Strategies for preventing illicit financial flows in developing countries

2020 ◽  
Vol 23 (3) ◽  
pp. 601-608
Author(s):  
Bello Umar ◽  
Martins Mustapha Abu ◽  
Zayyanu Mohammed
Keyword(s):  
Developing Countries ◽  
Task Force ◽  
Journal Articles ◽  
Financial Flows ◽  
Content Type ◽  
Effective Strategies ◽  
Beneficial Ownership ◽  
Assessment Techniques ◽  
Illicit Financial Flows ◽  
Financing Of Terrorism

Purpose This paper aims to critically review the strategies for prevention of illicit financial flows to and from developing countries with a view of ascertaining the most effective strategies to be selected and implemented by developing countries to stem the scourge. Design/methodology/approach The peer-reviewed journal articles were studied; those that discussed illicit financial flows were selected and reviewed critically using the systematic quantitative assessment techniques together with an output table. Findings The critical review deduced that enacting effective trade laws, trade regulations, creating a beneficial ownership registry, multinational companies disclosing information on business, automatic exchange of information on tax issues, the Financial Action Task Force 40 guidelines on anti-money laundering and countering financing of terrorism and domestic and international cooperation are the most reliable strategies that should be implemented by developing countries. Research limitations/implications The wide geographic scope of developing countries, use of only high-quality databases that restricted the use of other articles and use of public sector perspective are the limitations for this paper. Originality/value This study is amongst the limited works to discuss the most reliable and effective strategies to prevent illicit financial flows in developing countries.

Impediments affecting the curbing of illicit financial flows of organised crime in developing economies

2019 ◽  
Vol 26 (1) ◽  
pp. 5-21 ◽  
Author(s):  
Emmanuel Sotande
Keyword(s):  
Developing Countries ◽  
Developing Economies ◽  
Task Force ◽  
Organised Crime ◽  
Policy Implications ◽  
Periodic Review ◽  
Financial Flows ◽  
Content Type ◽  
Serious Crime ◽  
Illicit Financial Flows

Purpose The purpose of this paper is to examine the treats hindering war against illicit financial flows of organised crime in developing economies and Nigeria in particular. The examination shows that the impediments facing the fight against money laundering and organised crime financial flows vary from one country to another. It may be lesser in developed economies where most instruments, treaties and best practice recommendations to curb serious crime originated from. However, the impediments against the proceeds of organised crime in developing economies are overwhelming. Design/methodology/approach The research methodology adopted was qualitative analysis. This was applied through the use and analysis of documents and expert interviews. Findings The impediments jeopardising the success against organised crime and other related serious crime financial flows in developing economies are devastating. Consequently, the study offered some policy implications to help mitigate these impediments in developing countries. The dynamics and the phenomena of organised crime business model are operated with ingenious strategies within the global states. Therefore, staying in control of the menace and the threats originated from the organised criminal activities would require periodic review of the global initiatives, standards and strategies deployed by the standard setters to combat organised crime and its financial flows in developing and evolving economies. Additionally, the implementing countries should be carried along and allow to make inputs when such initiatives and standards are being developed. Social implications In Nigeria, there is a clear evidence of “collateral damage” in terms of social justice as result of financial exclusion of many bankable adults of the country that do not possess unique identities for account opening documentation and customer due diligence of the Financial Action Task Force recommendation 10. Originality/value There have been quite a number of studies on organised crime and still fewer have recognised the need to explore the success or failure of combating the proceeds of crime in developing economies. This study provides answer to these gaps by screening associated risks of fighting the proceeds of organised crime in developing countries and Nigeria in particular.

London summit will improve global tax transparency

2016 ◽  
Keyword(s):  
Political Commitment ◽  
Slow Process ◽  
Political Leaders ◽  
Financial Flows ◽  
Content Type ◽  
Beneficial Ownership ◽  
Illicit Financial Flows ◽  
High Level ◽  
New Instruments

Subject Anti-corruption summit outcome. Significance New transparency initiatives at the anti-corruption summit promise to inhibit illicit financial flows. The summit has given political momentum to the traditionally bureaucratic and slow process of implementing anti-corruption conventions, together with creating new instruments. Impacts Transparency over beneficial ownership will make it harder for individuals to avoid tax and will increase scrutiny over financial flows. Nevertheless, corrupt elites and criminal gangs will still have numerous routes through which to channel their money. High-level political commitment to fight corruption will provide a benchmark against which political leaders can be held to account.

Illicit financial flows: HSBC case study

2018 ◽  
Vol 21 (2) ◽  
pp. 231-246 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Banking Sector ◽  
Financial Flows ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Beneficial Ownership ◽  
Illicit Financial Flows ◽  
The Impact

Purpose This paper provides examples of how illicit financial flows (IFFs) are occurring through the formal banking and financial services sector. The purpose of this paper is to explore which elements of anti-money laundering (AML) compliance need to be addressed to strengthen the banking response and reduce the impact of IFFs within the banking sector. Design/methodology/approach The paper uses a number of sources of secondary data including the Swiss leaks data for HSBC and also the Permanent Sub Committee Report on HBUS in the USA, the OECD report on money laundering compliance and Financial Action Task Force (FATF) guidelines on beneficial ownership. It links this information to the relevant IFF reports produced through Global Financial Integrity to highlight the connection between banking AML compliance and IFF transfers through the banking sector. Findings The main findings from the analysis are that banks have a greater legal responsibility towards detecting and reporting suspicious transactions than they would have previously considered. This includes identifying the source and purpose of fund transfers and establishing the beneficial ownership of recipients. Research limitations/implications The research topic is new; therefore, analysis papers and other academic writing on this topic are limited. Practical implications The research paper has identified a number of implications to the banking sector on addressing AML deficiencies, especially the need to improve standards of beneficial ownership verification and customer due diligence (CDD) checks for politically exposed persons. Social implications This paper has implications for the international development and the global banking sector. It will also influence approaches to AML regulation, risk assessment and audit within the broader financial services sector. Originality/value The originality of this paper is the link between the HSBC cases and IFFs and the implications this will have for future AML compliance processes across the banking sector.

FATF mission may find Paraguay corruption worsening

2021 ◽  
Keyword(s):  
Private Sector ◽  
Foreign Investment ◽  
Risk Premium ◽  
Task Force ◽  
Country Image ◽  
Financial Flows ◽  
Content Type ◽  
International Evaluation ◽  
Illicit Financial Flows ◽  
Financial Action Task

Significance The controversial decision coincided with the start of a major international evaluation of Paraguay’s compliance with international guidelines on combatting illicit financial flows. SEPRELAD head Carlos Arregui has admitted that it is by no means certain that Paraguay will pass the Financial Action Task Force (FATF) exam. Impacts Failure to pass would mean a negative ‘country image’, involving a higher risk premium on government foreign borrowing costs. A negative result would lead to reduced foreign investment inflows, something that the private sector is keen to avoid. The Biden administration will step up pressure for greater Paraguayan vigour in combatting corruption.

GREEN OPEN ACCESS IN KENYA: A REVIEW OF THE CONTENT, POLICIES AND USAGE OF INSTITUTIONAL REPOSITORIES

Mousaion ◽  
2016 ◽  
Vol 33 (3) ◽  
pp. 25-54
Author(s):  
Wanyenda Leonard Chilimo
Keyword(s):  
Developing Countries ◽  
Open Access ◽  
Descriptive Study ◽  
Google Scholar ◽  
Research Institutions ◽  
Journal Articles ◽  
Content Type ◽  
Institutional Repositories ◽  
Current State ◽  
Theses And Dissertations

 There is scant research-based evidence on the development and adoption of open access (OA) and institutional repositories (IRs) in Africa, and in Kenya in particular. This article reports on a study that attempted to fill that gap and provide feedback on the various OA projects and advocacy work currently underway in universities and research institutions in Kenya and in other developing countries. The article presents the findings of a descriptive study that set out to evaluate the current state of IRs in Kenya. Webometric approaches and interviews with IR managers were used to collect the data for the study. The findings showed that Kenya has made some progress in adopting OA with a total of 12 IRs currently listed in the Directory of Open Access Repositories (OpenDOAR) and five mandatory self-archiving policies listed in the Registry of Open Access Repositories Mandatory Archiving Policies (ROARMAP). Most of the IRs are owned by universities where theses and dissertations constitute the majority of the content type followed by journal articles. The results on the usage and impact of materials deposited in Kenyan IRs indicated that the most viewed publications in the repositories also received citations in Google Scholar, thereby signifying their impact and importance. The results also showed that there was a considerable interest in Swahili language publications among users of the repositories in Kenya.

scholarly journals Impact of foreign direct investment, remittances and official development assistance on economic growth: panel data approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amna Zardoub ◽  
Faouzi Sboui
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Panel Data ◽  
Direct Investment ◽  
Development Assistance ◽  
Business Environment ◽  
Official Development Assistance ◽  
Financial Flows ◽  
Content Type

PurposeGlobalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This phenomenon corresponds to a subject that can be criticized through its impact on national economies. On the other hand, the world economy is evolving in a liberalized environment in which foreign direct investment plays a fundamental role in the economic development of each country. The advent of financial flows – FDI, remittances and official development assistance – can be a key factor in the development of the economy. The subject of this article is to analyses the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been employed. As part of this work, an attempt was made to use a panel data approach. The results indicate ambiguous effects and confirm the results of previous work.Design/methodology/approachThe authors seek to study the effect of foreign direct investment, remittances and official development assistance (ODA) and some control variables i.e. domestic credit, life expectancy, gross fixed capital formation (GFCF), inflation and three institutional factors on economic growth in developing countries by adopting the panel data methodology. Then, the authors will discuss empirical tests to assess the econometric relevance of the model specification before presenting the analysis of the results and their interpretations that lead to economic policy implications. As part of this work, the authors have rolled panel data for developing countries at an annual frequency during the period from 1990 to 2016. In a first stage of empirical analysis, the authors will carry out a technical study of the heterogeneity test of the individual fixed effects of the countries. This kind of analysis makes it possible to identify the problems retained in the specific choice of econometric modeling to be undertaken in the specificities of the panel data.FindingsThe empirical results validate the hypotheses put forward and indicate the evidence of an ambiguous effect of financial flows on economic growth. The empirical findings from this analysis suggest the use of economic-type solutions to resolve some of the shortcomings encountered in terms of unexpected effects. Governments in these countries should improve the business environment by establishing a framework that further encourages domestic and foreign investment.Originality/valueIn this article, the authors adopt the panel data to study the links between financial flows and economic growth. The authors considered four groups of countries by income.

Challenges in customer due diligence for banks in the UAE

2020 ◽  
Vol 23 (2) ◽  
pp. 527-539
Author(s):  
Dina ElYacoubi
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Business Environment ◽  
Law Firms ◽  
Due Diligence ◽  
Remedial Action ◽  
Content Type ◽  
Narcotics Control ◽  
Financing Of Terrorism ◽  
Customer Due Diligence

Purpose The purpose of this paper is to unpack the customer due diligence (CDD) vulnerabilities and to examine and analyze the UAE specific dynamics that make the country exposed to these threats. This research also intends to put on the table suitable solutions and remedial action steps that the UAE government, regulators and financial institutions (FIs) can adopt. Design/methodology/approach This study is qualitative in nature. Findings Despite the impressive regulatory framework and the satisfactory practices by FIs, there still remains some UAE specific challenges that make it difficult to undertake CDD for certain customers. The challenges that were identified include difficulties in Arabic names, complications in identifying the beneficial owners, impediments in establishing the source of wealth/funds, concerns with politically exposed persons, the increasing cost of compliance that resulted in a pattern of de-risking within FIs. Research limitations/implications The international bodies whose mandate is to formulate the necessary anti-money laundering and combating the financing of terrorism policies and regulations for global implementation together with Association of Certified Anti-Money Laundering Specialists (ACAMS) have published sufficient studies on CDD-related issues in the UAE. Yet on the other hand, very limited literature was found by independent scholars. This paper will, therefore, largely reference publications by Financial Action Task Force, the International Narcotics Control Strategy Report and ACAMS. It will also include works by respected law firms that have operations in the UAE, local publications, government documents, academic papers by the International Monetary Fund and the World Bank, legal journals and others. Originality/value Illicit actors exploit the UAE’s relatively open business environment, a multitude of global banks and exchange houses and global transportation links to undertake illicit financial activity […] the UAE does not have any major anti-money laundering (AML) deficiencies. However, the monitoring of FIs for AML purposes, particularly in the area of CDD, could be improved. This paper unpacks the CDD vulnerabilities and analyzes the UAE specific dynamics that make the country exposed to these threats. This research also puts on the table suitable remedial action steps that the UAE government, regulators and FIs can adopt.

Updates on Hong Kong’s anti-money laundering laws 2020

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Foster Hong-Cheuk Yim ◽  
Ian Philip Lee
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
High Standard ◽  
Case Law ◽  
Evaluation Report ◽  
Content Type ◽  
Financial Centre ◽  
Salient Points ◽  
Financing Of Terrorism ◽  
Mutual Evaluation

Purpose The purpose of this paper is to discuss the latest developments of anti-money laundering (AML) laws in terms of case law and to give meaningful response in relation to certain key findings (KFs) and recommendations by the financial action task force contained in its mutual evaluation report dated September 2019. Design/methodology/approach In terms of AML case law, the authors analyse the latest judgment from the Hong Kong (HK) court of final appeal. In terms of the evaluation report, the authors outline salient points from the KFs and recommendation, commenting on their likelihood of success. Findings With the developments in AML case law and the KFs identified, HK is expected to maintain its high standard in AML/counter financing of terrorism (CFT) compliance. Originality/value A robust AML/CFT regime is the bedrock of HK’s reputable status as an international financial centre. This study seeks to illicit meaningful interactions amongst all stakeholders.

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.

Illicit money flows pose Africa development dilemma

2015 ◽  
Keyword(s):  
African Union ◽  
Financial Flows ◽  
Content Type ◽  
Macroeconomic Fundamentals ◽  
Money Flows ◽  
Commodity Export ◽  
Illicit Financial Flows ◽  
Sub Saharan ◽  
High Level ◽  
Effective Use

Subject Illicit money flows from Africa. Significance Illicit financial flows (IFFs) could cost sub-Saharan African (SSA) states up to 50 billion dollars per year in lost revenues, according to a high-level UN panel. The new report, commissioned by the African Union and SSA finance ministers, highlights the detrimental development consequences of IFFs -- in a context where many states are battling with declining commodity export revenues and rising debt burdens. Impacts In SSA states with weak macroeconomic fundamentals and rising debt servicing costs will exacerbate fiscal losses caused by IFFs. Nevertheless, the attractiveness of bond issuances as a form of cheap capital (with minimal conditions) means further issuances are likely. Yet buyers of SSA paper are likely to become more discerning, making it harder for issuers to borrow on favourable terms. Efforts to curtail poaching will be assisted by drone technology in Southern Africa, but their effective use risks community-level blowback.

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