New Peru government promises anti-corruption drive

2016 ◽  
Keyword(s):  
Money Laundering ◽  
Drug Trafficking ◽  
Informal Economy ◽  
Public Life ◽  
Public Institutions ◽  
Illegal Logging ◽  
Legal Systems ◽  
Content Type ◽  
Corrosive Effect ◽  
President Elect

Subject Narcotics and corruption challenges. Significance President-elect Pedro Pablo Kuczynski has promised to crack down on corruption in public life during his term in office. The extent of corruption -- always difficult to quantify -- has increased with the expansion of cocaine production in recent years. Although not the only source of corruption, the scale of cocaine manufacture, trafficking and money laundering is having a corrosive effect on legal systems and faith in public institutions. It is also a factor in citizen insecurity which tops the list of voter concerns. Impacts Drug trafficking occurs in parallel to such other illicit activities as illegal logging and mining. The extent of the informal economy will limit the efficacy of regulation. Drug interests will remain represented in the new Congress, particularly in the majority Fuerza Popular (FP).

Uncoupling the relationship between corruption and money laundering crimes

2016 ◽  
Vol 24 (1) ◽  
pp. 74-89 ◽  
Author(s):  
Norman Mugarura
Keyword(s):  
Money Laundering ◽  
Drug Trafficking ◽  
National Development ◽  
Secondary Data ◽  
The Other ◽  
Small Arms ◽  
Content Type ◽  
The Subject ◽  
Secondary Data Sources ◽  
National Governments

Purpose – Money laundering schemes are inextricably linked to corruption whereby the latter is utilised either as “a means to an end or as an end in itself”. The prevalence of one of these offences in a country usually signifies the prevalence of the other. The foregoing connection is supported by studies carried out by the World Bank and Asian Development Bank to correlate the connection between money laundering and corruption. Corruption has been exploited to facilitate commission of other crimes such as drug trafficking, prostitution, small arms trafficking and illegal currency trafficking. It has destroyed the myth that corruption is a domestic political issue amenable within individual states borders. Therefore, the design of anti-corruption policy measures should incorporate effective implementation anti-money laundering (AML) strategy and their enforcement on corrupt public officials. It needs to be noted that money accrued from corruption constitutes criminal property under the majority of global AML/CFT frameworks which have been domesticated by individual national governments. Both corruption and money laundering thrive in an environment of bad governance, lack of requisite local oversight institutions, a tenuous legal systems and laws and bad governance. These offences have become so intertwined that it is not easy to tell which is which because they are embedded in each other and in the context of this paper are symbiotic. Design/methodology/approach – The paper articulates that there is a close connection between corruption and money laundering offences. It was undertaken by evaluating primary and secondary data sources to demonstrate the interconnectivity of the foregoing criminal offences in the regulatory realm. The overlapping relationship between corruption and money laundering has been acknowledged by many oversight institutions and national governments. For example, Singapore enacted a legislation: “Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act” in (1999) recognizing the foregoing interconnectivity. The G20 imposed on Financial Action Task Force the requirement to incorporate mechanisms within its framework to combat money laundering and terrorist financing measures to fight corruption. Therefore, this paper has demonstrated a close correlation between corruption and money laundering and what ought to be done at various oversight levels to forestall them. Findings – Corruption and money laundering are inextricably linked such that where one exists, the other one will be also lurking in the background. The paper has articulated the connection between corruption and money laundering and the context they are manifested either together or differently. It has demonstrated that the foregoing offences are literally “Keith and Kin” and should be accorded the same level of attention as serious financial crime, both in theory and practice of states. Research limitations/implications – While there are many papers which have been published on the subject of money laundering and corruption, not many articulate the connection between corruption and money laundering in the context of this paper. The paper was undertaken by evaluating primary and secondary data sources and analysing this data in different contexts of this paper. However, it would have been better to corroborate some of the foregoing sources by working with oversight AML/corruption institutions. Therefore, the author will ensure that future studies carried out on the subject matter of money laundering and corruption are undertaken with a high measure of collaboration with oversight AML/corruption agencies and possibly also civil society organisation which have a mandate on these similar issues. Practical implications – This paper is of practical significance for governments, policy and oversight institutions in dealing with issues relating to corruption and money laundering. The paper provides insights into the dynamics of the foregoing twin offences, the context they are manifested and how the law can be better utilised to forestall them. Corruption and money laundering have eviscerated the individual economies capacity to engage in national development programmes, and they need to be addressed as a matter of seriousness, both nationally and internationally. This paper will provide insights into what states need to do to harness the law relating to corruption and money laundering offences, both at an oversight institution and individual national government’s level. Social/implications – Corruption and money laundering crimes have eroded the fabric of societies, eviscerated individual states capacity to pursue national development goals and not to mention fuelling other crimes such as financing of terrorism, human and small arms trafficking, drugs trafficking, to mention but a few. Therefore, no state can afford to ignore the foregoing transgressions against humanity because no state can claim to be immune from the offshoot effects of corruption and money laundering. Originality/value – There are not many published papers which articulate the connection between money laundering and corruption in the context of this paper. This paper is one of its kind, original and a must read. It is a must read because it has a lot offer literally to every one û academics, researchers, students, policy and regulatory institutions and the list goes on.

Rethinking money laundering and drug trafficking

2016 ◽  
Vol 19 (3) ◽  
pp. 298-310 ◽  
Author(s):  
Melvin R.J. Soudijn
Keyword(s):  
Money Laundering ◽  
Drug Trafficking ◽  
Large Scale ◽  
White Collar Crime ◽  
Structured Interviews ◽  
Content Type ◽  
Criminal Investigations ◽  
Three Phase ◽  
To Come ◽  
Financial Intelligence

Purpose In accordance with the literature on money laundering, policymakers and researchers often use a model which distinguishes three successive stages: placement, layering and integration. But how well does this model compare to actual investigations of money laundering in relation to large-scale drug trafficking? Design/methodology/approach The basis is formed by data collected in 2012 for that year’s crime pattern analysis (CPA) for money laundering and cocaine trafficking. In all, 46 structured interviews were conducted. These interviews mostly centred around money laundering, involving the proceeds of drugs crime. As a result of the interviews, the dossiers from 16 criminal investigations were also obtained for further analysis. Findings Comparing the three-phase model with Dutch investigations on drug trafficking, three observations can be made. First of all, cash plays a larger role than the theoretical model would suggest. Second, the proceeds of crime are often moved abroad, circumventing the legal financial system. And third, money laundering often occurs in much simpler forms than the theory would lead one to suspect. Research limitations/implications The sources mainly involve criminal investigations into organized drug trafficking. Investigations involving white collar crime and fraud will probably generate different outcomes. Another caveat is that the situation in other countries may differ from the picture that emerges from the Dutch data. Practical implications Combating money laundering is sometimes a job for specialists, but many forms (involving cash and moving money around) can easily be left to ordinary investigative officers with no financial background. Money laundering therefore needs to be demystified to broaden the opportunities for investigating analyzing and researching money laundering. Furthermore, it is not always practical to depend on Financial Intelligence Unit’s information to start an investigation or to evaluate anti-money laundering efficiency. Originality/value The literature on money laundering often centres around judicial system, legal issues and theoretical solutions. Empirical data is hard to come by. This article uses information from actual investigations to illustrate aspects of money laundering that can be overlooked.

Economic analysis of money laundering prevention in Croatia and Slovenia

2019 ◽  
Vol 22 (1) ◽  
pp. 97-109
Author(s):  
Meta Ahtik ◽  
Ozren Pilipovic ◽  
Miran Marelja
Keyword(s):  
Economic Analysis ◽  
Money Laundering ◽  
Financial System ◽  
Comparative Approach ◽  
Legal Systems ◽  
Economic Analysis Of Law ◽  
Content Type ◽  
Legal Professionals ◽  
Criminal Offenses

Purpose This paper aims to focus on the role of reporting entities, e.g. banks, other financial institutions, legal professionals, in the prevention of criminal offenses connected with money laundering in Croatia and Slovenia. Design/methodology/approach The methodology of the economic analysis of law is used to analyze the effectiveness of laws in Croatia and Slovenia regarding the definition and the role of reporting entities in money laundering prevention in these two countries. A comparative approach is also used as the authors compare the effectiveness of Slovenian and Croatian legal systems and their compatibility with EC Directive (2015/849). Findings The authors find that banks have long clinged to the guaranteed confidentiality of deposits, which means that money laundering has undoubtedly brought them some benefits in the short term. The prevention of money laundering for banks is not free. The measures imposed on the bank by legislation (encouraging these banks to a higher level of demand for preventive behavior) entail costs that go beyond the direct, visible benefits of the implemented measures. However, a functioning and stable financial system has a number of externalities, of course, which are also enjoyed by banks. Originality/value The paper focuses on economic analysis of Croatian and Slovenian legal systems with regards of the regulation of role of reporting entities in the prevention of money laundering which produce certain costs and benefits for the financial system and reporting entities as whole. The paper also uses the comparative approach to address the problem of compatibility of Croatian and Slovenian legal system with the EC Directive (2015/849).

scholarly journals Explaining the informal economy in Western Europe: beyond a rational economic actor perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Colin Williams ◽  
Gamze Oz-Yalaman
Keyword(s):  
Informal Economy ◽  
Western Europe ◽  
Alternative Theory ◽  
Probit Regression ◽  
Content Type ◽  
Social Actors ◽  
The United Kingdom ◽  
Economic Actor ◽  
Expected Benefits ◽  
Practical Implications

PurposeThe dominant theorisation of the informal economy views participants as rational economic actors operating in the informal economy when the expected benefits exceed the perceived costs of being caught and punished. Recently, an alternative theory has emerged which views participants as social actors operating in the informal economy due to their lack of vertical trust (in governments) and horizontal trust (in others). The aim of this paper is to evaluate these competing theorisations.Design/methodology/approachTo do so, data are reported from special Eurobarometer surveys conducted in 2007, 2013 and 2019 in eight West European countries (Austria, Belgium, France, Germany, Ireland, Luxembourg, the Netherlands and the United Kingdom).FindingsUsing probit regression analysis, the finding is that increasing the expected likelihood of being caught and level of punishment had a weak significant impact on the likelihood of participating in the informal economy in 2007, and there was no significant impact in 2013 and 2019. However, greater vertical and horizontal trust is significantly associated with a lower level of participation in the informal economy in all three time periods.Practical implicationsThe outcome is a call for a policy to shift away from increasing the expected level of punishment and likelihood of being caught, and towards improving vertical and horizontal trust. How this can be achieved is explored.Originality/valueEvidence is provided in a Western European context to support a shift away from a rational economic actor to a social actor approach when explaining and tackling the informal economy.

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.

A critical approach to trade-based money laundering

2014 ◽  
Vol 17 (2) ◽  
pp. 230-242 ◽  
Author(s):  
Melvin R.J. Soudijn
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Critical Approach ◽  
Content Type ◽  
Traded Goods ◽  
True Value ◽  
Police Investigations ◽  
Financial Action Task

Purpose – The purpose of this paper is to broaden the discussion on trade-based money laundering (TBML). The literature is too narrowly focused on the misrepresentation of the value, quantity or quality of the traded goods. This focus leads to the analysis of price anomalies as a signal of over- or under-invoicing. However, TBML can also occur without manipulation of these factors. Design/methodology/approach – A review of the literature and case study of police investigations. Findings – Financial action task force (FATF) definitions are seriously flawed. The question of whether detecting TBML on the basis of statistical trade data is effective should be much more open to debate. Police investigations show that goods are shipped at their true value within the context of TBML. Research limitations/implications – Using outliers to identify and act on cases of TBML has often been propagated, but scarcely been used to actually show TBML. Real findings are needed. Practical implications – Goods intended for TBML can also be paid for in cash. These cash payments are often out of character with the normal clientele. This should alert companies and compliance sections of banks alike. Originality/value – The critique on the FATF definition opens the field for a more fitting definition. The description of actual TBML cases makes it possible to better understand this method of money laundering.

An analysis of the forfeiture regime under the anti-money laundering law

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aspalella A. Rahman
Keyword(s):  
Money Laundering ◽  
Secondary Data ◽  
Primary Sources ◽  
Court Cases ◽  
Sources Of Information ◽  
Content Type ◽  
Terrorism Financing ◽  
Bona Fide ◽  
Descriptive Approach ◽  
Insight Into

Purpose This paper aims to analyze the forfeiture regime under the Malaysian anti-money laundering law. Apart from discussing the relevant provisions, several court cases also were examined to identify the problems which arise in the implementation of such a powerful forfeiture regime. Design/methodology/approach This paper mainly relies on statutes and court cases as its primary sources of information. It is supported by secondary data to justify the analysis. This paper also used analytical descriptive approach to analyze relevant forfeiture provisions from statutes and to examine current court cases regarding the implementation of the forfeiture regime. Findings The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLATFPUAA) provides comprehensive procedures for the forfeiture of criminal proceeds. Any limitations of the previous statutory legislations have been addressed, and more importantly, the AMLATFPUAA introduces more powerful and innovative measures that can facilitate the recovery of illegal proceeds from money laundering and any other serious crimes. The AMLATFPUAA also provides avenue for the bona fide third parties to contest the forfeiture order. However, it appears that such right is not easy to be enforced. Originality/value This paper provides an analysis of the forfeiture regime under Malaysian anti-money laundering laws. It is hoped that the content of this paper can provide some insight into this particular area for enforcement authorities, practitioners, academics, policymakers and legal advisers not only in Malaysia but also elsewhere. The findings of this paper also expose any weakness or lacunae in the aspects of application and implementation of the forfeiture regime. Thus, more effective and workable legal solution especially on the issue of civil forfeiture of criminal assets could be considered for further accomplishment.

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.

Estimating the destination of Mexican-based laundered funds: an application of the modified Walker-Unger model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Juan Roman ◽  
Ana Machuca ◽  
Thomas Schaefer
Keyword(s):  
Money Laundering ◽  
Gross National Product ◽  
Physical Distance ◽  
Economic Effects ◽  
Content Type ◽  
Banking Secrecy ◽  
Financial Activity ◽  
Time Period ◽  
Money Launderer ◽  
Practical Implications

Purpose This study aims to apply the modified Walker-Unger model to show the degree of attractiveness of a country for Mexican-based money launderers to send their illicit funds for the 2000–2015 time period. Design/methodology/approach The modified Walker-Unger model is used to conduct the analysis, as it combines several independent variables related to an illicit financial activity. These allow the researcher to investigate the attractiveness of a market to money launderers and the possible economic effects of money laundering. In total, 13 categories of indicators were used, namely, gross national product per capita; banking secrecy; government attitude; society for worldwide interbank financial telecommunication membership; financial deposits; conflict; corruption; Egmont group membership; language; trade; culture, colonial background; and physical distance. Findings Model results suggest the preferred destinations for Mexican-based money launderers from 2000 to 2015 were Bermuda (i.e. from 2000–2004), Canada (i.e. in 2005 and 2006) and Monaco (i.e. from 2007–2015). Research limitations/implications Timing and availability of reliable data after 2015. Practical implications Aids in continuing to empirically validate the Walker-Unger model. There is little literature on models that quantify money laundering activity. Social implications May aid policymakers in targeting anti-money laundering policy to more relevant countries. Originality/value The first empirical investigation that looks to quantify money launderer activity in Mexico. Contributes to the limited literature of quantitative investigations on money laundering.

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