Public Interest Disclosure in Labuan Offshore Banking: Is Statutory Intervention Necessary?

Such inquiry like the recent Pandora Papers requires further legislative measure in offshore banking. While banking secrecy is legitimate privacy and viable, it has different character to tax evasion and money laundering activities. This article attempts to analyse public interest disclosure, onshore and offshore banking secrecy law from the perspective of statutory and judicial approaches. Statutory and judicial approaches show that banking secrecy is regarded as strict liability offense in onshore banking. The question arises whether public interest disclosure should be allowed as statutory intervention in Labuan offshore in response to a case like Pandora Papers? This research employs doctrinal analysis to unearth and address a necessary legislative measure for further development in descriptive and prescriptive manner. From the findings, it is evident that statutory intervention is deemed required to assist public interest disclosure for further inquiry and the general rule banking secrecy stated in Section 178 of the Labuan Financial and Securities Services Act 2010 (ACT 704) and Section 139 of the Labuan Islamic Financial and Securities Services Act 2010 (ACT 704). In this case, extensive provisions should be addressed in Section 178 of the Labuan Financial and Securities Services Act 2010 and Section 139 of the Labuan Islamic Financial and Securities Services Act 2010 regarding public interest disclosure within Malaysian offshore context that is fundamentally distinctive from the onshore banking. The forthcoming legislative measure is necessary to prevent such further sail in offshore banking.

Organizational and financial mechanism for ensuring financial and economic security of the banking-system

an organizational and financial mechanism for ensuring the financial and economic security of a commercial bank is proposed, which, in real time and in situations that cannot be controlled using traditional methods, will minimize potential risks and change the internal institutional environment, positively affecting the financial and economic security of the country's banking system. It is shown that economic growth as a factor of national security is supported by the effective functioning of the banking system and the priority of long-term bank loans provided in the form of investments, which makes it possible to determine the relationship between the growth of the country's economy and the level of financial and economic security of the banking system. The main approaches to ensuring the financial and economic security of the banking system are considered, which include the structure of the primary interests of a commercial bank and indicators of the level of financial and economic security of the banking sector of Ukraine in order to ensure economic stabilization and strengthen the economic potential of the bank. It was noted that an adequate and fundamental marketing strategy will help to promote the growth of the bank's profitability, attract additional customers, form a resource base and reduce risk in banking. Mortgage lending is considered as the most effective tool for attracting funds from the population to the investment sector and meeting their needs for housing. A distinctive feature of the presented organizational and financial mechanism is the use of strategic management methods to form economic resources, improve the image and level of security of information systems, organize effective management of the bank's personnel, which will create conditions for ensuring the proper level of protection against negative factors and threats and increasing the competitiveness of the bank due to increasing the efficiency of the provision of banking services, preserving banking secrecy and the client base, creating new banking products

Customer’s awareness, trust, discomfort and acceptance of anti-money laundering practices in Malaysian Banks

Purpose This study aims to examine the associations between customers’ awareness of money laundering and terrorism financing, trust in banking secrecy measures and discomforts in fulfilling the bank’s anti-money laundering (AML) procedure and their acceptance of existing practices of banks regarding AML and counter-terrorism financing. Design/methodology/approach This study adapts a set of survey instruments developed and validated by prior studies to collect the required data. A convenient sample of 160 Malaysian bank customers aged 18 and above were surveyed to collect the data. Findings This study finds a significant relationship between the respondents’ awareness of money laundering and terrorism financing, trust in banking secrecy measures and their acceptance of the bank’s AML and counter-terrorism financing practices. However, no significant relationship is documented between the level of discomforts experienced by customers in satisfying the banks’ AML requirements and their acceptance of the banks’ AML practices. These results hold even after controlling for alternative explanations of the customers’ acceptance of banking practices examined in the extant literature: age, gender, location, literacy level and occupation. Research limitations/implications This study extends the literature on customers’ acceptance of banking practices more broadly by providing empirical evidence on the role of customers’ awareness on issues underlying the banking practices and their trust in the bank’s secrecy measures. Practical implications This study also provides some practical contributions by shedding some light on the factors that could help banks increase the acceptance of AML practices among their customers. Thus, the findings of this paper help banks focus their effort on these factors and hence increase acceptance rate more effectively. Originality/value Drawing on the elements of the theory of reasoned actions and technology acceptance model and the extant research on trust-privacy and comfortability in a banking setting, this study proposes an integrated approach that is theoretically and empirically grounded.

Reflections on legal deficiences and discordances affecting mutual legal assistance in criminal asset recovery

Most of the legal impediments that appears in front of the criminal assets recovery at the international level are the requirements for mutual legal assistance (MLA); excessive banking secrecy; lack of procedures for non-conviction-based confiscation; and excessively difficult procedural and evidentiary laws. Removing legal impediments is obviously essential. Absent a clear and sound legal framework, asset recovery becomes, in a best-case scenario, arduous and, in a worst-case scenario, impossible. Thus, the analysis of the reports of the practitioners in the field at international level, can offer us solutions, which will raise the state to another level. The long process of asset recovery and the low level of cooperation is the best evidence of the shortcomings that stagnate the process of recovering criminal assets.

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

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.

The Emergence of New Corporations

This chapter centres on ‘Luxury Freeports’, which are specialized storage sites where art and other high-end goods can be kept indefinitely without tax and duty-payments being made. The chapter makes the case that Luxury Freeports are best understood as new entrants in the ‘offshore world’, and shows how these sites have, over the course of the last ten years, taken up a new niche role in the evolving global ecosystem of tax avoidance. Further, it examines the rapid spread of this new form of offshore and traces it back to the combination of spillover effects within the offshore world itself. More specifically, Luxury Freeports stem from the juncture of a competitive ‘push’ from the rapid spread of Open Customs Warehouses at the turn of the century and the investment ‘pull’ of large pools of money needing new investment outlets in the wake of the recent multilateral effort to clamp down on banking secrecy.

“ BALANCING BANK SECRECY AND ANTI – MONEY LAUNDERING REGIMES IN BAHRAIN”

Purpose: The paper intends on studying the present regimes of bank secrecy and money laundering provisions that exist globally vis-à-vis drawing a comparison with the present position in Bahrain. The nation of Bahrain is a minor player amongst the international market players of offshore financial institutions. The paper seeks to observe and point out the key practices that are adopted by the nations following a global standard and the practices followed in Bahrain and to address such issues and legal or policy shortfalls in order to understand the extent of complicane with the internationally set standards. The paper shall provide the reader with a quick understanding about the present regime in such activities. Methodology: The paper has been attempted by taking a doctrinal-qualitative analysis approach. The primary sources of research include the various rules and regulations that have been mentioned and a deep understanding and reading has been conducted in order to facilitate the comparison. The paper has also looked into key provisions under the Bahraini Legislation, UN Conventions, IMF recommendations and responses of various international groups and has drawn co-relations with the general set standards and requirements of the major financial bodies and regulators and has also checked if the domestic law is in lines of the set standards and general principles. Research Implications: It has been observed as to how banking secrecy achieves the interest of the bank’s client though the maintenance of confidentiality of the business and also acts as a boost to the bank’s interests by attracting more clients which increases the bank’s economic general interest and profit. The absolute adherence to the norms of bank secrecy may nevertheless play a negative role as it would tend to promote and facilitate the commission of money laundering crimes which bears a negative impact on the nation’s economy. Accordingly, this paper would intend on discussing the extent of the success of the legislation and the measures at the national and international levels that enable banks to maintain their practices of providing financial/banking secrecy without acting as an aide in the facilitation of the crime of money laundering. This can be achieved through the possibility of lifting financial/banking secrecy norms if such measures are necessary to prevent the act of money laundering. Findings: The Author has observed as to how the laws have been made compliant to the set standards of the IMF primarily. The domestic legislations in the global leading economies have been observed to be in lines of such standards and has constantly evolved to meet the growing challenges through time. Importance of Study: The importance of research is highlighted by shedding light on the mechanism of reconciliation between maintaining bank secrecy and combating money laundering operations at the national and international levels. Originality: The paper intends to contribute to the research related to the existing conditions of the laws relating to bank secrecy and money laundering challenges while duly focusing on the present scenario in Bahrain. There is no study that is readily available regarding the position in Bahrain specifically despite of a plethora of material that discusses the aspects of banking secrecy and money laundering on a general level. The Paper has also tried in drawing close relationships between the domestic legislation and the various regulations, mandates, conventions and requirements governing the same.

Optimisation through offshore – between reality and legality

The study highlights the complete image of the characteristics regarding offshore areas, by taking into account the perspective to deploy new measures of fiscal transparency. The importance of such areas stems from the fact that world economies lose important sums of money, every year by default of taxes. This happens as a consequence of corporative international abuse of fiscal evasion and the relocation of the profit made by big companies. The sums resulted from erosion of national taxation bases, from fiscal evasion and fraud and other infringements connected with fiscal evasion (are often being transferred to offshore companies so that their illegal characteristics gets lost and after that to be reintroduced into the economic cycle. The main characteristics of these offshore centres is lack of transparency and cooperation with foreign authorities, fiscal and banking secrecy being considered the guarantee of the offshore areas, measurable variables, fleshes in indicators that reflect the secret degree for each state. Therefore, fighting against such practicies through offshore societies aims at enforcing some measures to enlarge transparency and for the regions do not cooperate there is no granting of fiscal deductibility for transactions that entail the transfer of sums to the respective regions.

Tajemnica bankowa i jej ograniczenia

The purpose of the article is to discuss the issues of banking secrecy and in particular its limitations. The powers of government institutions to information covered by banking secrecy as well as international regulations, which create an automated way of exchanging them, significantly affect the independence of banking secrecy. The above prerogatives have been presented against the background of personal data protection and the privacy rights of clients of financial institutions. All considerations lead to the questions: How important is the banking secret today and how deeply is its mitigation? The composition of the study was based on the dogmatic and descriptive method.

Permissible Restrictions of Bank Secrecy for Tax Control Purposes in the Legal System of the Russian Federation

The article deals with the relationship between bank secrecy and tax transparency. It studies the issues of confidential information (which forms bank secrecy) being presented to tax authorities, also including the principle of providing information on request and automatic data provision within the framework of the Common Reporting Standard. The comparison of bank secrecy and tax transparency is carried out from the viewpoint of its value for the society, state, and individuals. It is noted that the expansion of bank secrecy access for tax authorities can be used not only in tax control, but also to simplify the taxpayers’ payment procedure and other benefits connected with the confidential information, or bank secrecy. The given research paper analyses the problem of broad exemptions from the banking secrecy regime in tax control. The analysis is based on the axiological approach and comparative legal research method based on the analysis of bank secrecy restrictions in the legal systems of Switzerland, Singapore and Russia. The scientific task is to determine the conditions and the necessary degree of bank secrecy restrictions in tax control.