Politically exposed entities: how to tailor PEP requirements to PEP owned legal entities

2019 ◽  
Vol 22 (2) ◽  
pp. 359-372 ◽  
Author(s):  
Daniele Canestri
Keyword(s):  
Financial Institutions ◽  
Risk Mitigation ◽  
Point Of View ◽  
International Standards ◽  
Due Diligence ◽  
Content Type ◽  
Private And Public ◽  
Political Office ◽  
Private Banking ◽  
Legal Entities

Purpose This paper aims to address the money laundering risk posed by politically exposed person’s (PEP’s) controlled legal entities. International standards and national legislation require enhanced due diligence of political office holders but no specific requirements exist on entities controlled by PEPs. While regulators expect the stringent AML risk mitigation regarding this type of entities, financial institutions have no guidelines to follow. This gap produces inconsistent due diligence measures applied to entities with significant PEPs’ connection. Design/methodology/approach The paper uses comparative analysis to identify discrepancies between legal requirements and their interpretation. Moreover, an empirical approach results in a standardised solution to address these discrepancies. Findings The paper defines the concept of politically exposed entities and the applicable due diligence framework. Anticipating legislative measures, it proposes to introduce this concept via best practices of financial institutions and private banking initiatives such as the Wolfsberg Group. Research limitations/implications The research addresses the topic from a legal point of view. However, the implementation of proposed ideas depends on decisions which are political by nature and are not within the scope of this paper. Practical implications The paper aims at stimulating a debate in both the private and public sector to form a consistent approach to AML due diligence of legal entities associated to PEPs. Originality/value This paper responds to an identified need to study how legal entities connected to PEPs should be defined and monitored.

scholarly journals An empirical study of the challenges facing zakat and waqf institutions in Northern Nigeria

2019 ◽  
Vol 11 (2) ◽  
pp. 338-356 ◽  
Author(s):  
Mahadi Ahmad
Keyword(s):  
Point Of View ◽  
Primary Data ◽  
Northern Nigeria ◽  
Federal Law ◽  
Content Type ◽  
The Public ◽  
Purposeful Sampling ◽  
Qualitative Research Methodology ◽  
Political Office ◽  
Low Performance

Purpose The purpose of this paper is to unearth the factors inhibiting the development of zakat (the Islamic obligatory alms) and waqf (endowment) institutions in Northern Nigeria, with the aim of proffering appropriate solutions. Design/methodology/approach This paper uses a qualitative research methodology whereby data was sourced from relevant stakeholders in Northern Nigeria. To select the appropriate interviewees, maximum variation and homogenous purposeful sampling techniques were used. Findings The findings of the paper show that zakat and waqf institutions in Northern Nigeria have not achieved their inherent Sharīʿah objectives because members of the public have little or no trust or confidence in the institutions. Also, the potential zakat payers and waqf donors dislike political office holders’ involvement in the appointment of the institutions’ administrators. Finally, the administrators lack adequate managerial and administrative knowledge of the two institutions. Research limitations/implications The current research focusses on causes of low performance of zakat and waqf institutions solely in Northern Nigeria. It is envisaged that subsequent researchers may conduct research on the possibility of having a federal law that will strengthen the overall establishment and development of zakat and waqf in Nigeria. This will affect both Muslim-majority and Muslim-minority communities. Originality/value This paper represents a referenceable work in the field of zakat and waqf in Northern Nigeria, as it uses an approach that sources primary data in the form of participants’ point of view instead of relying on literature or document analysis. It is not a mere theoretical study of the literature but an empirical investigation of the problem.

Fincen requires financial institutions to obtain beneficial ownership information for legal entity customers

2016 ◽  
Vol 17 (4) ◽  
pp. 34-44
Author(s):  
Ignacio Sandoval ◽  
Charles Horn ◽  
Melissa Hall
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Due Diligence ◽  
Legal Entity ◽  
Content Type ◽  
Financial Crimes ◽  
The Us ◽  
Beneficial Ownership ◽  
To Come ◽  
Customer Due Diligence

Purpose To provide an overview of the legal entity customer due diligence rule recently adopted by the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury. Design/methodology/approach This paper provides an overview of the requirements of the legal entity customer due diligence rule as well as some observations regarding the scope of the rule, its interplay with other regulatory requirements, and some of the rule’s ambiguities. Findings While the preamble to the new rule suggests that FinCEN was attempting to accommodate industry concerns, the literal terms of the rule may have the opposite effect. Practical implications Although financial institutions will have until May 2018 to come into compliance with the rule’s requirements, they should begin developing the infrastructure to support compliance with the rule as soon as possible. Originality/value Practical insights into issues that financial institutions may encounter when implementing the rule’s requirements from experienced financial services lawyers.

National risk assessment – the Croatian features

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sonja Cindori
Keyword(s):  
Risk Assessment ◽  
Money Laundering ◽  
Financial Sector ◽  
International Standards ◽  
Due Diligence ◽  
Content Type ◽  
Increased Risk ◽  
Beneficial Ownership ◽  
Inductive Methods ◽  
The Right

Purpose The purpose of this paper is to present the risk of the non-financial sector in Croatia concerning the threats of money laundering through the prism of national and supranational risk assessment. In addition to a brief overview of the financial sector, the specifics of the non-financial sector have been highlighted. This paper aims to emphasize the peculiarities of the non-financial sector, focusing on the consequences of arbitrary application on the right to professional secrecy and independence. Design/methodology/approach Specifics of the national risk assessment in Croatia have been analyzed using deductive and inductive methods. To provide an overview of the non-financial sector, the risk assessment at the supranational level has been discussed and compared with the national one. Particular attention has been paid to the areas of increased risk. Findings The effectiveness of risk assessment depends on several factors such as the characteristic of the sector being observed, the specifics of each profession or business, changes at the level of awareness-raising and efficient and coherent supervision. Most deficiencies were observed in the area of beneficial ownership identification, conducting due diligence, awareness of the risk exposure and permanent education. Originality/value By recognizing the risk profile faced by the non-financial sector, this paper seeks to point out their role as “Gatekeepers” that is far from being negligible. By analyzing the risk of money laundering in Croatia, the tendencies of harmonization with international standards are pointed out along with the occurrences indicated by the practice.

Implementation of the personal data minimization principle in financial institutions: Lithuania’s case

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marius Laurinaitis ◽  
Darius Štitilis ◽  
Egidijus Verenius
Keyword(s):  
Financial Institutions ◽  
Personal Data ◽  
Legal Framework ◽  
Legal Regulation ◽  
Point Of View ◽  
Content Type ◽  
General Data Protection Regulation ◽  
Minimization Principle ◽  
General Data ◽  
The One

Purpose The purpose of this paper is to assess such processing of personal data for identification purposes from the point of view of the principle of data minimisation, as set out in the EU’s General Data Protection Regulation (GDPR) and examine whether the processing of personal data for these purposes can be considered proportionate, i.e. whether it is performed for the purposes defined and only as much as is necessary. Design/methodology/approach In this paper, the authors discuss and present the relevant legal regulation and examine the goals and implementation of such regulation in Lithuania. This paper also examines the conditions for the lawful processing of personal data and their application for the above-mentioned purposes. Findings This paper addresses the problem that, on the one hand, financial institutions must comply with the objectives of collecting as much personal data as possible under the AML Directive (this practice is supported by the supervisory authority, the Bank of Lithuania), and, on the other hand, they must comply with the principle of data minimisation established by the GDPR. Originality/value Financial institutions process large amounts of personal data. These data are processed for different purposes. One of the purposes of processing personal data is (or may be) related to the prevention of money laundering and terrorist financing. In implementing the Know Your Customer principle and the relevant legal framework derived from the EU AML Directive, financial institutions collect various data, including projected account turnovers, account holders' relatives involved in politics, etc.

Corporate frauds in India – perceptions and emerging issues

2015 ◽  
Vol 22 (1) ◽  
pp. 79-103 ◽  
Author(s):  
P. K. Gupta ◽  
Sanjeev Gupta
Keyword(s):  
Case Studies ◽  
Financial Institutions ◽  
Research Work ◽  
Corporate Image ◽  
Primary Data ◽  
Due Diligence ◽  
Prevention Policy ◽  
Fraud Prevention ◽  
Content Type ◽  
Emerging Issues

Purpose – The purpose of this paper is to examine the nature and perception of corporate frauds in India and their consequences in the business and economic systems, and it highlights the emerging issues so that existing legal and regulatory obligations can be redefined and structured. Design/methodology/approach – An exploratory research was conducted through a combined mode of literature review; case studies; structured questionnaires from 346 sample companies; and 43 interviews with the corporate professionals, management, investors, government offices and authorities having wide experience. Findings – It was found that the regulatory system is weak, and there is dire need to redefine the role of auditors. Coordination among different regulatory authorities is poor, and after every scam, there is a blame game. Reporting of fraud and publication of fraud prevention policy are missing. Banks and financial institutions are ineffective on due diligence, and there is a lack of professionalism on the board and other executive levels in companies. Research limitations/implications – This study assumes that fraud could be mitigated by proactive and conscious action by auditors, and corporate executives are willing to avoid perpetrating financial fraud despite pressures from investors, government securities regulators and exogenous market fluctuations. The authors relied on the honesty of the respondents during the sample collection and recorded semi-structured interviews. A minimum level of five years’ work experience relative to preventing, detecting or investigating fraud has been considered a valid determinant in selecting the purposive sample. Practical implications – The study suggests mandatory publication of fraud prevention policy; constitution of special purpose corporate offence wing; recognition to companies for improved corporate governance; true adoption of International Financial Reporting Standards; due diligence by banks and financial institutions; compulsory appointment of professionals by shareholders and fixation of responsibility on independent professionals; intellectualisation of audit committee; and more powers to the regulators, especially Securities and Exchange Board of India. Social implications – Prevention of corporate frauds reduces anxiety, improves corporate image and builds up confidence of the investors, which is essential for resource channelling in financial markets. Originality/value – The research work is based on a thorough analysis of regulatory framework and fraud case studies and primary data collected from companies, banks and other government and developmental institutions.

Transparency in the German real estate market

2005 ◽  
Vol 23 (1) ◽  
pp. 90-108 ◽  
Author(s):  
Karl‐Werner Schulte ◽  
Nico Rottke ◽  
Christoph Pitschke
Keyword(s):  
Real Estate ◽  
Real Estate Market ◽  
International Standards ◽  
Real Estate Industry ◽  
Content Type ◽  
Real Estate Markets ◽  
Current State ◽  
The Usa ◽  
Private And Public ◽  
The Uk

PurposeGerman real estate markets used to show little transparency in the past. This has changed over the last 15 years. The purpose of this study therefore is to examine the current state of transparency.Design/methodology/approachThe study investigates and discusses the concept of transparency in general, availability of private and public market data, major real estate investment products, performance measurement, changes in the regulatory environment and the emergence of organizations and publications. The findings of this study are obtained in a comparative manner: The transparency status of the 1990s in the different areas researched is compared to the current German and other international standards. The authors describe the relatively opaque German real estate market as it was at the beginning of the 1990s and show how it has improved to date.FindingsThe results show that transparency in the German real estate market has noticeably improved in all researched areas. But still, compared with the USA or the UK, the German real estate industry and real estate market still lack transparency and are characterized by information asymmetries and opaqueness.Originality/valueThe results indicate that the German real estate market and industry become more mature and bit by bit converge with their US and UK archetype.

Knowledge management framework to the university libraries

2016 ◽  
Vol 37 (4/5) ◽  
pp. 221-236 ◽  
Author(s):  
Roberta Moraes de Bem ◽  
Christianne Coelho de Souza Reinisch Coelho ◽  
Gertrudes Aparecida Dandolini
Keyword(s):  
Knowledge Management ◽  
Complex Adaptive System ◽  
Point Of View ◽  
International Standards ◽  
University Libraries ◽  
Content Type ◽  
Knowledge Resources ◽  
Management Framework ◽  
University Library ◽  
The University

Purpose – The purpose of this paper is to propose a knowledge management framework for university libraries (named GC@BU). The framework consists of three modules: knowledge management coordination; knowledge resources; and learning commons, and uses as theoretical assumptions the design of an university library (developed for the context of the framework), the standards for libraries in higher education of the Association of College and Research Libraries (ACRL) and the characterization of the university library as a complex adaptive system (CAS). Design/methodology/approach – This framework was structured by a literature review and based on models, methodologies and existing frameworks, being afterwards evaluated through focus groups composed of managers of university libraries, resulting in an enhanced version. Findings – After evaluation, the GC@BU framework showed to be easy to apply in the context for which it was created (university libraries). It is noteworthy that in addition to the knowledge management application, the GC@BU reinforces the importance of concerning for the quality and the services, since it uses as a parameter the standards of the ACRL. In addition, the perspective used to characterizing university libraries (as CASs) was well accepted by the tool evaluators. Research limitations/implications – The proposed framework is focussed on university libraries, but its use in other contexts should not be dismissed as long as the manager makes the necessary adjustments for this purpose. Practical implications – Since knowledge management is an intangible element, its application and benefits are not easy to conceive. This tool provides the implementation of knowledge management in university libraries, and knowledge is considered from different approaches (from the user, the collaborator, the library collection). Besides, the tool is arranged so (in modules and verification criteria) as to allow the manager to administer the library as a whole, from the point of view of knowledge management. Originality/value – This study is considered innovative and applicable on the global stage of university libraries, because despite being evaluated by Brazilian managers it uses international standards and has a strong ability to adapt to different contexts.

The recent formulation of “having reasonable grounds to believe”

2018 ◽  
Vol 21 (2) ◽  
pp. 149-162
Author(s):  
Claire Wilson
Keyword(s):  
Hong Kong ◽  
Money Laundering ◽  
International Standards ◽  
Comparative Approach ◽  
Mens Rea ◽  
Wide Audience ◽  
Content Type ◽  
Private And Public ◽  
The Uk ◽  
Recent Formulation

Purpose The purpose of this study is to analyse the challenges in devising a suitable formulation to determine whether a person had reasonable grounds to believe that property dealt with represented the proceeds of an indictable crime in the context of money laundering offences. The paper also examines the Hong Kong Court of Final Appeal’s recent formulation in HKSAR v. Yeung Ka Sing, Carson (decided July 2016) and evaluates international standards. Design/methodology/approach The methodology adopted is partly a technical analysis of the various interpretations of “having reasonable grounds to believe” alongside a comparative approach drawing on international standards of the mens rea threshold and the position in the UK. Findings The findings are that the Court of Final Appeal’s formulation of “having reasonable grounds to believe” is the best possible outcome given the confines of the statutory provisions. The study confirms that the threshold set by the Court of Final appeal surpasses international standards; however, it argues that current international standards are in need of review. Originality/value This paper offers insight into the latest mens rea threshold of “having reasonable grounds to believe” in the context of Hong Kong’s anti-money laundering laws and compares international standards of the mens rea threshold. The discussion is of value to a wide audience both in Hong Kong and globally. It aims to provide guidelines to legal practitioners, law enforcement personnel, persons in the private and public sectors, academics and members of the public. This paper also seeks to provoke discussion as to whether international standards on the mens rea threshold should be reviewed with a view to strengthening international cooperation on the prevention of money laundering.

Hazard identification and risk analysis for a reinforced concrete rolling mill

2017 ◽  
Vol 14 (1) ◽  
pp. 1-6 ◽  
Author(s):  
Kahoul Hafida ◽  
Chaib Rachid ◽  
Bellaouar Ahmed
Keyword(s):  
Risk Assessment ◽  
Risk Mitigation ◽  
Global Analysis ◽  
Indirect Costs ◽  
Hazard Identification ◽  
Point Of View ◽  
Work Place ◽  
Steel Mill ◽  
Content Type ◽  
Continuous Improvement Process

Purpose Because of non-satisfactory results obtained at the iron rods steel mill, during the last period of work and to collect relevant data to facilitate rapid and efficient decision-making, the purpose of this study is to describe a global analysis method of risks encountered by companies resulting from their own effects or by their environment to integrate prevention as soon as the conception of work place. From this point of view, it seems that it is time for companies that did learn to master direct costs to learn how to control indirect costs, which means controlling the risks and learning to face them once they are detected. Design/methodology/approach The method of work used is hazard identification and risk assessment (HIRA), which is based on Kinney evaluation. The HIRA allowed the authors to collect and analyze different dangers and risks at work posts and consider different corrective measures to prevent damages. The HIRA techniques are based on identifying the different hazardous situations and the risk related to each working station; the risks are identified and are classified and mitigated accordingly. Using unique criteria, the objective of the risk assessment part is to assign to each risk a numerical value. The criteria used for classifying and ordering the risk importance depend greatly on the selected method. Findings Risks are identified, classified and mitigated accordingly using Kinney method criteria depending on three factors: frequency of exposure (NE), probability of occurrence (NP) and severity level (NG). The level of risk mitigation (NM) is obtained as the product of the three factors (NP, NG and NE). Using the Pareto plot (20-80 per cent), the authors highlighted the priorities to be taken in the order of importance of the most important causes to take targeted measures. Originality/value This work is an opportunity for the steel mill complex to start a global approach in prevention of risks and improve working conditions. This can be reached by taking into consideration the technical, organizational and human solutions; It would not be a better method to search for ways and means to reach better prevention of industrial and technological risks, but it will preserve health of workers and get to a global higher level of security. Also, the steel mill complex can be engaged in a continuous improvement process. Therefore, management of risks will be a relevant way to decrease undesirable effects due to the diverse activities of the company.

Shari’ah issues, challenges, and prospects for Islamic derivatives: a qualitative study

2016 ◽  
Vol 8 (2) ◽  
pp. 168-190 ◽  
Author(s):  
Muhammad Rizky Prima Sakti ◽  
Ahmad Syahid ◽  
Mohammad Ali Tareq ◽  
Akbariah Mohd Mahdzir
Keyword(s):  
Financial Institutions ◽  
Foreign Currency ◽  
Risk Mitigation ◽  
Financial Industry ◽  
Structured Interviews ◽  
Content Type ◽  
Banking And Finance ◽  
Finance Industry ◽  
Derivative Instruments ◽  
Islamic Financial Institutions

Purpose The purpose of this study is to investigate shari’ah scholars’ views and experiences pertaining the shari’ah issues, challenges and prospects in Islamic derivatives. Specifically, this paper critically examines the criticisms toward conventional derivative instruments and the controversies surrounding underlying contracts and current Islamic derivative products. Design/methodology/approach This study uses qualitative methods to form a deeper understanding of shari’ah scholars’ perception and experience on Islamic derivatives. Semi-structured interviews were conducted with five shari’ah scholars who are currently working in Islamic financial institutions in Malaysia and Singapore. This study used phenomenological techniques for its data analysis. Findings This study has found that shari’ah scholars are aware of the shari’ah issues surrounding Islamic derivatives and have provided comprehensive insight on the solution to these issues. It was found that it is important to take into account the derivatives instruments in Islamic financial industry because of the need for hedging and risk mitigation within Islamic financial institutions. Nonetheless, the study has also found that the use of wa’ad contracts to structure Islamic profit rate swaps and foreign currency exchanges are problematic because of it having features of bay’ al-kali’ bil-kali (the sale of one debt for another). Originality/value This study is one of few studies that highlight the shari’ah issues of Islamic derivatives in Islamic banking and finance industry. This paper is of value in discussing risk management and Islamic derivatives in Islamic financial institutions and how there are many issues under the investigation process, particularly issues related to controversial underlying contracts and products.

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