Journal of Money Laundering Control
- Emerald Group Publishing Limited
- Publication date:
- Nbr. 23-2, January 2020
- Nbr. 23-1, January 2020
- Nbr. 22-3, July 2019
- Nbr. 22-2, May 2019
- Nbr. 22-1, January 2019
- Nbr. 21-4, October 2018
- Nbr. 21-3, July 2018
- Nbr. 21-2, May 2018
- Nbr. 21-1, January 2018
- Nbr. 20-4, October 2017
- Nbr. 20-3, July 2017
- Nbr. 20-2, May 2017
- Nbr. 20-1, January 2017
- Nbr. 19-4, October 2016
- Nbr. 19-3, July 2016
- Nbr. 19-2, May 2016
- Nbr. 19-1, January 2016
- Nbr. 18-4, October 2015
- Nbr. 18-3, July 2015
- Nbr. 18-2, May 2015
- Canada’s financial intelligence unit: FINTRAC
Purpose International bodies, such as the Financial Action Task Force , have mandated the use of financial intelligence units (FIU) to address organized crime and money laundering. The purpose of this paper is to examine Canada’s FIU, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and explore its current effectiveness and future challenges. Design/methodology/approach This paper examines FIUs in general and then looks more specifically at Canada’s FIU, its policy and legislative basis as well as future challenges for the FIU. Findings The challenge money laundering poses to society is a mirror of the challenge that organized crime poses: a test of the values and the importance of rule of law. The FIU is an important mechanism to address this challenge generally, and there are important changes in the environment that must be addressed if the future policy objectives of the FIU are to be met. Research limitations/implications Some of the policy nostrums that are baked into the anti-money laundering system, such as placement, layering and integration, need to be revisited and researched to incorporate changes in the licit and illicit marketplaces. Practical implications Financial institutions and other intermediaries must comply with domestic anti-money laundering laws. Compliance is always contextual, and this paper will outline the role of the regulator and the environmental challenges that need to be met. Social implications Effectively addressing money laundering and organized crime is critical to the maintenance of rule of law and the protection of the financial system. Originality/value This is a brief but very fulsome review of Canada’s FIU, FINTRAC, which captures broader challenges in addressing money laundering, economic crime and regulatory systems designed to protect rule of law and the integrity of the financial system. The paper not only examines the current state of the FIU but also explores challenges on the horizon.
- Seeking economic cyber security: a Middle Eastern example
Purpose The transformation of the United Arab Emirates (UAE) into an important global economic player has been accompanied by digitalization that has also left it at a risk to cybercrime. Concurrent with the rise in technology use, the UAE fast became one of the most targeted countries in the world. The purpose of this paper is to discuss how the UAE has tried to cope with accelerating levels of cyber threat using legislative and regulatory efforts as well as public- and private-sector initiatives meant to raise cybersecurity awareness. Design/methodology/approach The paper surveys the UAE’s cybersecurity legislative, regulatory and educational initiatives from 2003 to 2019. Findings Because the human factor still remains the number one reason for security breaches, robust cyber laws alone are not enough to protect against cyber threats. Building public awareness and educating internet users about cyber risks and safety have become essential components of the UAE's efforts in building a more secure cyber environment for the country. Research limitations/implications The paper relies on English-language translations of primary sources (laws) originally in Arabic, as well as English-language studies from local media. This should not be considered a problem, as English is established as the language of business and commerce in the UAE. Practical implications The paper provides a detailed overview of the country’s cybersecurity environment to guide and aide practitioners with risk assessment and legal and regulatory compliance. Originality/value The paper presents a comprehensive overview of the UAE’s cybersecurity legislative, regulatory and educational environment. It also surveys government and private sector initiatives directed in protecting the country’s cyberspace.
- A causal model of the declaration intention of banks for suspected money-laundering transactions based on organizational commitment perspective
Purpose Anti-money laundering has attracted much global attention, driving banks to invest in the establishment of suspicious transaction report mechanisms for the declaration of suspicious transactions. However, very few studies discuss how to influence bank employees to proactively declare suspicious transactions. Therefore, the purpose of this study is to, based on an organizational commitment perspective, establish a causal model that can assist banks to identify key factors affecting the intention to declare suspicious transactions. Design/methodology/approach This study first summarized five factors - regulatory focus, organization climate, situational constraints, personality traits and role stress - and their composition constructs as the basis for measurements. An interview-based survey of nine Taiwanese banks was conducted. Then, this study adopted the decision-making trial and evaluation laboratory method to analyse the interplay between the five factors to identify the causal model and to explore the differences in the effects of the key factors, arising from the different organizational and job patterns, on the intention to declare suspicious transactions. Findings The results show that regulatory focus and organizational climate are the most important causal factors affecting employees’ intention to declare suspicious transactions, whereas role stress and personality traits are the most influenced effect factors. In addition, this study also confirmed that under different organizational and job patterns, the understanding of employees will change. Originality/value This paper provides insight into the interplay between the five factors based on an organizational commitment perspective. The findings can assist banks in managing and monitoring the implementation of the suspicious transaction report mechanism.
- Challenges of accountability in Nigeria: the role of deposit money bank
Purpose The unhealthy drive for deposit in the banking sector has pushed many banks into unethical practices, thereby resulting in high-level corruption cases in the banking sector. The purpose of this study is to investigate the short- and long-run linkages between bank net interest income and deposit liabilities interacted with corruption, to establish the influence of corruption in deposit mobilisation drive of banks in Nigeria. Also, the study analysed the causal relationship between selected bank variables and fraud. Design/methodology/approach The study used quarterly data on selected variables from 1Q 1993 to 4Q 2017 sourced from Nigerian Deposit Insurance Corporation (NDIC) annual reports and Central Bank of Nigeria (CBN) Statistical Bulletin of various issues. Deposit Money Bank various deposit liabilities are interacted with a corruption index and used as the independent variables, while bank earnings serve as the dependent variable. Error Correction Model (ECM) and Engel Granger approach to co-integration technique were used to analyse the data. Findings The findings reveal that various bank deposit liabilities interacted with corruption index has a negative effect on bank profitability in the long run, though only corrupt fixed deposit is statistically significant at the 5 per cent significance level. Bank total asset, total loan and advances and fraud have a significant effect on bank profitability at 1 and 10 per cent significance level. The findings also reveal that banks profit from corrupt fixed deposit and demand deposit in the short run. Social implications Text Originality/value The literature is awash with bank lending corruption and various institutional factors such as competition among banks, credit bureau and information sharing about borrowers, bank supervisory policies, loan loss provisioning, bank ownership structure and regulatory environment and anti-corruption measures. The aspect of deposit mobilisation and corruption has not been well researched in literature; this study, therefore, fills the gap in the literature by examining the extent deposit money banks contributed to corruption in Nigeria through their cutthroat deposit mobilisation drive.
- A study of receiving money by issuing defective deposit receipts
Purpose This paper aims to convict the offender of real concurrence offenses of the most severe offense and applying the most severe penalty will result in no distinction between the perpetrator who conducted more than one act and the one who conducted only one act. This approach deviates from the purpose of criminal law. The real concurrence of offenses means several offenses, the perpetrator’s dangerousness and culpability are much higher than the perpetrator who commits just one crime, so combined punishments for several offenses should be applied to the real concurrence of offenses. Design/methodology/approach If the depositors are acquaintances or relatives and friends, the relationship can be explained by “personality trust.” If the depositors are strangers, but they have complied with their duties of care, the deposit relationship can be explained by “system trust.” Findings The real concurrence of offenses means several offenses, the perpetrator’s dangerousness and culpability are much higher than the perpetrator who commits just one crime, so combined punishments for several offenses should be applied to the real concurrence of offenses. Originality/value The principle of choosing the most severe punishment applied to the real concurrence of offense should be abolished. As the perpetrator separately conducts two acts at different times, these acts infringe on different legal interests. Although these acts exist closely, the authors cannot deny that these acts constitute more than one offense.
- Supervisory mandate of central banks and the spate of bank failures: who is to blame?
Purpose This paper aims to examine how central Banks (in the narrow purview of Bank of Uganda) exercise their supervisory mandate to foster an efficient sound business environment for banks to operate efficiently. The authors were motivated to write on the subject of bank supervision because of the closure of Crane Bank and putting it under administration in 2016. The closure of this bank generated a lot of controversies on both sides of the political divide and in the press. Initially, the popular view was that Crane bank was poorly supervised, and as a result, it was exploited by insiders to commit money laundering, fraud, insider dealing, just to mention but a few. This put Bank of Uganda (the Central Bank) in a negative spotlight for failure to provide the required oversight of this bank. In Uganda, the supervision of banks and other financial institutions is the responsibility of Bank of Uganda. Design/methodology/approach The authors adopted a qualitative research approach using secondary data sources, including books, journal papers and websites, and evaluating primary legislation but also empirical evidence both in Uganda and other jurisdictions. The secondary data was evaluated to draw comparative analyses of causes of banks failures in countries both in Africa, Europe, USA and others jurisdictions across the globe. Findings It would be onerous to charge central banks with the responsibility of preventing bank failures, even though they would are required to institute measures to prevent banks from collapsing and its ripple effects on the economy. Effective banking supervision is a core factor for the success of every bank, but it cannot single-handedly prevent a bank from collapsing. A well-supervised bank can also fail not necessarily because of inherent weaknesses within its banking supervision, but it could fail because of extraneous factors beyond the control of individual banks. For example, Lehman Brothers Ltd (a highly leveraged of broker dealers) collapsed due to factors beyond its control, the Northern Rock and Royal Bank of Scotland in the UK were nationalised by the British Government. Research limitations/implications The limitation of the paper was that data on central banks and failed banks both in Uganda and other jurisdictions (the scope of the paper) was overwhelming, and it was daunting to sift through and analyse it in depth. Practical implications Banks play a fundamental role in the social-economic development of countries, and how they are regulated is significantly important for the stability of economies. They provide loans, guarantees and other financial products to businesses, and they are engines for economic growth and development. Social implications Banks affect, people, societies, businesses, markets and governments. Therefore, this paper has wider implications for the foregoing constituencies. Originality/value The originality of the paper is that this paper is unique, draws experiences across jurisdictions and evaluates in the narrow purview of banking regulation in Uganda.
- Challenges in customer due diligence for banks in the UAE
Purpose The purpose of this paper is to unpack the customer due diligence (CDD) vulnerabilities and to examine and analyze the UAE specific dynamics that make the country exposed to these threats. This research also intends to put on the table suitable solutions and remedial action steps that the UAE government, regulators and financial institutions (FIs) can adopt. Design/methodology/approach This study is qualitative in nature. Findings Despite the impressive regulatory framework and the satisfactory practices by FIs, there still remains some UAE specific challenges that make it difficult to undertake CDD for certain customers. The challenges that were identified include difficulties in Arabic names, complications in identifying the beneficial owners, impediments in establishing the source of wealth/funds, concerns with politically exposed persons, the increasing cost of compliance that resulted in a pattern of de-risking within FIs. Research limitations/implications The international bodies whose mandate is to formulate the necessary anti-money laundering and combating the financing of terrorism policies and regulations for global implementation together with Association of Certified Anti-Money Laundering Specialists (ACAMS) have published sufficient studies on CDD-related issues in the UAE. Yet on the other hand, very limited literature was found by independent scholars. This paper will, therefore, largely reference publications by Financial Action Task Force, the International Narcotics Control Strategy Report and ACAMS. It will also include works by respected law firms that have operations in the UAE, local publications, government documents, academic papers by the International Monetary Fund and the World Bank, legal journals and others. Originality/value Illicit actors exploit the UAE’s relatively open business environment, a multitude of global banks and exchange houses and global transportation links to undertake illicit financial activity […] the UAE does not have any major anti-money laundering (AML) deficiencies. However, the monitoring of FIs for AML purposes, particularly in the area of CDD, could be improved. This paper unpacks the CDD vulnerabilities and analyzes the UAE specific dynamics that make the country exposed to these threats. This research also puts on the table suitable remedial action steps that the UAE government, regulators and FIs can adopt.
- Challenges of accountability and development in Nigeria. An auto-regressive distributed lag approach
Purpose The purpose of this paper is to examine the challenges of accountability and development in Nigeria. In the literature, corruption is seen as an indicator of a lack of political accountability in most countries of the world, especially in less developed countries such as Nigeria. The Nigerian Government has taken several actions to address the problems of bad governance and corruption that have impeded economic development, but unfortunately these measures have not yielded the desired results. Design/methodology/approach Thus, this study examined accountability and developmental issues in Nigeria using secondary data and then made use of the auto-regressive distributed lag econometric technique to analyze the data. Findings The results from the study found that a rise in total government expenditure poses a danger of reducing Nigeria’s economic development in the long run and that control of corruption and political (the institutional variables) has a direct and significant effect on Nigeria’s economic development. Originality/value Therefore, upon these findings, this paper recommended that for Nigeria to experience development, corruption should be eliminated, and the Nigerian Government should spend on viable projects and economic activities that will be beneficial to the populace and the society at large and hence bring about economic development. Accountability is the hallmark of a prudent government that ensures efficient management of resources and transparency in the utilization of funds by the government. The absence of accountability mechanism allows corruption to thrive, which hinders the developmental process.
- Islamic financial institutions: conduits for money laundering?
Purpose The purpose of this paper is to discuss various situations in the Islamic financial services industry that are asserted to facilitate money laundering and the counter-arguments to the assertions. Design/methodology/approach The approach adopted by this paper is a review of literature and of several practices of Islamic financial institutions in a number of countries. Findings There is no evidence to support the contentions that Islamic financial institutions facilitate money laundering. Further, Islamic financial institutions are not any more susceptible to money laundering than conventional financial institutions are. Originality/value This paper demonstrates that Islamic financial institutions are not conduits for money laundering.
- Following the cyber money trail. Global challenges when investigating ransomware attacks and how regulation can help
Purpose The purpose of this paper is to show how global regulation of cryptocurrencies and other cybercurrencies can assist in addressing the challenges of attribution when investigating ransomware attacks and other types of cybercrime using these payment methods. Design/methodology/approa...
- Internal audit function and AML compliance: the globalisation of the internal audit function
Purpose This paper aims to consider the role of internal audit function (IAF) in relation to anti-money laundering (AML) compliance and oversight within global banking. The increasing globalisation of banking functions and the mirrored globalisation of financial crime require a renewed look at ...
- Confronting the problem of cross-border tax evasion in an era of greater global transparency of tax relevant information. The case of Nigeria
Purpose This paper aims to examine the Nigeria’s approach for tackling tax evasion, the limitations of double tax conventions for that purpose, the benefits of multilateral instruments/standards for automatic exchange of tax information and Nigeria’s ability to participate in such arrangements....
- The terrorist resourcing model applied to Canada
Purpose This paper aims to examine whether the money laundering/terrorist financing (ML/TF) model excludes important aspects of terrorist resourcing and whether the terrorist resourcing model (TRM) provides a more comprehensive framework for analysis. Design/methodology/approach Resea...
- Lift-off for Mexico? Crime and finance in money laundering governance structures
Purpose - The purpose of this article is to analyse Mexico’s money laundering governance with a focus on its 2007-2013 reform process. It provides a view of money laundering governance as a politically contested policy area and a reflection on the reach and purpose of the...
- Anti money laundering using a two-phase system
Purpose - This paper aims to compete and detect suspicious transactions that can lead to detecting money laundering cases. Design/methodology/approach - This paper presents a plan-based framework for anti-money laundering systems (PBAMLS). ...
- The civil law: a potent crime-fighting device
Purpose – The purpose of this paper is to increase the awareness of attorneys-at-law about the potential risks that they may encounter as a result of the developments in “intermeddler liability”. The article is also aimed at informing attorneys about the Proceeds of Crime Act (POCA) civil recovery...
- Anti-money laundering and moral intensity in suspicious activity reporting. An application of Jones’ issue contingent model
Purpose This paper aims to examine the influence Jones’ Moral Intensity Model (1991) has on the decision-making process of anti-money laundering (AML) compliance officers charged with reporting suspicious money laundering transactions in Jersey. Design/methodology/approach Ten...
- Money laundering and terrorism financing in virtual environments: a feasibility study
Purpose – There is a clear consensus of opinion that virtual environments and virtual currencies pose a money laundering and terrorism financing threat. What is less clear, however, is the level of risk that they pose. This paper aims to clarify the suitability of virtual environments for...
- Regulating the Chinese credit rating agencies: progress and challenges
Purpose - The purpose of this paper is to examine the emerging Chinese credit rating agencies (CRAs), and their development, regulatory regime and challenges. The Chinese financial system has made many improvements; in particular, the regulatory regime has reached a more...