scholarly journals Trade-based money laundering: development of the «red flags» system

2022 ◽  
Vol 7 (4) ◽  
pp. 55-69
Author(s):  
M. G. Girich ◽  
A. D. Levashenko
Keyword(s):  
International Trade ◽  
Financial Market ◽  
Money Laundering ◽  
Financial Data ◽  
Red Flags ◽  
Exchange Of Information ◽  
Foreign Countries ◽  
Intelligence Agencies ◽  
Financial Intelligence

The OECD and the FATF highlight the problem of money laundering via international trade with a view to disguising illicit gains and moving value through the use of trade transactions. For example, inaccurate invoices may be used, which, according to the Global Financial Integrity estimates, resulted in $0,9 trillion to $1,7 trillion losses in 148 countries in 2006–2015. In Russia, the authorities attempt to reduce the risks of money laundering within the framework of international trade through the use of currency regulation, while foreign countries are using a risk-based approach by developing the “red flags” systems that allow financial intelligence agencies, customs and other state bodies as well as subjects of financial market (through which the payments for export-import transactions are made) and the companies participating in international trade themselves to determine whether a transaction entails risks of money laundering. In addition, internal and international inter-agency exchange of information related to money laundering in international trade, including trade and financial data, is being developed.

Artificial harmony

2014 ◽  
Vol 17 (4) ◽  
pp. 428-439 ◽  
Author(s):  
Clifford Williams
Keyword(s):  
Money Laundering ◽  
Information Exchange ◽  
Global Economy ◽  
Task Force ◽  
National Interests ◽  
Content Type ◽  
Network Building ◽  
Primary Means ◽  
Transfer Procedures ◽  
Financial Intelligence

Purpose – The purpose of this paper is to explain that the commonly used method allowing for inter-agency cooperation between national financial intelligence units, the memorandum of understanding, is inadequate and ineffective in creating a cooperative global financial intelligence unit capable of combating money laundering typologies on an international scale. Design/methodology/approach – Methods of international financial intelligence unit (FIU) cooperation have chiefly occurred in two ways: first, through the efforts of the Egmont Group; and second, through the inclusion of provisions concerning FIUs contained in international legal documents. The first is an impossibility. Findings – This paper proposes that the result of implementation of the 2012 Financial Action Task Force Recommendations will be an informal network of FIUs where the Egmont group acts as a centralized operator for information exchange, effectively creating an informal global FIU (“GFIU”), but that this system, or a cooperative global financial intelligence unit system based on FIU-to-FIU exchanges will not allow for effective multilateral, international cooperation. Research limitations/implications – This is because national interests and unfamiliarity with capabilities provided in the Egmont Group’s cooperative platform have and will continue to result in under-utilization of cooperative efforts, and because the traditional mechanism employed for FIU-to-FIU exchanges, the memorandum of understanding (“MOU”), makes uniform or standardized information request and transfer procedures that are required for multilateral or multi-agency efforts to combat money laundering across international boundaries an impossibility. Practical implications – The Egmont Group’s cooperational structure should be the primary means by which to achieve a GFIU. Social implications – The global combat on money laundering will be more effective, thereby more fully protecting the global economy. Originality/value – A comparison between the Egmont Group’s network building mechanism and the existing use of MoU to create global cooperation against money laundering has not been analyzed.

Mafia, money-laundering and the battle against criminal capital: the Italian case

2018 ◽  
Vol 21 (2) ◽  
pp. 124-133 ◽  
Author(s):  
Yara El Siwi
Keyword(s):  
Money Laundering ◽  
Asset Management ◽  
Organised Crime ◽  
Future Research ◽  
Content Type ◽  
Italian Case ◽  
Investment Opportunities ◽  
To Come ◽  
Financial Intelligence ◽  
The Relationship

Purpose This paper aims to look at the case of Italy, which clearly stands out in its relationship with organised crime. The recognition that money is the “lifeblood” of OC has resulted in the implementation of what we can refer to as the anti-money laundering (AML) regime, which backs the systematic targeting of mafia assets and the application of severe obstacles to the concealment of dirty money through increased financial surveillance. This paper discusses the financialisation of counter-mafia strategies, with the purpose of questioning the extent to which this system has been delivering what it promised. Design/methodology/approach The paper is divided into three chapters. The first chapter looks at the relationship between Italian mafia and dirty money. The second chapter discusses the rationale and pillars of the AML regime. Finally, the last section examines and discusses recent evidence of the outcome of AML policies, by looking at figures as reported by relevant entities, such as the Financial Intelligence Unit (FIU), Europol, the Italian Ministry of Interior and the Direzione Investigativa Anti-Mafia (DIA). Findings Evidence suggests that financial surveillance, the first pillar of the AML regime, is much costlier than it is beneficial to society. Reporting of suspicions has rocketed in the past years, bringing very little change to yearly ML convictions, and being only marginally helpful in mafia-related investigations, confiscations and arrests. The confiscation of assets from mafia members, i.e. the second pillar of the AML regime, has proven to be effective in gaining control over large sums and goods. However, more research is needed around the question of confiscated asset-management and desirable re-investment opportunities. Originality/value As the AML regime gains in prominence internationally, it is of great value to assess its achievements so far. This is especially true of a country like Italy, which suffers from a long-standing mafia dominance. This paper represents a modest initial inquiry, which will hopefully be complemented by future research to come to an in-depth understanding of the value and limitations of an AML regime in fighting OC.

Right of Entry: The Struggle over Recognition in the World of Intelligence

2020 ◽  
Vol 1 (2) ◽  
pp. 243-272
Author(s):  
Anthony Amicelle
Keyword(s):  
Field Theory ◽  
Social Control ◽  
Shape Function ◽  
Intelligence Agency ◽  
The World ◽  
Intelligence Agencies ◽  
New Type ◽  
The Right ◽  
Financial Intelligence ◽  
First Time

Abstract This article aims to question the birth, and subsequent search for recognition, of a new type of intelligence agency, which appeared in the early 1990s and is now institutionalised in a vast majority of states across the world: “Financial intelligence units”. It sheds light for the first time on the modalities of access of one of these agencies to the field of security. Following Pierre Bourdieu’s field theory, it thus raises the question of the “right of entry” of a new actor to a specific social universe, e.g. “the conditions and modalities for access to a particular ‘field’ at a given time in its history”. Understanding how such intelligence agencies take shape, function and interact with the security-related recipients of their intelligence is crucial for at least two reasons, regarding the policing of illicit capital and associated crimes, and the use of intelligence in contemporary strategies of social control.

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.

PERIODIC COMPONENTS AND CHARACTERISTIC TIME SCALES IN THE FINANCIAL MARKET

2008 ◽  
Vol 22 (26) ◽  
pp. 2571-2578 ◽  
Author(s):  
CHUNXIA YANG ◽  
HONGFA WU ◽  
YINGCHAO ZHANG
Keyword(s):  
Fourier Transform ◽  
Financial Market ◽  
Abnormal Return ◽  
Characteristic Time ◽  
Financial Data ◽  
Data Sets ◽  
Fast Fourier Transform Algorithm ◽  
Periodic Fluctuation ◽  
Mode Decomposition ◽  
Periodic Components

Based on six large empirical data sets, the financial data sequences are decomposed by Empirical Mode Decomposition (EMD) into various quasi-periodic fluctuation modes, including weekly, half-month, seasonal, about-four-years and so on, which may indicate some abnormal return oscillation patterns. The corresponding average periods are calculated by Fast Fourier Transform Algorithm (FFT), about 6 days for the weekly, about 10 days for the half-month, about 60 days for the seasonal and 1020 days or so for the about-four-years. These obtained results show that the mode periods may be universal for different markets.

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.

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