Factors influencing anti-money laundering regulatory approaches towards casinos and cryptocurrencies in Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Zahurul Haq ◽  
Zainal Amin Ayub ◽  
Zuryati Mohamed Yusoff ◽  
Md Abdul Awal Khan
Keyword(s):  
Money Laundering ◽  
Legal Status ◽  
New Technologies ◽  
Task Force ◽  
Asia Pacific ◽  
Apparent Lack ◽  
Content Type ◽  
Real Nature ◽  
Factors Influencing ◽  
Financing Of Terrorism

Purpose This paper aims to critically explore the factors influencing the regulation of gambling and cryptocurrencies as part of anti-money laundering (AML) initiatives in Bangladesh. As a member of the Asia/Pacific Group on money laundering, Bangladesh must adopt a risk-based approach to regulate these entities. Design/methodology/approach This study applied an exploratory design and investigated the real nature of the challenge Bangladesh facing in adopting a risk-based approach to regulate gambling and cryptocurrencies. Findings This study demonstrates that current regulatory responses towards gambling and cryptocurrencies in Bangladesh are largely influenced by passive wait-and-see policy instead of a proactive risk-based approach, a measure mandated by the Financial Action Task Force (FATF). It demonstrates that these financial entities, which are poorly regulated because of their unclear legal status in Bangladesh and the regulator’s apparent lack of understanding of the type of threats they pose, may facilitate money laundering. Effective risk-based regulation is required to control potential risks. Research limitations/implications This paper focuses on two specific areas –gambling and cryptocurrencies – which are linked to two specific FATF Recommendations: designated non-financial businesses and professions (DNFBPs) and new technologies. Further research is required to investigate the concern from the perspective of other entities. Practical implications The results of this study will help inform policymakers about ways in which current regulatory approaches may need to be modified to better combat money laundering and financing of terrorism. Originality/value According to the authors’ knowledge, this is the first study aiming to explore challenges Bangladesh confronts in implementing a risk-based approach for DNFBPs and new technologies. Therefore, it provides important insights into the dilemma regulators facing in implementing global AML standards within their traditional legislative and regulatory framework.

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.

Institutionalization of risk management framework in Islamic NGOs for suppressing terrorism financing

2014 ◽  
Vol 17 (1) ◽  
pp. 96-109 ◽  
Author(s):  
Radiah Othman ◽  
Rashid Ameer
Keyword(s):  
Risk Management ◽  
Money Laundering ◽  
Process Model ◽  
Task Force ◽  
Political Process ◽  
Asia Pacific ◽  
Content Type ◽  
Management Framework ◽  
Risk Management Framework ◽  
Terrorism Financing

Purpose – The aim of this paper is to propose solutions for improving internal controls and transparency to alleviate concerns of international community over alleged linked with terrorist groups. Design/methodology/approach – The authors explore the counter-insurgency theory and political process model to explain the current state of counter-terrorism activities aimed at Islamic NGOs after 9/11. Findings – The authors believe the idea of money flow disruption to be of greater importance than freezing the accounts to suppress terrorism financing. Practical implications – Islamic NGOs established for philanthropic and humanitarian aid in third world Muslim countries have been accused of being involved in terrorism financing. This revelation is to the disadvantage of the donors who do not channel their donations for such activities. The authors propose risk management framework useful at operational level to detect and prevent welfare activities financing warfare activities. Originality/value – The proposed risk management framework is to complement various regional and international initiatives championed by Asia/Pacific Group on Money Laundering and Financial Action Task Force to combat money laundering and terrorist financing.

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.

OPICAL ISSUES OF THE FATF’s INTERNATIONAL LEGAL STATUS

2020 ◽  
pp. 144-153
Author(s):  
Denis A. Alexander ◽  
Keyword(s):  
International Law ◽  
Money Laundering ◽  
International Organizations ◽  
Legal Status ◽  
Task Force ◽  
Point Of View ◽  
International Treaties ◽  
Intergovernmental Organization ◽  
The Law ◽  
Financing Of Terrorism

Anti-money laundering and combating the financing of terrorism (AML/CFT) is a complex area in which many state authorities of the countries of the world are involved, as well as numerous international organizations and institutions. One of these international institutions is the Financial Action Task Force on Money Laundering (FATF), the main organization in this area. There are many disputes among the scientific community and practitioners regarding its legal status. It is not an international (intergovernmental) organization under international law. But is it worth it to acquire such a status and what are the consequences of its acceptance / non-acceptance? This article will analyze in detail the legal status of the FATF from the point of view of international law (the law of international organizations, the law of international treaties, the law of international customs), as well as study other issues directly related to it, which may affect the international community's decision to change its status, for example the fact of possible politicization of the FATF due to its informal status.

Money-laundering risk and preventive measures in Pakistan

2020 ◽  
Vol 23 (3) ◽  
pp. 699-714
Author(s):  
Irfan Hassan Jaffery ◽  
Riffat Abdul Latif Mughal
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
New Technology ◽  
Control Measures ◽  
Due Diligence ◽  
Content Type ◽  
Record Keeping ◽  
Financing Of Terrorism ◽  
Customer Due Diligence ◽  
The Impact

Purpose The purpose of this paper is to examine the effectiveness of anti-money laundering/combating of financing of terrorism (AML/CFT) measures in Pakistan. Key variables of AML/CFT regulations of Pakistan are used. This study explores the impact of customer due diligence, record keeping, wire transfers, correspondent banking, reporting of transactions, new technology and internal controls/compliance/trainings on money-laundering risk. Design/methodology/approach Data is collected with the help of questionnaires developed in light of Financial Actions Task Force (FATF) recommendations and the AML/CFT regulations of Pakistan. Findings Results show that customer due diligence, correspondent banking and new technology may help control money-laundering risk in Pakistan, whereas impact of record keeping, wire transfers and reporting of transactions did not have an effect on money-laundering risk. This study suggests a better implementation of these measures. Research limitations/implications The current study was limited to Pakistani banks. For more conclusive results, future studies should replicate similar studies in other countries. Practical implications Findings of this study may help the State Bank of Pakistan in taking measures to simplify the process of implementing FATF rules and regulations regarding AML/CFT, regular monitoring and trainings to the staff of banks and development finance institutions in customer due diligence, correspondent banking and new technology. Further, it helps to take appropriate measures in resolving banks-specific issues related to AML/CFT. Social implications Effective AML/CFT control measures would strengthen socio-economic growth in a country. Further, formalization, compliance and integrity would eliminate money laundering risk. It would create an economy that works with equity and promotes transparency. Originality/value This research paper supports implementation of AML/CFT regulations, proper monitoring and novel supervision of banks.

Deficient regimes of anti-money laundering and countering the financing of terrorism

2020 ◽  
Vol 23 (3) ◽  
pp. 663-675
Author(s):  
Sisira Dharmasri Jayasekara
Keyword(s):  
Economic Impact ◽  
Money Laundering ◽  
Risk Premium ◽  
Task Force ◽  
Short Term ◽  
Economic Implications ◽  
Content Type ◽  
Financing Of Terrorism ◽  
Mutual Evaluation

Purpose The purposes of this paper are to discuss the short-term economic impact of the jurisdictions that have been identified as deficient countries in terms of the regime of anti-money laundering and countering the financing of terrorism and to identify the probable reasons for the poor results of mutual evaluation reports of the deficient countries. Design/methodology/approach This study uses a case study approach to discuss the short-term economic impact of the countries that are under the International Co-operation Review Group (ICRG) process due to poor results of mutual evaluation reports. The sample of countries for the study was selected based on the Financial Action Task Force (FATF) listing as of November 30, 2019. The objectives of the study are expected to be achieved by discussing the issues of these jurisdictions based on publicly available information. However, this study will not consider the long-term economic impact on the countries due to the observed short-term nature of the ICRG process. Findings This analysis reveals that the ICRG process affects countries in two different perspectives. First, there are implications on the financial system of a deficient country as a result of identifying it as a high-risk country. Second, there are some other forms of economic implications due to the rigorous ICRG process. The downgrading of the sovereign rating by international and credit rating agencies is one of such implications that result in adding a risk premium to the country. This results in increased transaction costs and borrowing costs of deficient countries. Besides, it appears that the ICRG process impacts the capital and currency markets of deficient countries as a result of enhanced due diligence process on fund transfers and limitations in corresponding banking relationships. However, despite these difficulties, some countries have been identified more than once for the ICRG process. Therefore, such countries have to take measures to strengthen the anti-money laundering and countering the financing of terrorism (AML/CFT) regime to avoid future listing. However, long-term sustainability of the countries that were removed from the FATF grey-listing is also questionable under the current FATF methodology of evaluating countries because of the level of effectiveness depends on the judgment of assessors on the risk and context of countries rather the technical compliance. Research limitations/implications This study was limited to the countries that were in the grey list as of November 30, 2019. The countries exited from the list have not been considered for the study. Originality/value This paper is an original work done by the author by discussing the issues of the ICRG process in respect of deficient countries in view of strengthening the AML/CFT regimes of such countries.

Panama faces FATF greylisting

2019 ◽  
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Tax Evasion ◽  
Task Force ◽  
Capital Flight ◽  
Content Type ◽  
National Assembly ◽  
Legislative Proposal ◽  
Financial Action Task ◽  
Financing Of Terrorism

Significance The move comes despite the passing of a long-delayed legislative proposal by Panama’s National Assembly on January 31 to make tax evasion a criminal (rather than administrative) offence -- the latest in a series of efforts to improve Panama’s image. The Financial Action Task Force (FATF) -- the international standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT) -- will publish an assessment of Panama this month, before deciding whether to 'greylist' it around June. Impacts Poor AML controls leave Panama vulnerable to the entrance of funds from the expanding cocaine trade in neighbouring Colombia. Greylisting would hit local financial institutions' access to US correspondent banks, raising international transaction and transfer costs. Capital flight is possible by financial institutions seeking to avoid international regulatory risks associated with Panamanian operations.

Comprehensive cross-border declaration system as money-laundering prevention mechanism

2017 ◽  
Vol 20 (3) ◽  
pp. 292-300
Author(s):  
Salwa Zolkaflil ◽  
Normah Omar ◽  
Sharifah Nazatul Faiza Syed Mustapha Nazri
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Asia Pacific ◽  
Evaluation Report ◽  
Content Type ◽  
Cross Border ◽  
Future Improvement ◽  
Financial Action Task ◽  
Mutual Evaluation

Purpose This study aims to discuss the Financial Action Task Force (FATF) Special Recommendation IX (SR IX) and the importance of complying with the recommendation, which focuses on cross-border declaration or disclosure with the objective to detect and prevent illicit cross-border transportation of cash and bearer negotiable instruments (BNIs). This study also looks into compliance ratings of Asia Pacific Group (APG) 40 countries on the FATF SR IX. Design/methodology/approach This study reviews the mutual evaluation reports issued by APG on money laundering from 2006 to 2012. Based on the mutual evaluation reports, this study also looks into recommendations and comments given by respective panels. The compliance ratings together with panel’s recommendations and comments compiled in this study will be helpful to relevant authorities for future improvement. Findings Complying to FATF SR IX helps relevant authorities in detecting and preventing illicit from cross-border transportation of cash and BNIs. Out of 40, only two countries received compliant rating, which shows the need of improvement to ensure that the country is compliant on FATF SR IX. Research limitations/implications This study is limited to the panel’s reviews and recommendations on mutual evaluation report and only focuses on FATF SR IX. Originality/value This paper analyzes the compliance characteristics of countries based on their FATF mutual evaluation report. It highlights the comments and recommendation for future improvement to ensure that these countries will comply with FATF SR IX.

scholarly journals Could banning virtual assets be a breach of the doctrine of legitimate expectation?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Zahurul Haq ◽  
Kazi Fahmida Farzana ◽  
Moniruzzaman Md
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Legal Status ◽  
Task Force ◽  
Content Type ◽  
Legitimate Expectation ◽  
Legal Obligations ◽  
Global Standards ◽  
Financial Action Task ◽  
Practical Implications

Purpose This paper aims to examine the validity of a state’s prohibition on virtual assets in the context of its global commitment to battle against money laundering. Design/methodology/approach This was empirical legal research exploring how a general lack of expertise to apply a risk-based approach in anti-money laundering strategies might have implications for invoking the Financial Action Task Force (FATF) exclusion provisions in virtual asset regulation. Findings Invoking the exclusion provisions for banning virtual assets without meeting the prerequisites may put the financial system at risk and make a jurisdiction’s legal obligations appear breached. Research limitations/implications Anti-money laundering (AML) policymakers will take precautions and avoid misuse of the liberties they enjoy under FATF exclusion clauses/provisions. Practical implications The results of this study will help ensure more informed decision-making on the legal status and regulation of virtual assets. Originality/value The study helps ascertain the limits of privileges accorded to states under FATF exclusion provisions in applying global standards against money laundering.

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