Kuwait’s Administrative Risk-based Model for the Prevention of Money Laundering: Costs and Benefits of Compliance with the Financial Action Task Force (fatf) Standards

2017 ◽  
Vol 31 (2) ◽  
pp. 101-133
Author(s):  
Asim Jusic
Keyword(s):  
Money Laundering ◽  
Structural Changes ◽  
Preventive Measures ◽  
Task Force ◽  
Costs And Benefits ◽  
Financial Action Task ◽  
Administrative Model ◽  
Financing Of Terrorism ◽  
Financial Intelligence ◽  
New Framework

During the period from 2013-2015, Kuwait adopted the new administrative risk-based anti-money laundering and combating the financing of terrorism (aml/cft) regulatory framework. This article analyses the costs and benefits of the compliance of the new framework with the fatf’s standards, focusing on the structural changes: (1) a move from a hybrid-prosecutorial to a fully-fledged administrative model of financial intelligence unit; (2) adoption of the risk-based approach to the prevention of money laundering and terrorist financing (ml/tf); and (3) the increase in reporting obligations and preventive measures. The main argument advanced in the article is that while the new framework is highly compliant with fatf standards and will maintain the already low level of ml/tf in Kuwait, in comparison with the pre-2013 anti-money laundering regulations, the costs of compliance for reporting parties and clients are higher, and outweigh the benefits. The article suggests how to respond to this and other challenges.

Suspicious transaction reporting: an Indian experience

2015 ◽  
Vol 18 (1) ◽  
pp. 2-16 ◽  
Author(s):  
B. Viritha ◽  
V. Mariappan ◽  
Irfan Ul Haq
Keyword(s):  
Money Laundering ◽  
Reporting System ◽  
Task Force ◽  
Annual Reports ◽  
Content Type ◽  
Suspicious Transaction ◽  
Financing Of Terrorism ◽  
Secondary Information ◽  
Financial Intelligence ◽  
The Impact

Purpose – The purpose of this paper is to assess the effectiveness of anti-money laundering (AML) reporting system in India in terms of Suspicious Transaction Reports (STRs) and its impact on countering money laundering through the conviction and confiscation. The main emphasis of financial action task force (FATF) guidelines on AML and countering of financing of terrorism (CFT) is the obligation of financial institutions and designated non-financial businesses and professions to instantaneously report the suspicious transactions to Financial Intelligence Unit (FIU), an agency with a mandate to deal with AML. Design/methodology/approach – It is a descriptive study to explore the outcome of the AML process. The study has used the secondary information published in the annual reports of FIU-India and FATF. The study period is 2006-2007 to 2011-2012. Findings – Though there is a significant increase in the STRs filed, the impact of AML is not realized in terms of neither AML-related convictions nor confiscations, since the enactment of the Prevention of Money Laundering Act (PMLA). However, the AML/CFT regime in India has just started earnestly, and it still has to go a long way before stabilizing and achieve tangible results. Research limitations/implications – In the Indian context, only few of the effectiveness indicators of the FATF methodology 2013 could be selected due to the limited availability of data, as much of the information maintained by various stakeholders, including reporting entities, FIU-India and other investigative and enforcement agencies, is kept confidential. Thus, it is difficult to establish the effectiveness of enforcement function of AML. Evaluation of effectiveness of AML is judged on the basis of convictions and confiscations. Originality/value – There is a dearth of studies assessing the reporting system under PMLA and thus this paper attempts to throw some insights on the outcome of AML chain, especially the impact of reporting suspicious transactions.

The Nigerian Money Laundering (Prevention and Prohibition) Bill, 2016: a critical appraisal

2017 ◽  
Vol 20 (1) ◽  
pp. 79-88 ◽  
Author(s):  
Ehi Eric Esoimeme
Keyword(s):  
Money Laundering ◽  
Critical Appraisal ◽  
Task Force ◽  
Director General ◽  
Financial Action Task Force ◽  
Content Type ◽  
High Court ◽  
Customer Information ◽  
Financial Action Task ◽  
Financial Intelligence

Purpose This paper aims to critically examine the Money Laundering (Prevention and Prohibition) Bill, 2016. It also aims to determine the level of effectiveness of the preventive measures in the Bill. Design/methodology/approach The appraisal took the form of a desk study, which analyzed various documents and reports such as the Financial Action Task Force Recommendations 2012, Mutual Evaluation Reports conducted by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) on Nigeria, the judgment delivered by Justice Gabriel Kolawole of the Federal High Court Abuja and the United Kingdom’s national risk assessment of money laundering and terrorist financing. Findings This paper determined that the Bill could achieve its core objectives if the following recommendations are implemented: section 15 of the Bill should be modified to include the definition of “Arrangement”; lawyers should be allowed to send their Suspicious Transaction Report to the Nigerian Bar Association, provided that there are appropriate forms of cooperation between the NBA and the Financial Intelligence Unit, and this approach is in line with the Financial Action Task Force Recommendations; the Bill should expressly prohibit retaliation by employers against whistleblowers and provide them with a private cause of action in the event that they are discharged or discriminated against by their employers, and this approach is being adopted by the US Dodd–Frank Act; a request for customer information, by the Director-General of the Nigeria Financial Intelligence Centre, should be made pursuant to an order of the Federal High Court obtained upon an ex-parte application supported by a sworn declaration by an authorized officer of the Centre, justifying the request for customer information. Originality/value This paper offers a critical appraisal of the Money Laundering (Prevention and Prohibition) Bill, 2016. The paper will identify the strengths and weaknesses of the Bill. This is the only paper to adopt this kind of approach.

scholarly journals FATF Guidance on Effective Oversight in the AML/CFT System

2018 ◽  
Vol 3 (2) ◽  
pp. 190 ◽  
Author(s):  
Andronov M.Y. ◽  
Leonov P.Y.
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Limited Resources ◽  
Financial Action Task Force ◽  
Financial Action Task ◽  
Financing Of Terrorism ◽  
The One ◽  
Financial Monitoring ◽  
Fourth Round ◽  
Oriented Approach

Fourth round of mutual evaluations of the FATF (financial action task force on money laundering, the Financial Action Task Force on Money Laundering, FATF) was held already in 38 countries around the world. In 2018 Russia will be cheсked.One of the elements of anti-money laundering system is the oversight activities. FATF gives guidance on its effective building. It should be provided with the risk-oriented approach. On the one hand, in order to apply its limited resources to the most dangerous areas. On the other hand, does not interfere the development of legal entrepreneurs with redundant oversight actions.The purpose of this article is to attract attention of specialists for financial monitoring to Guide FATF on the application of risk-oriented approach to oversight for AML/CFT purposes. Keywords: Legalization, countering the financing of terrorism, supervision in the sphere of AML, risk-oriented approach

Revisions to the Financial Action Task Force (FATF) Standard - Information Note to the Executive Board

Policy Papers ◽  
2012 ◽  
Vol 2012 (57) ◽  
pp. 1
Author(s):  
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
International Standards ◽  
Executive Board ◽  
Financial Action Task Force ◽  
Standard Information ◽  
Financial Action Task ◽  
Financing Of Terrorism

The purpose of this note is to inform the Executive Board of the amendments made to the standard on anti-money laundering and combating the financing of terrorism (AML/CFT). The Financial Action Task Force (FATF)—the standard setter for AML/CFT—adopted on February 16, 2012 a revised standard, now entitled the “International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation: the FATF Recommendations.”

The determinants of anti-money laundering compliance among the Financial Action Task Force (FATF) member states

2018 ◽  
Vol 26 (3) ◽  
pp. 442-459 ◽  
Author(s):  
Emmanuel Senanu Mekpor ◽  
Anthony Aboagye ◽  
Jonathan Welbeck
Keyword(s):  
Money Laundering ◽  
Banking Sector ◽  
Task Force ◽  
Ordinary Least Squares ◽  
Member States ◽  
Financial Action Task Force ◽  
Content Type ◽  
Regulatory Quality ◽  
Financial Action Task ◽  
Financial Intelligence

Purpose This paper aims to compute a measure for anti-money laundering/counter-financing of terrorism (AML/CFT) compliance and investigate its determinants. Design/methodology/approach Using the Financial Action Task Force (FATF) recommendations and assigning weights to them, the study computes a measure for AML compliance. Further, the determinants of AML compliance were investigated using ordinary least squares (OLS) data of 155 countries between 2004 and 2016. Findings The findings suggest that AML compliance have slightly improved over the years. Further, the OLS regression results show that technology, regulatory quality, bank concentration, trade openness and financial intelligence center significantly determined and improved AML compliance. Practical implications From the findings, it is evident that countries that wish to improve the AML compliance should focus more on technology, regulatory quality, structure of the banking sector, size of the economy and institution of financial intelligence center so as to enhance AML compliance. Originality/value To the best of the author’s knowledge, this paper reveals a first AML/CFT compliance index that measures the cross-country level of AML/CFT compliance from the year 2004 to 2016. Subsequently, this paper adopted an OLS econometric model to identify the key determinants of AML/CFT compliance among member states of FATF.

Similar in Their Differences: Transnational Legal Processes Addressing Money Laundering in Brazil and Argentina

2012 ◽  
Vol 37 (02) ◽  
pp. 330-366 ◽  
Author(s):  
Maira Machado
Keyword(s):  
Comparative Analysis ◽  
Money Laundering ◽  
Task Force ◽  
Analytical Framework ◽  
State Change ◽  
Different Dimensions ◽  
Financial Action Task ◽  
Financial Intelligence ◽  
Output Legitimacy ◽  
Legal Processes

The purpose of this article is to provide a comparative analysis of the transnational legal processes that Brazil and Argentina underwent to address money laundering. The article discusses the interaction between the Financial Action Task Force (FATF) norms and a number of changes both countries have experienced in the last decade. The comparison focuses on the three central pillars of the anti-money laundering order (AMLO): criminalization, administrative obligations imposed on the financial sectors, and the creation of a financial intelligence unit. Building from the analytical framework developed by Shaffer (2011), the evidence gathered in this study illustrates different dimensions of state change and highlights the main challenges to assess the effectiveness (output legitimacy) of transnational legal orders empirically.

scholarly journals The Formal, Financial and Fraught Route to Global Digital Identity Governance

2021 ◽  
Vol 4 ◽  
Author(s):  
Malcolm Campbell-Verduyn ◽  
Moritz Hütten
Keyword(s):  
Media Studies ◽  
Money Laundering ◽  
International Organizations ◽  
Task Force ◽  
Centralized Control ◽  
Digital Identity ◽  
Financial Flows ◽  
Intergovernmental Organization ◽  
Financial Action Task ◽  
Financing Of Terrorism

How can we understand the progressive, piecemeal emergence of global digital identity governance? Examining the activities of the Financial Action Task Force (FATF) - an intergovernmental organization at the center of global anti-money laundering and counter-the-financing of terrorism governance-this paper advances a two-fold argument. First, the FATF shapes how, where and who is involved in developing key standards of acceptability underpinning digital identity governance in blockchain activities. While not itself directly involved in the actual coding of blockchain protocols, the FATF influences the location and type of centralized modes of control over digital identity governance. Drawing on the notion of protocological control from media studies, we illustrate how centralized control emerging in global digital identity governance emanates from the global governance of financial flows long considered by international organizations like the FATF. Second, we suggest that governance by blockchains persistently shapes the ability of the FATF to stem illicit international financial flows. In highlighting both the influence of FATF on blockchain governance and blockchain governance on the FATF, we draw together two strands of literature that have been considered separately in an analysis of the formal, financial and fraught route to global digital identity governance.

scholarly journals People’s Republic of China

2019 ◽  
Vol 19 (172) ◽  
pp. 1
Author(s):  
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
People’S Republic Of China ◽  
People's Republic Of China ◽  
Financial Action Task Force ◽  
Republic Of China ◽  
Financial Action Task ◽  
Financing Of Terrorism

This report provides a summary of the anti-money laundering/combating the financing of terrorism (AML/CFT) measures in place in the People’s Republic of China (China)1 as at the date of the onsite visit (July 9–27, 2018). It analyzes the level of compliance with the Financial Action Task Force (FATF) 40 Recommendations and the level of effectiveness of China’s AML/CFT system and provides recommendations on how the system could be strengthened. China has undertaken a number of initiatives since 2002 that have contributed positively to its understanding of ML/TF risk, although some important gaps remain. Its framework for domestic AML/CFT cooperation and coordination is well established.

Panama faces FATF greylisting

2019 ◽  
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Tax Evasion ◽  
Task Force ◽  
Capital Flight ◽  
Content Type ◽  
National Assembly ◽  
Legislative Proposal ◽  
Financial Action Task ◽  
Financing Of Terrorism

Significance The move comes despite the passing of a long-delayed legislative proposal by Panama’s National Assembly on January 31 to make tax evasion a criminal (rather than administrative) offence -- the latest in a series of efforts to improve Panama’s image. The Financial Action Task Force (FATF) -- the international standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT) -- will publish an assessment of Panama this month, before deciding whether to 'greylist' it around June. Impacts Poor AML controls leave Panama vulnerable to the entrance of funds from the expanding cocaine trade in neighbouring Colombia. Greylisting would hit local financial institutions' access to US correspondent banks, raising international transaction and transfer costs. Capital flight is possible by financial institutions seeking to avoid international regulatory risks associated with Panamanian operations.

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