Asset recovery practices in combating money laundering: evidence from FATF mutual evaluation report of FATF member countries of Asia pacific region

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Salwa Zolkaflil ◽  
Sharifah Nazatul Faiza Syed Mustapha Nazri ◽  
Normah Omar
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Evaluation Report ◽  
Content Type ◽  
Management Framework ◽  
Recovery Mechanism ◽  
Asset Recovery ◽  
Current Asset ◽  
Recovery Management ◽  
Mutual Evaluation

Purpose This study aims to understand the member countries’ current asset recovery mechanism based on two elements, namely, confiscation policy and asset recovery management framework. Design/methodology/approach Content analysis was performed on the Financial Action Task Force (FATF) Mutual Evaluation Report (MER) of eight countries. Findings The result showed that only a few countries established a centralised asset recovery centre or special task force to manage recovered assets. Research limitations/implications This study is limited to information mentioned in the FATF MER. Practical implications This study highlights the need to have a centralised asset recovery management centre as an initiative to improve the outcome of money laundering investigations. The study findings will benefit regulators to understand further the practical challenges of the asset recovery mechanism for future improvement. Originality/value FATF recommends that each country establish a centralised asset recovery centre and work closely with the investigating officers and prosecutors in deciding on assets confiscation. However, the implementation is contingent on their local environment and resources at the member countries’ discretion. Therefore, this study aimed to understand the member countries’ current asset recovery mechanism based on two elements, namely confiscation policy and asset recovery management framework.

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.

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.

Measures to combat money laundering and terrorist financing in Palestine

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Murrar Firas
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Evaluation Process ◽  
Vital Role ◽  
Assessment Process ◽  
National Committee ◽  
Content Type ◽  
Terrorist Financing ◽  
Mutual Evaluation ◽  
Combat Money Laundering

Purpose The purpose of this paper is to analyse the evolution of anti-money laundering/combating the financing of terrorism (AML/CFT) procedures in Palestine since 2004 in accordance with the standards issued by the Financial Action Task Force (FATF). Design/methodology/approach This study is qualitative in nature and involves studying the most important improvements made by Palestinian authorities in the state’s legislative and institutional frameworks to enhance the AML/CFT regime. Findings Palestine has established the necessary legal basis to combat money laundering and terrorist financing crimes. At the institutional level, the Financial Follow-up Unit was granted all the required powers of Financial Intelligence Units. The National Committee for Combating Money Laundering and Financing Terrorism has also played a vital role in issuing policies and plans to respond to the outcomes of the National Risk Assessment process. In contrast, a number of challenges still exist mainly with respect to the political factors and their expected consequences on the process of preparing for and conducting the mutual evaluation process for Palestine. Originality/value This study focusses on the AML/CFT efforts in Palestine owing to the nature and specificity of the Palestinian situation, as Palestine’s AML/CFT procedures have not been subject to any previous mutual evaluation process by the MENAFATF. Such efforts have rarely addressed the Palestinian case, making this study important to researchers and those interested in this field.

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.

Updates on Hong Kong’s anti-money laundering laws

2018 ◽  
Vol 21 (3) ◽  
pp. 290-296 ◽  
Author(s):  
Foster Hong-Cheuk Yim ◽  
Ian Philip Lee
Keyword(s):  
Hong Kong ◽  
Money Laundering ◽  
Task Force ◽  
Case Law ◽  
Content Type ◽  
Legislative Council ◽  
Salient Points ◽  
Financial Action Task ◽  
Mutual Evaluation ◽  
International Financial Center

Purpose The purpose of this study is to discuss the latest developments of anti-money laundering (AML) laws in terms of case law and intended legislation amendments. Design/methodology/approach In terms of AML case law, the authors analyze three judgments from the Hong Kong Court of Final Appeal. In terms of the intended legislation amendments, the authors outline salient points from the two amendment bills submitted to the Legislative Council of Hong Kong. Findings With the developments in AML case law and the intended legislation amendments, Hong Kong is expected to have a positive result in the Financial Action Task Force Mutual Evaluation in October/November 2018. Originality/value A robust AML/counter-terrorist financing regime is the bedrock of Hong Kong’s reputable status as an international financial center. This paper seeks to illicit meaningful interactions amongst all stakeholders.

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.

Legitimacy of the Summer 2017 GCC crisis and Qatar’s AML framework

2017 ◽  
Vol 20 (4) ◽  
pp. 405-416 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
United Nations ◽  
Money Laundering ◽  
Task Force ◽  
Financial Sector ◽  
Content Type ◽  
Terrorist Financing ◽  
The World ◽  
Regulatory Bodies ◽  
Financial Action Task ◽  
Mutual Evaluation

Purpose In June 2017, members of the Gulf Cooperation Council (GCC) ended diplomatic ties with Qatar. There is a legitimate concern about the accusation levied on Qatar. This paper aims to analyse the progress Qatar’s financial system has made with respect to its anti-money laundering (AML) and counter-terrorist financing (CFT) regulations, which further serves as the country’s effort to combating the financing of terrorism (CTF). The paper further wishes to advance the discussion by considering the legitimate goals of the aforementioned bodies and their discourse on creating national and international obligations towards reducing terrorist financing through robust AML frameworks. Design/methodology/approach The paper analyses Qatar’s legislative and regulatory overhaul following the Financial Action Task Force’s Mutual Evaluation Report. Qatar had distinctively strengthened its approach against Money Laundering and Terrorist Financing. The paper takes an ex ante approach by understanding Qatar’s “strategic deficiencies” before the FATF’s mutual evaluation. Subsequently, the paper studies independent international evaluations of Qatar’s AML/CTF legislation and regulation. Findings The paper finds Qatar in significant compliance to the recommendations of the various international bodies, including the Financial Action Task Force (FATF), Basel AML Index, IMF’s financial sector reviews, United Nations and independent reports on AML progress from regulatory bodies around the world. None of these organizations present obligatory rules but have set and determined and international standard for AML/CTF laws. Originality/value The primary aim is to draw parallels between Qatar’s regulatory AML and CTF efforts through the country’s compliance with international initiatives, such as the FATF guidelines, Basel AML Index, IMF’s financial sector reviews, United Nations and independent reports on AML progress from regulatory bodies around the world.

Fortifying a risk-based approach in the South African AML/CFT process

2017 ◽  
Vol 24 (4) ◽  
pp. 520-528
Author(s):  
Johan Henning ◽  
Mignon Hauman
Keyword(s):  
Risk Management ◽  
South African ◽  
Task Force ◽  
Business Relationship ◽  
The South ◽  
Evaluation Report ◽  
Content Type ◽  
Compliance Program ◽  
Financial Intelligence ◽  
Mutual Evaluation

Purpose The purpose of this paper is evaluate the provisions of Financial Intelligence Centre Act Amendment Bill, 2016 which intends to give effect to the implementation of the envisioned risk-based approach in anti-money laundering/combating financing of terrorism (AML/CFT) processes, as well as the extent to which the provisions address certain technical shortcomings elucidated in 2009 Mutual Evaluation Report concerning South Africa’s AML/CFT’s framework. Design/methodology/approach Sources of information consisted of scholarly articles, articles retrieved from the Web, news reports, reports published by national and international regulatory bodies, legislation and draft legislation. Findings Findings suggest that the South African legislature not only addresses the particular shortcomings specifically highlighted in the 2009 Mutual Evaluation Report comprised by the Financial Action Task Force but also requires the establishment of a framework for the realisation of a risk-based approached in every “risk” scenario and on an on-going basis. Practical implications Accountable institutions will be required to establish and implement a Risk Management and Compliance Program which must provide both the framework and the strategy for the execution of the risk-based approach when establishing a business relationship, during the course of administrating the business relationship as well as when concluding any single transaction in pursuit of the business relationship. Originality/value This paper serves to alert accountable institutions, compliance and corporate governance professionals and AML and counter-terrorist financing practitioners of the risk-based approach South African accountable institutions will be obliged to implement in their AML/CFT processes, the extent to which a risk-based approach must be incorporated and the aspects that must be provided for in terms of the mandated Risk Management and Compliance Program once the Financial Intelligence Centre Act Amendment Bill, 2016 is signed into law.

Anti-money laundering and combating the financing of terrorism compliance

2019 ◽  
Vol 22 (3) ◽  
pp. 451-471 ◽  
Author(s):  
Emmanuel Senanu Mekpor
Keyword(s):  
Money Laundering ◽  
High Frequency ◽  
Task Force ◽  
Developed Countries ◽  
Individual Country ◽  
Content Type ◽  
Financial Action Task ◽  
Financing Of Terrorism ◽  
The Individual ◽  
Mutual Evaluation

Purpose The purpose of this paper is to investigate how well countries comply with global anti-money laundering and counter-financing of terrorism (AML/CFT) regulations. Design/methodology/approach With the help of an AML/CFT compliance index composed by the author, this study is able to numerically quantify countries’ AML/CFT compliance levels. Countries were selected based on their membership with the Financial Action Task Force (FATF), precisely members who have gone through at least one round mutual evaluation and have duly submitted a report to the task force. The AML/CFT index was composed by assigning numeric values to the individual country ratings across all 49 FATF recommendations contained in their mutual evaluation reports (MER). Findings Some notable findings include the yearly global level of AML/CFT compliance between the period 2004 and 2016, as well as compliance levels across continents for the same period. Compliance levels for the seven components of the FATF recommendations were also reported to help assess which set of recommendations countries comply with the most and why they do. It was also found that countries’ lack of compliance was as a result of high cost of compliance with FATF recommendations. Research limitations/implications The main limitation of this study was a lack of high-frequency AML data of countries, especially less-developed countries. Originality/value The uniqueness of this paper lies in the fact that the AML/CFT compliance index constructed and used in the study is the first of its kind.

Measuring Qatar’s compliance with international standards on money laundering and countering the financing of terrorism

2016 ◽  
Vol 19 (3) ◽  
pp. 264-277 ◽  
Author(s):  
Jon Truby
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Research Field ◽  
International Standards ◽  
International Terrorism ◽  
Regulatory Requirements ◽  
Content Type ◽  
Financial Action Task ◽  
Financing Of Terrorism ◽  
Mutual Evaluation

Purpose Under scrutiny in light of the growing threat of international terrorism, Qatar faces pressure and accusations that it is not doing enough to counter terror financing and clamp down money laundering. The issue is not that Qatar is avoiding positive action, but that by the time measures are implemented, they become outdated because the international community has by then tightened its regulatory requirements. Qatar’s slow pace has led to a case of cat-and-mouse chase with respect to updating its standards, with a revised set of rules being required by the time Qatar implements the last set of international standards. This study aims to draw on lessons from the past to help Qatar avoid findings of it falling below international standards in the upcoming 2017 mutual evaluation. Design/methodology/approach The primary purpose of this article is to catalogue Qatar’s efforts to comply with international anti-money laundering (AML) and anti-terror finance standards. It demonstrates the real legislative progress post-2008 recorded by Qatar to minimize money laundering and terrorist financing. The paper also contests the view that Qatari law is insufficient. Findings The paper explains Qatar’s efforts to comply with the recommendations made by each evaluation by the Financial Action Task Force (FATF). It also highlights the potential for Qatar to be caught out again by the evolution of international expectations in an upcoming review, which, it is understood, is likely to take place in 2017. Originality/value No article exists specifically on this research field. As Qatar prepares for its 2017 FATF evaluation, it should be reminded of the need to comply with all new standards.

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