The financial action taskforce and money laundering: critical analysis of the Panama papers and the role of the United Kingdom

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aisha Hassan Al-Emadi
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Content Type ◽  
The United Kingdom ◽  
Rapid Changes ◽  
Financial Action Task ◽  
The Uk ◽  
Desk Review

Purpose This paper aims to study the effectiveness of the implementation of the Financial Action Task Force (FATF) recommendations in the UK in an attempt to combat the laundering of proceeds of corruption. Design/methodology/approach A desk review of secondary resources was conducted to analyze available literature to examine the research topic. Findings The leakage of 11.5 million documents, known as the Panama papers, has revealed that the UK functioned as a safe haven for illicit and corrupt money. In an attempt to address this, the country called for a public registry of beneficial owners to disclose the identities of the owners of the incorporated corporations and to extend them to individuals abroad holding UK property. The FATF report recognizes the UK’s far-reaching regulation. Despite the measures taken, UK still faces serious risks with regard to the laundering of criminal proceeds, which demonstrates that technical compliance with FATF rules is not enough to effectively curb money laundering. Originality/value This study suggests that FATF rules’ effectiveness in identifying instances of laundering the proceeds of corruption is limited because of the deeply rooted system vulnerabilities and the rapid changes in money laundering trends.

International commercial arbitrator addressing money laundering sua sponte

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Todor Kolarov
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Legal Basis ◽  
Practical Application ◽  
Commercial Arbitration ◽  
Financial Action Task Force ◽  
Content Type ◽  
International Commercial Arbitration ◽  
Financial Action Task

Purpose The purpose of this paper is to evaluate the existing legal basis, and its practical application, of an arbitrator’s competence to raise on her own initiative money laundering issues. Design/methodology/approach The research focusses on presenting the essence of the problem through evaluation of the legal basis for the arbitrators to raise money laundering concerns on their own initiative and the examples of so being done in international commercial arbitration. Findings This paper concludes that arbitrators do not presently have a solid legal basis that authorises them to act sua sponte against money laundering. Originality/value The originality and value of this paper lies in its emphasis on theoretical and practical issues related to money laundering in international commercial arbitration. It argues in favour of an explicit recommendation to be incorporated in the 2012 Recommendations of the Financial Action Task Force (FATF) that international commercial arbitrators address money laundering on their own initiative.

New developments in Hong Kong’s anti-money laundering laws

2016 ◽  
Vol 19 (3) ◽  
pp. 291-297 ◽  
Author(s):  
David Kwok
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Task Force ◽  
Case Law ◽  
New Developments ◽  
Content Type ◽  
Proceeds Of Crime ◽  
Financial Action Task ◽  
Law And Legislation

Purpose The purpose of this paper is to discuss briefly new developments in Hong Kong’s (HK) Anti-Money Laundering (AML) laws, both in terms of case law and legislation. Design/methodology/approach In terms of case law, the author discusses two decisions given by HK’s Court of Final Appeal relating to the dealing of proceeds of crime offence. Also, a guideline case on sentencing is also examined. In terms of legislation, the author briefly outlines the main provisions of the newly enacted AML and Counter-Terrorist Financing (Financial Institutions) Ordinance. Findings As suggested by the Financial Action Task Force, new measures need to be put in place. The AML laws, as they presently stand, need further improvement. Originality/value A good AML regime is necessary as HK continues to thrive as a major financial/banking centre in Asia. This paper seeks to encourage more discussion on the topic.

Designating lawyers as reporting entities under the Kenya’s anti-money laundering regime

2020 ◽  
Vol 23 (3) ◽  
pp. 637-649
Author(s):  
Kennedy Otieno Pambo
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Confidential Information ◽  
Content Type ◽  
Practical Solution ◽  
Legal Professionals ◽  
Legislative Framework ◽  
Financial Action Task ◽  
Apparent Conflict

Purpose Kenya has made little progress in its endeavor to categorize lawyers as designated non-financial businesses and professionals (DNFBPs), despite making spirited attempts in 2007, 2018 and lately in 2019. The legal professionals are, therefore, not bound by the reporting and other stringent obligations imposed by the Financial Action Task Force (FATF) to deter possible misuse by money launderers. The purpose of this paper, therefore, is to enumerate the ongoing efforts toward designating lawyers as DNFBPs in Kenya. The paper also assesses the institutional and legislative incentives (as well as barriers) for imposing the anti-money laundering (AML) duty thereto. Design/methodology/approach The paper provides a qualitative review of Kenya’s AML legislative framework and the potential support/hindrance to imposing the AML duty on lawyers. Also, this paper provides a suggestion for possible solutions. Findings The legislative framework in Kenya has outlawed money-laundering, and lawyers can be compelled to disclose confidential information observed in the course of employment if it embodies crime or fraud. Thus, imposing the AML obligation on lawyers is nothing out of the ordinary, rather a mere creation for a formal disclosure mechanism. However, this paper also revealed divergent views that merit reconciliation for the seamless designation of lawyers. Originality/value To enhance the legislative framework in Kenya, the paper borrows from the FATF’s Interpretive Note to Recommendation 23 and suggests a practical solution to the apparent conflict between the legal professional privilege and the AML duty.

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.

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.

Anti-money laundering and counter-terrorism financing disclosure by money exchange providers in the GCC countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md Abubakar Siddique ◽  
Haitham Nobanee ◽  
Osama Fayez Atayah ◽  
Mohammed Khereldin Bayzid
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Content Type ◽  
Counter Terrorism ◽  
Gcc Countries ◽  
Terrorism Financing ◽  
Financial Action Task ◽  
High Degree ◽  
Practical Implications

Purpose The purpose of this paper is to measure anti-money laundering (AML) and counter-terrorism financing (CTF) disclosures by money exchanger providers in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The authors conduct a content analysis on firms’ websites to compare their AML/CTF disclosure against the recommendations of the Financial Action Task Force (FATF). The authors use a one-sample t-test to examine the degree of these disclosures. Findings Overall, money exchange providers in GCC countries do not demonstrate a high degree of AML/CTF disclosure (20.27%). Country-wise disclosure levels are: Qatar 31%, UAE 19%, Kuwait 17.1%, Oman 26.27%, Bahrain 23.27% and KSA 6.1%. Research limitations/implications The study contributes immensely to understanding the disclosure behavior of this sector. It also helps in assessing their compliance with FATF recommendations. Practical implications The results show poor AML/CTF disclosure and compliance by money exchange providers, which should lead to increased regulations by policymakers and more disclosure by practitioners. Social implications Money laundering (ML) and terrorism financing (TF) can adversely affect societies. This study should help regulators to identify vulnerable areas in ML and TF activities, compare disclosures by companies in their countries with those of other countries and identify areas for improvement. Originality/value The study is a novel attempt. No study has been undertaken before to investigate AML and CTF disclosure by money exchange providers either globally, regionally or in any country.

Designated non-financial businesses and professions

2017 ◽  
Vol 20 (3) ◽  
pp. 247-261 ◽  
Author(s):  
Michael Newbury
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Task Force ◽  
Objective Assessment ◽  
Content Type ◽  
Counter Terrorism ◽  
Terrorism Financing ◽  
Financial Action Task ◽  
Practical Implications

Purpose The purpose of this paper is to highlight vulnerabilities in Australia’s anti-money laundering/counter-terrorism financing (AML/CTF) regime through Australia’s non-compliance with the Financial Action Task Force (FATF) recommendations on the regulation of designated non-financial businesses and professions (DNFBPs). It is intended that through examination of the justifications for and against AML/CTF regulation of DNFBPs, the paper will provide support for the position that Australia’s AML/CTF regime should incorporate regulation of DNFBPs. Design/methodology/approach The paper presents findings from research conducted in 2015 that focused on some of the principal arguments for and against the extension of Australia’s AML/CTF regime to DNFBPs. Review and consideration of the merits of these arguments is undertaken to support the conclusion that AML/CTF regulation should be extended to DNFBPs, in line with the FATF recommendations. Findings The current exemption of many DNFBPs from AML/CTF regulation perpetuates vulnerabilities within Australia’s AML/CTF regime; until this is addressed, criminals will continue to exploit these vulnerabilities and the regulated AML/CTF sector will continue to shoulder an unfair burden of Australia’s AML/CTF response. Practical implications This paper provides an objective assessment of factors for and against the regulation of DNFBPs in Australia. It may be of value to government policymakers, regulators, financial institutions and DNFBPs. Originality/value This paper complements existing research on this subject and provides a specific focus on some of the main arguments for and against the extension of Australia’s AML/CTF regime to specific DNFBPs.

Ratify and comply: a pathway for Japan to follow the FATF recommendation 35

2018 ◽  
Vol 21 (1) ◽  
pp. 71-88 ◽  
Author(s):  
Akira Matsuoka
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
The Novel ◽  
Legal Analysis ◽  
Financial Action Task Force ◽  
Content Type ◽  
Financial Action Task ◽  
Strategic Solution

Purpose To identify the reason of Japan not complying with the Financial Action Task Force (FATF) recommendation 35 and suggesting a strategic solution to overcoming the barrier. Design/methodology/approach Through contextual, historical, and legal analysis of the anti-money laundering (AML) measures in Japan. Findings This paper implies that less flexible mindsets in stone of major players in the field of AML measures in Japan are the fundamental barrier for Japan not complying with the FATF Recommendation 35, while this paper suggests better realistic ways to address the barrier. Originality/value The novel point of this paper is that this paper illustriously uncovers the mindsets of the major players pertaining to the Japanese AML measures in a very illustrative way, points out the underlying true barrier, and describes a useful strategy desperately needed to address the barrier.

The money laundering risks and vulnerabilities associated with MMM Nigeria

2018 ◽  
Vol 21 (1) ◽  
pp. 112-119 ◽  
Author(s):  
Ehi Eric Esoimeme
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Task Force ◽  
Risk Profile ◽  
Regulatory Enforcement ◽  
Content Type ◽  
Electronic Nature ◽  
Record Keeping ◽  
Face To Face ◽  
Financial Action Task

Purpose This paper aims to help build awareness with the regulatory, enforcement and customs authorities as well as reporting entities about money laundering risks and vulnerabilities of the Mavrodi Mondial Movement (MMM) scheme, and how to mitigate them. Design/methodology/approach The research took the form of a desk study, which analyzed various documents and reports such as the Financial Action Task Force (FATF) typologies reports in 2006, 2008, 2010, 2013 and 2014 on new payment methods (NPMs) which focused on the potential for NPM to be misused by criminals; the identification of risk factors which can significantly differ from one new payment product or service to another, depending on functionality; and risk mitigants which can be tailored to a particular new payment product or service to address its specific risk profile. Findings This paper presents the following findings and recommendations: high-risk customers such as politically exposed persons (PEPs) could exploit the non-face-to-face feature of MMM by using the identity of low-risk customers (e.g. pensioners) to open MMM accounts. The Bitcoin funding option may present a higher money laundering risk than Bank wire, MasterCard, Visa Debit and Interac. The electronic nature of Bitcoins provides in principle a good foundation for effective record keeping and the monitoring of transactions. The money laundering risks associated with Goldmoney are very minimal when compared to Bitcoin. MMM Nigeria is therefore recommended to adopt Goldmoney as its preferred method of online payment for MMM transactions. Originality/value While most publications on MMM are focused on fraud, this paper focuses on the money laundering risks and vulnerabilities associated with the MMM scheme.

scholarly journals A review of money laundering literature: the state of research in key areas

2020 ◽  
Vol 32 (2) ◽  
pp. 271-303 ◽  
Author(s):  
Milind Tiwari ◽  
Adrian Gepp ◽  
Kuldeep Kumar
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Financial Flows ◽  
Content Type ◽  
Future Studies ◽  
Research Themes ◽  
Illicit Financial Flows ◽  
State Of Research ◽  
The Uk

Purpose The purpose of this study is to review the literature on money laundering and its related areas. The main objective is to identify any gaps in the literature and direct attention towards addressing them. Design/methodology/approach A systematic review of the money laundering literature was conducted with an emphasis on the Pro-Quest, Scopus and Science-Direct databases. Broad research themes were identified after investigating the literature. The theme about the detection of money laundering was then further investigated. The major approaches of such detection are identified, as well as research gaps that could be addressed in future studies. Findings The literature on money laundering can be classified into the following six broad areas: anti-money laundering framework and its effectiveness, the effect of money laundering on other fields and the economy, the role of actors and their relative importance, the magnitude of money laundering, new opportunities available for money laundering and detection of money laundering. Most studies about the detection of money laundering have focused on the use of innovative technologies, banking transactions or real estate- and trade-based money laundering. However, the literature on the detection of shell companies being explicitly used to launder funds is relatively scarce. Originality/value This paper provides insights into an area related to money laundering where research is relatively scant. Shell companies incorporated in the UK alone were identified to be associated with laundering £80bn of stolen money between 2010 and 2014. The use of these entities to launder billions of dollars as witnessed through the laundromat schemes and several data leaks clearly indicate the need to focus on illicit financial flows through such entities.

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