FIFA – highlighting the links between global banking and international money laundering

2018 ◽  
Vol 21 (4) ◽  
pp. 498-512 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Banking Sector ◽  
Due Diligence ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Global Banking ◽  
Beneficial Ownership ◽  
The Impact

PurposeThis paper uses the recent (August 2015) FIFA arrests to provide an example of how illicit financial flows 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/approachThe paper is based on the indictment document currently prepared for the FIFA arrests and the District Court case of Chuck Blazer the FIFA Whistleblower. It uses the banking examples identified in the indictment as typologies of money laundering and wire fraud. Corresponding industry reports on AML compliance are included to determine where the major weaknesses and gaps are across the financial service.FindingsThe main findings from the analysis are that banks still have weak areas within AML compliance. Even recognised red flag areas such as off shore havens, large wire transfers and front companies are still being used. The largest gaps still appear to be due diligence and beneficial ownership information.Research limitations/implicationsThe research topic is very new and emerging topic; therefore, analysis papers and other academic writing on this topic are limited.Practical implicationsThe research paper has identified a number of implications for the banking sector, addressing AML deficiencies, especially the need to consider the source of funds and the need for further enhanced due diligence systems for politically exposed and influential people and the importance of beneficial ownership information.Social implicationsThis 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/valueThe originality of this paper is the link between the emerging issues associated with allegations of bribery and corruption within FIFA and the illicit financial flow implications across the banking sector.

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.

A sample survey analysis of the effectiveness of training and development initiatives in Bahrain’s financial sector on employability of Bahraini nationals in 2015

2016 ◽  
Vol 12 (4) ◽  
pp. 359-383 ◽  
Author(s):  
Subhadra Ganguli ◽  
Reem Hameed Matar
Keyword(s):  
Financial Services ◽  
Financial Sector ◽  
Training And Development ◽  
Policy Implications ◽  
Sample Survey ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Development Initiatives ◽  
The Impact

Purpose Bahrain has been the center for financial services industry in the Middle East since 1970s as a result of the national strategy of diversification of its economy from oil-based resources to financial services. Since then Bahrain has also become the center for training and development for the Bahraini nationals with the aim of recruiting Bahrainis as employees of choice by the sector. The purpose of this paper is to analyze the effect of training and development initiatives on the employability of Bahrainis in the financial services sector in 2015. To this end, pioneering initiatives were undertaken by the government in creating institutions for training and continuous education in Bahrain. The Economic Vision 2030 of Bahrain lays emphasis on a vibrant private sector with Bahrainis being the employees of choice. Design/methodology/approach The study is a mixed approach using quantitative and qualitative methods through the use of a survey questionnaire and secondary data to analyze the impact of training and development on the employability of Bahraini nationals in the financial sector as of 2015. Findings The findings show that training and development lead to career progression which impact employability rates of Bahrainis in the financial services sector for the selected sample of financial sector employees. Research limitations/implications The study is limited by only a cross-section of data collected via questionnaire and does not consider the historical development and analysis of employability rates in Bahrain over the years. The questionnaire has some limitations and there are expected possible biases in the responses. Originality/value Given the sensitivity of the topic of research, the analysis has policy implications for the labor market of Bahrain due to the Bahrain 2030 Vision of privatization and diversification and is the first study of its kind for the financial sector of Bahrain.

Risk of money laundering in the US: HSBC case study

2016 ◽  
Vol 19 (3) ◽  
pp. 225-237 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Risk Assessment ◽  
Money Laundering ◽  
Corporate Culture ◽  
Financial Services ◽  
Banking Sector ◽  
Internal Audit ◽  
Governance Structure ◽  
Content Type ◽  
Global Banking

Purpose This paper uses a case study approach using the Permanent Sub Committee on Investigations (PSI) report on HBUS to determine where gaps in anti-money laundering (AML) regulation and compliance are within the banking sector. Design/methodology/approach The PSI highlighted five areas of serious weakness and fundamental flaws in the HBUS AML risk assessment. This paper examines the governance response that led to these weaknesses and applies a rationale decision-making theoretical framework to explain it. Findings The report found that corporate culture and attitude at the governance level were key factors in the difficulties that HBUS faced. Research limitations/implications This paper focuses on one case, albeit one of the largest banks in the global banking sector. Although generalisations are limited, the report does highlight areas to consider with all banks. Practical implications The implications that are identified are aimed at banks and auditing firms that have to work alongside governance structure within banks. The role of internal audit is raised and has future implications for how risk assessment is undertaken and how AML compliance frameworks are devised and reported on. Social implications A stronger social corporate responsibility attitude is suggested that considers the wider social impacts of supporting criminal transactions, even inadvertently, by inappropriate and under-resourced AML risk-assessment frameworks. Originality/value The detailed analysis of one case that considers the governance response to AML regulation is new in this paper, and the detailed recommendations for improving and developing stronger AML risk-assessment frameworks apply to the banking, financial services and auditing professions.

Suspicious alerts in money laundering – the Crédit Agricole case

2017 ◽  
Vol 24 (4) ◽  
pp. 691-703 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Academic Writing ◽  
Financial Services ◽  
Banking Sector ◽  
Legal Responsibility ◽  
Content Type ◽  
Reporting Requirements ◽  
Compliance Requirements ◽  
Beneficial Ownership ◽  
Corporate Social

Purpose The purpose of this paper is to provide an analysis of the recent Crédit Agricole case outcome, whereby the bank was found to have undertaken insufficient investigation and failed to follow through on reporting suspicious account activity, in line with AML compliance requirements. Design/methodology/approach The paper uses the two main legal documents in the Michailidis v Crédit Agricole Corporate and Investment (CACI) bank case and analyses the judgement details to discuss the implications for the banking and financial services sector on money laundering and AML compliance reporting requirements. 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, and 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 detection and reporting requirements of suspicious transactions. Social implications This paper has implications for the corporate social responsibility of banks and other financial services towards monitoring the source and use of money that is in their organisation. The paper identifies areas of legal responsibility that banks now have to manage, as part of their commitment to support the prevention of money laundering. Originality/value The originality of this paper is the current example of the Crédit Agricole case and the future legal implications for banks and financial services on suspicious transaction reporting and money laundering risk assessment.

Slipping through the net

2018 ◽  
Vol 21 (2) ◽  
pp. 203-214
Author(s):  
Adebola Adeyemi
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Current Approach ◽  
Content Type ◽  
Services Sector ◽  
Secondary Sources ◽  
Financial Services Sector ◽  
The Uk ◽  
Practical Implications

Purpose The purpose of this paper is to highlight the activities of the FCA with respect to the incidence of money laundering and highlight regulatory gaps. The financial services sector provides a crucial infrastructure for the promotion of wealth and innovation in the UK. This attractive infrastructure also appeals to criminals looking to launder the gains of their illicit activities. Design/methodology/approach The paper analyses the UK money laundering regime, highlighting specific challenging areas. The paper investigates the role of politically exposed persons and the use of corporate structures in promoting money laundering. In this context, it also becomes crucial to investigate the role of financial institutions and the sufficiency of their governance approach in lessening the incidence of money laundering. The paper investigates secondary sources and relies on their findings. It compares these findings to the regulatory outcomes. Findings The paper recommends steps that can be used to lessen the incidence of money laundering in the UK. From the reports evaluated, it is clear that the Financial Conduct Authority is working towards reducing the incidence of money laundering, but this could be further strengthened with the adoption of additional enforcement tools. Practical implications The paper suggests that different approaches should be used based on firm size, the type of business and the risk that a financial services firm presents to the financial sector. A large firm will need to bear more regulatory burden compared to a smaller firm. Originality/value The paper investigates the current approach to minimising the incidence of money laundering in the UK. It suggests that the regulator can guide financial services firms to meet the regulatory objectives by relying on an approach that discerns the regulatory risks presented by different firms depending on their size.

Enhancing effectiveness of anti-money laundering laws through whistleblowing

2014 ◽  
Vol 17 (3) ◽  
pp. 327-342 ◽  
Author(s):  
Peter Yeoh
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Hard Core ◽  
Secondary Data ◽  
Extensive Literature ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Remedial Actions ◽  
The Uk

Purpose – The purpose of this paper is to review inadequacies of anti-money laundering (AML) and whistleblowing laws particularly in the UK financial services sector and suggest various reforms initiatives. Design/methodology/approach – The article relies extensively on secondary data analysis including extensive literature review, analysis of applicable cases and evaluation of current whistleblowing and AML laws. Findings – The preponderance of defensive reporting particularly in the financial services sector appears to blunt the effectiveness of AML laws in the UK. Working adults generally are unaware or unfamiliar with whistleblowing laws, whereas the laws themselves are also deficient in some ways even though they have been adopted and adapted in various other jurisdictions because of its perceived comprehensiveness. Preliminary indications from money laundering scandals demonstrate how and why early disclosures of wrongdoings through whistleblowing might have helped to reduce the magnitude of the adverse consequences and hence the importance of whistleblowing in the fight against money laundering. Originality/value – This article provides the argument that while money laundering is perpetuated by hard-core criminals, it could be aided along by others motivated by profits in the financial system and that those closes to the process and in particular workers when encountering such activities should be encouraged to report these via appropriate channels. This together with further revamping of the suspicious activity reports procedures required under AML laws is argued to be able to contribute to the reduction of defensive reporting thereby enabling enforcement agencies to have more effective focus on remedial actions.

China’s dirty laundry – international organizations posing a risk to China’s AML systems

2018 ◽  
Vol 21 (2) ◽  
pp. 189-202 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Risk Assessment ◽  
Money Laundering ◽  
International Organizations ◽  
Banking Sector ◽  
Due Diligence ◽  
International Banking ◽  
Content Type ◽  
International Money ◽  
Customer Due Diligence ◽  
Chinese Banking

PurposeThis paper aims to review some of the current challenges that international money laundering schemes are posing in the Chinese banking sector. Anti-money laundering (AML) systems in China are relatively new, and customer due diligence checks and other AML systems are underdeveloped in some areas.Design/methodology/approachThe paper considers a particular case example of a multi-company organization that has known links to China. This company has been the target of both European and US investigations for suspected embezzlement and money laundering, and yet is still in operation.FindingsThe paper considers the complexities of this organization and how a seemly innocent link to a used clothing charity can fund an international organization spanning several countries. The paper offers a list of basic indicators of risk that could be applied to a risk-based system used within the Chinese banking context by using this group as an example.Originality/valueThe paper uses empirical and academic studies from other authors working in this region and supports many of the findings of the need to develop stronger risk-based, as opposed to rules-based, systems for managing AML risk assessment. Previous work by the author and suggestions from other authors are both used to suggest a basic framework for AML risk assessment. The paper concludes by reiterating the fact that China, like all other countries, is now operating in an international banking context, in much the same way that international organized crime is also operating at a global level.

Climate Change and Entrepreneurial Financing

2021 ◽  
pp. 399-410
Author(s):  
Ayansola Olatunji Ayandibu ◽  
Makhosazana Faith Vezi-Magigaba
Keyword(s):  
Climate Change ◽  
Financial Services ◽  
Developing Economies ◽  
Climatic Conditions ◽  
Services Sector ◽  
Financial Services Sector ◽  
Sustainable Economy ◽  
Entrepreneurial Financing ◽  
The Impact ◽  
Gain Access

Entrepreneurs in emerging and developing economies face many challenges curtailing their ability to finance and grow their business ventures. Climate change provides new opportunities for entrepreneurs to gain access to finance and contribute toward more climate-resilient economies. The objective of this chapter is to outline the dimensions of entrepreneurial financing that are sensitive to levels of climate change with emphasis on the financial services sector's role in reacting to these changes. An analysis of current extant literature will be explored, and evidence supporting effective entrepreneurial financing will be used to develop a theoretical framework for climate change and entrepreneurial financing to foster a more climatic conditions-sustainable economy. The literature in this chapter indicated the need for establishing the impact of climate change on entrepreneurial financing in the financial services sector in order to provide recommendations that can direct funding more effectively towards climate-resilient activities and a more climatic conditions-sustainable economy.

Employees Outlook Regarding Quality and CRM Link for Enriched Competitive Strategy

2020 ◽  
Vol 9 (2) ◽  
pp. 27-47
Author(s):  
Neeta Baporikar
Keyword(s):  
Financial Services ◽  
Competitive Strategy ◽  
Banking Sector ◽  
Business Environment ◽  
Customer Relationship ◽  
Primary Data ◽  
Research Approach ◽  
Services Sector ◽  
Financial Services Sector ◽  
Management Processes

The business environment is dynamic and faces frequent changes driven by macro and micro factors. Due to these changes, businesses are forced to either evolve or exit. Those that evolve choose the path of advancement and are determined to sustain their competitive positions. The financial services sector is one sector that is particularly undergoing changes and banks particularly in this sector face changes from all front. All segments in which banks operate from payment transfers to home loans are under serious pressures due to FinTechs and technology. The banking sector in Namibia is no exception. Hence, adopting a qualitative research approach with content analysis, primary data gathered by questionnaires from Standard Bank employees, the study aims to investigate employees' outlook regarding quality and CRM nexus for enriched competitive strategy in an ever-changing and competitive environment. The findings reveal that quality and customer relationship management processes do influence customers' experiences, satisfaction levels, and loyalty.

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.

Sign in / Sign up

Export Citation Format

Share Document