Baltic shells: on the mechanics of trade-based money-laundering in the former Soviet space

2015 ◽  
Vol 18 (1) ◽  
pp. 81-98 ◽  
Author(s):  
Graham Stack
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Court Cases ◽  
Content Type ◽  
Soviet Space ◽  
Tax Fraud ◽  
The Baltic ◽  
Practical Implications ◽  
Post Soviet Space

Purpose – The purpose of this paper is to describe a platform of interconnected international shell companies operated through Baltic banks, used for trade-based money laundering (TBML) across Russia, Ukraine and other post-Soviet states. Design/methodology/approach – This is a case study that draws extensively on the results of journalist investigations and court cases to describe one example of a money-laundering platform. Findings – Platforms of international shell companies operated through Baltic banks play a key role in TBML for the post-Soviet countries. They are created for systematic laundering of revenues from tax evasion, tax fraud, corruption and criminality across the post-Soviet space, and also globally. Research limitations/implications – This study implies that TBML for the post-Soviet space is a specialized industry, hosted by collaborating banks centered in the Baltic states, in conjunction with mass use of international shell companies. Practical implications – This study implies that analysis of suspicious transactions cannot remain on the level of single companies but has to take into account the interconnected payment patterns produced by such a platform. Originality/value – Provides the first study of a trade-based money-laundering platform operating in the post-Soviet space.

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.

Challenges of money laundering for sovereign states that uses the US dollar

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Prosper Simbarashe Maguchu
Keyword(s):  
Multinational Corporations ◽  
Money Laundering ◽  
Migrant Workers ◽  
Tax Evasion ◽  
Small Businesses ◽  
Black Market ◽  
Content Type ◽  
The Us ◽  
Us Dollar ◽  
Practical Implications

Purpose There has been almost no scholarly work on the challenges of money laundering in sovereign states that use the US dollar as their currency of choice. This study aims to break the silence by highlighting how money laundering thrives in these situations mainly due to lack of or weak regulation of the US dollar by both the adopting states and the USA. Design/methodology/approach The research depended on various secondary data sources. It is an adapted academic version of a shorter piece for a professional magazine for professionals in the Anti-Money Laundering (AML) Field. Findings Preliminary findings show that due to the lack of regulation of the US dollar in dollarized economies, unscrupulous politicians, organized criminal gangs and multinational corporations among others can use a variation of the Black Market Peso Exchange (BMPE) to counteract money laundering controls and launder ill-gotten gains from crimes such as corruption, transnational crimes and tax evasion. Furthermore, ordinary citizens, migrant workers and small businesses avoiding stringent exchange rates are also using the black market, posing a further challenge to the law enforcement authorities. Practical implications The practical implications of this paper relate to how the mutations of money laundering techniques, as they are adopted by criminals, to operate in different conditions are making it difficult not only to dictate but also to address using traditional AML techniques. Social implications BMPE has far reaching social consequences. Hence, this study is significant to instigate a search for solutions and for further detailed studies into the money laundering techniques in countries that do not have a sovereign currency. Originality/value To the best of the authors’ knowledge, this is the first paper to discuss the unique challenges faced by countries that have adopted the US dollar for domestic use. The paper also shows how dollarization is a modest reminder that money laundering technique such as the BMPE can evolve to counter the legislative and regulatory environment of the various jurisdictions in which they are laundered.

An embezzler test for norms, standards and regulations

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tiago Cardao-Pito
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Design Methodology ◽  
Methodological Approach ◽  
Future Research ◽  
Content Type ◽  
Financial Crimes ◽  
Standards And Regulations ◽  
Practical Implications ◽  
Resultant Material

Purpose The purpose of this study is to address the question that economic standards, norms and regulations can possess weak spots that might be exploitable for the embezzlement of an organization’s assets with resultant material consequences in money laundering,tax evasion, fraud, corruption and other potential financial crimes. Design/methodology/approach The author’s methodological approach is to introduce and discuss a new logical-deductive test that the author names “embezzler test”. The author’s test investigates regulatory architectures from the perspective of someone attempting to divert assets from or to an organization. It appraises whether a potential embezzler could divert resources without being detected and sanctioned. Findings The embezzler test can be applied to a broad range of standards, norms and regulations. Research limitations/implications This new test can be improved and further calibrated in future research. Practical implications Researchers, regulators and law makers can use the new test to identify and eventually fix weak spots for embezzlement in norms, standards and regulations. Originality/value To the best of the author’s knowledge, such a test has never been formulated or applied before to identify weak spots for potential embezzlement in regulatory architectures.

Bribery and corruption in telecommunications – the case of Nigeria

2018 ◽  
Vol 20 (3) ◽  
pp. 244-272 ◽  
Author(s):  
Ewan Sutherland
Keyword(s):  
South African ◽  
Mobile Networks ◽  
Design Methodology ◽  
Court Cases ◽  
Content Type ◽  
Country Case Study ◽  
History Of ◽  
Small Base ◽  
Practical Implications

PurposeThis paper aims to examine issues of bribery, cronyism and nepotism in one of the most corrupt countries in Africa.Design/methodology/approachThis is a single-country case study, drawing on material dating from the mid-1970s, including court cases.FindingsThe corruption is pervasive and systemic, showing severe problems with governance in general, in the sector and against corruption. Nonetheless, two operators, one South African and one Nigerian, have delivered extensive access to mobile networks.Practical implicationsThe system of governance requires significant structural reforms, if the burden of corruption is to be reduced.Originality/valueThis paper sheds new and explicit light on the complex history of telecommunications in Nigeria. It adds to the small base of material on corruption in the telecommunications sector. It identifies issues that could usefully be taken up by institutions in Nigeria.

Valuation for compensation of communal properties in Zimbabwe: the case of Chiyadzwa and Tokwe-Mukosi projects

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joseph Awoamim Yacim ◽  
Partson Paradza ◽  
Benita Zulch (Kotze)
Keyword(s):  
Court Cases ◽  
Content Type ◽  
Study Approach ◽  
Property Valuation ◽  
The People ◽  
Multiple Case ◽  
Displaced People ◽  
The Government ◽  
Practical Implications

Purpose This study aims to examine the statutory provisions as it concerns the practice of valuation for compensation of expropriated communal properties in Zimbabwe. The primary motivation was to have informed policies that would regulate the practice of landed property assessments for compensation purposes and further contributes to existing compensation debates. Design/methodology/approach A multiple case study approach was adopted, in which property valuation projects for Chiyadzwa and Tokwe-Mukosi, provinces were selected. These two projects were chosen because they are the most recent property valuation for compensation on expropriated communal properties. Content analysis was used to analyse the statutory provisions guiding property valuation and compensation rates adopted and used during the Chiyadzwa and Tokwe Mukosi valuation projects. Findings The study found an absence of statutory guidelines on the choice of valuation methodologies, leading to inconsistencies in compensation estimates for the communal properties. Research limitations/implications The study dwells on data from the previous assessment of communal properties that triggered discontentment amongst the people to build a framework for future valuations of communal properties. Practical implications This study reviewed the existing expropriation and compensation laws and built a comprehensive guiding framework for property valuers to choose appropriate valuation methodologies and procedures for the assessment of expropriated communal properties in Zimbabwe. Social implications The main motivation for this study is to find a lasting solution to frequent court cases and clashes between the government of Zimbabwe and the displaced people. Originality/value No study unravels the detailed property valuation processes used in determining the amount of payment for the expropriated communal properties in Zimbabwe. This study built a framework that will serve as a guide to the property valuers in the assessment of compensation for communal properties.

THE CONCEPT OF THE BALTIC-BLACK SEA ARC AND UKRAINIAN FOREIGN POLICY (1990 - EARLY 2000)

2020 ◽  
pp. 89-108
Author(s):  
Alexandr S. Levchenkov ◽  
Keyword(s):  
Economic Development ◽  
Foreign Policy ◽  
Black Sea ◽  
The Black Sea ◽  
Caspian Region ◽  
Soviet Space ◽  
The Baltic ◽  
Political Economic ◽  
Eastern Baltic ◽  
Post Soviet Space

The article analyzes the influence of the concepts of the Intermarium and the Baltic-Black Sea Arc on the formation of Ukraine’s foreign policy in 1990 – early 2000. The use of these concepts in American, European and Ukrainian geopolitical thought, which historically included the idea of opposing Russian influence in the region, contributed to the increase in tension and was aimed at further disintegration of the Western flank of the post-Soviet space. The article proves that the design of the Euro-Atlantic vector of Ukraine’s foreign policy was already active under the first two Ukrainian presidents – Leonid Kravchuk (1991–1994) and Leonid Kuchma (1994–2005). One of the concrete attempts to implement the idea of forming a common political, economic, transport and logistics space of the Black Sea-Caspian region with a promising expansion of the cooperation zone to the whole of Eastern Europe and the Eastern Baltic during the presidency of Leonid Kuchma was the foundation and launch of a new regional organization, Organization for Democracy and Economic Development, better known as GUAM (composed by the initial letters of names of member states – Georgia, Ukraine, Azerbaijan, Moldova; when Uzbekistan was also a member of Organization for Democracy and Economic Development, the name of the organization was GUUAM), which is an alternative to Eurasian projects with the participation of Russia.

Corporate acceleration process: a systems psychodynamics perspective

2020 ◽  
Vol 33 (6) ◽  
pp. 1163-1180
Author(s):  
Piotr Wójcik ◽  
Krzysztof Obłój ◽  
Aleksandra Wąsowska ◽  
Szymon Wierciński
Keyword(s):  
Open Innovation ◽  
Negative Emotions ◽  
Acceleration Process ◽  
Content Type ◽  
Team Members ◽  
Third Phase ◽  
Multiple Case ◽  
Social Defenses ◽  
Practical Implications

PurposeThe purpose of this paper is to explore the emotional dynamics of the corporate acceleration process, using the systems psychodynamics perspective.Design/methodology/approachThe study applies inductive multiple case study of embedded 10 cases of corporate acceleration, covering both incumbent and startup perspectives, occurring in the context of a corporate accelerator.FindingsWe find that (1) the process of corporate acceleration involves three phases, each of them is dominated by a different emotional state (hope, anxiety and acceptance), triggering different behavioral responses; (2) as a means to deal with negative emotions, entrepreneurs and corporate acceleration program's team members develop different mechanisms of dealing with contradictories in subsequent acceleration phases (defense and copying mechanisms), which are reflected in their behaviors. Coping mechanisms with goal reformulation (i.e. refocus from the officially declared “open innovation” goals toward mainly symbolic ones) is an effective strategy to manage negative emotions in third phase of the acceleration.Research limitations/implicationsOur sample is limited to two relatively similar accelerators established by telecom companies, and therefore, our theoretical and practical conclusions cannot be generalized.Practical implicationsWe supplement the studies of corporate accelerators that imply how to design them better and improve decision-making rules with recommendation that in order to improve their effectiveness in terms of learning and innovations, their managers need not only to learn how to manage structural and procedural differences but also how to overcome social defenses triggered by corporate–startups cooperation.Originality/valueBy documenting a multidimensional impact of acceleration process, and especially shedding light on psychodynamic aspects behind such liaisons, this paper contributes to richer understanding of corporate–startup relationships, typically examined through a rationalistic lens of strategy literature. The study contributes to interorganizational research and open innovation literature, by showing that corporate acceleration process is marked by phases based on the type of emotions intertwined with the nature and dynamism of its life cycle. It indicates how these emotions are managed depending on their type.

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.

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