used in the analysis of significant recent events regarding the progress of central banks in establishing a CBDC and the implications for money laundering under a CBDC regime. This paper also reviews the literature regarding the Regulatory Dialectic to highlight potential innovative responses of money launderers to circumvent the controls generated through the implementation of a CBDC. Findings This study examines the impact of Kane’s regulatory dialectic paradigm on the feasibility of money laundering under a CBDC regime and identifies potential avenues that would be available for those seeking to launder money, based on the form a CBDC would take. Research limitations/implications This paper is unable as of yet to empirically evaluate anti-money laundering (AML) tactics under a CBDC regime as it has not yet been fully implemented. Practical implications Many central banks worldwide are evaluating the structure of and introduction of a CBDC. There are a number of forms that a CBDC could take, each of which has implications for individual privacy and for entities involved in AML efforts within financial institutions and the regulatory community. The paper has implications for AML experts who are considering how AML procedures would change under a CBDC regime. Social implications The regulatory dialectic predicts that regulatory response reactive, rather than proactive when it comes to socially undesirable phenomena. As central banks and governments seek to divert economic activity away from the laundering of the proceeds of illicit activity, there are tradeoffs in terms of a loss of privacy. The regulatory dialectic predicts a corresponding innovative response of those who wish to undermine the controls generated through the establishment of a CBDC. Originality/value To the authors’ knowledge, this is the first paper to explore the impact of a potential CBDC on money laundering and the potential innovative circumventions within the paradigm of the Regulatory Dialectic.

An expectation-performance gap between money laundering reporting officers and their directors – evidence from Germany

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lars Haffke
Keyword(s):  
Money Laundering ◽  
Dyadic Relationship ◽  
Performance Gap ◽  
Content Type ◽  
Electronic Survey ◽  
The Status ◽  
Liability Risk ◽  
And Performance ◽  
Communication Needs ◽  
Practical Implications

Purpose Money Laundering Reporting Officers (MLROs) carry out day-to-day anti-money laundering (AML) tasks while directors ultimately remain responsible for AML compliance. Therefore, directors’ expectations of what their MLROs do should ideally coincide with what their actual tasks to minimise liability risk. This paper aims to test for gaps between MLROs and their directors in terms of knowledge, expectations and performance of AML tasks. Likewise, it is researched whether MLROs and directors communicate well with regard to MLROs’ tasks. Design/methodology/approach This paper first develops a model for analysing the dyadic relationship between MLROs and their directors, based on the audit expectation-performance gap. Second, a paired electronic survey of MLROs and directors of German companies was conducted in autumn 2020, testing for participants’ knowledge, expectations and performance of possible AML tasks (n = 136 pairs). Findings While there is no knowledge or performance gap among MLROs and directors, expectations among them are partially unreasonable and their communication needs to be improved. Additionally, this study suggests that MLROs of German non-financial businesses are less knowledgeable, perform AML duties more poorly, and communicate less effectively with their directors. Practical implications Training of MLROs and communication with their directors need to be improved. Especially in the non-financial sector, action is urgently required. Originality/value This paper reports the results of the first paired survey of MLROs and their directors, offering unique insights into their relationship and the status of private AML efforts.

Beyond placement, layering and integration – the perception of trade-based money laundering risk in UK financial services

2019 ◽  
Vol 22 (4) ◽  
pp. 614-625 ◽  
Author(s):  
Mario Menz
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Design Methodology ◽  
Banking Sector ◽  
Trade Finance ◽  
Content Type ◽  
Proceeds Of Crime ◽  
The Uk ◽  
Practical Implications ◽  
Insight Into

Purpose The purpose of this study was to investigate the perception of trade-based money laundering in Letters of Credit (“L/C”) transactions among trade finance practitioners in the UK banking sector and to compare it to the perception of the same risk by the Financial Conduct Authority (“FCA”), the regulator of the UK’s banking sector. Design/methodology A survey was used to carry out research among financial services professionals engaged in trade finance in the UK. Findings This paper contributes to the existing literature in a number of ways. First, it investigates the perception of trade-based money laundering risk from the perspective of financial services professionals, which has not previously been done. Second, it argues that the perception of trade-based money laundering in financial services is overly focussed on placement, layering and integration, and that the full extent of the offence under the Proceeds of Crime Act 2002 is less well known. It further found that financial services firms need to improve their understanding of the nature of trade-based money laundering under UK law. Practical implications This study argues that the financial services sector’s perception of trade-based money laundering risk in trade finance is underdeveloped and makes suggestions on how to improve it. Originality/value It provided unique insight into the perception of trade-based money laundering risk among financial services professionals.

Subjective probability and financial valuation: contrasting paradigms

2015 ◽  
Vol 13 (1) ◽  
pp. 20-38 ◽  
Author(s):  
Masudul Choudhury
Keyword(s):  
Subjective Probability ◽  
Financial Model ◽  
Content Type ◽  
Financial Valuation ◽  
Valuation Model ◽  
Time Period ◽  
Valuation Field ◽  
Unity Of Knowledge ◽  
Raphson Method ◽  
Practical Implications

Purpose – The purpose of this paper is to theorize the existing idea of subjective probability a la Keynes’s Treatise on Probability Theory. Then to show that, under the especial kind of financial valuation model in the absence of interest rate and speculation, subjective probability is not of a major concern in Islamic financial theory. Design/methodology/approach – The topic is of an epistemological nature premised on the Islamic unity of knowledge and the world-system with special attention given to the formulation of the financial model for evaluation under its unitary characteristic at each time period of financial evaluation. The approach, while being epistemological, is also mathematical in the financial valuation field. Findings – Mathematical calculation of approximate solution using Newton-Raphson method applied to Islamic financial valuation model with yields, evolutionary learning and of the nature of unitary discursive experience at every stage of valuation taken continuously establishes the innovative method approximating subjective probability of events to limiting negligible field. Practical implications – The nature and importance of Islamic valuation models brings about the implication of diversification of risk and production diversification that altogether underlie the limiting phenomenon of subjective probability in a narrow closure. Social implications – The epistemological implication of unity of knowledge and unity of the specific events during the valuation experience causes the socio-economic system to gain increasing levels of stability and certainty while subjective probability narrows down in its small closure. Originality/value – This paper is boldly original in the light of its methodology that addresses the much pursued topic of subjective probability in the Islamic heterodox economic and financial field.

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