Comprehensive cross-border declaration system as money-laundering prevention mechanism

Author:Salwa Zolkaflil, Normah Omar, Sharifah Nazatul Faiza Syed Mustapha Nazri
Position:Universiti Teknologi MARA, Shah Alam, Malaysia
Pages:292-300
SUMMARY

Purpose This study aims to discuss the Financial Action Task Force (FATF) Special Recommendation IX (SR IX) and the importance of complying with the recommendation, which focuses on cross-border declaration or disclosure with the objective to detect and prevent illicit cross-border transportation of cash and bearer negotiable instruments (BNIs). This study also looks into compliance... (see full summary)

 
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Comprehensive cross-border
declaration system as money-
laundering prevention mechanism
Salwa Zolkail
Universiti Teknologi MARA, Shah Alam, Malaysia
Normah Omar
Accounting Research Institute, Universiti Teknologi MARA, Shah Alam,
Malaysia, and
Sharifah Nazatul Faiza Syed Mustapha Nazri
Universiti Teknologi MARA, Shah Alam, Malaysia
Abstract
Purpose This study aims to discuss the Financial Action Task Force (FATF) Special Recommendation IX
(SR IX) and the importance of complying with the recommendation, which focuses on cross-border declaration
or disclosure with the objective to detect and prevent illicit cross-border transportation of cash and bearer
negotiable instruments (BNIs). This study also looks into compliance ratings of Asia Pacic Group (APG) 40
countries on the FATF SR IX.
Design/methodology/approach This study reviews the mutual evaluation reports issued by APG on
money laundering from 2006 to 2012. Based on the mutual evaluation reports, this study also looks into
recommendations and comments given by respective panels. The compliance ratings together with panel’s
recommendations and comments compiled in this study will be helpful to relevant authorities for future
improvement.
Findings Complying to FATF SR IX helps relevant authorities in detecting and preventing illicit from
cross-border transportation of cash and BNIs. Out of 40, only two countries received compliant rating, which
shows the need of improvement to ensure that the country is compliant on FATF SR IX.
Research limitations/implications This study is limited to the panel’s reviews and
recommendations on mutual evaluation report and only focuses on FATF SR IX.
Originality/value This paper analyzes the compliance characteristics of countries based on their FATF
mutual evaluation report. It highlights the comments and recommendation for future improvement to ensure
that these countries will comply with FATF SR IX.
Keywords APG mutual evaluation report, Cross-border declaration and disclosure,
FATF recommendation
Paper type Conceptual paper
1. Introduction
Borderless trading activities and the increased concerns about various predicate offences,
such as drug trafcking, tax evasion and transnational fraud, have led to an increased focus
on money laundering and its regulation. Money laundering has occupied the minds of
regulators and law enforcement agencies for many centuries, as it continues to pose a
The authors would like to express their gratitude to the Accounting Research Institute (ARI), Ministry
of Education, Malaysia and the Faculty of Accountancy, Universiti Teknologi MARA for funding and
facilitating this research project.
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
JMLC
20,3
292
Journalof Money Laundering
Control
Vol.20 No. 3, 2017
pp.292-300
©Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-02-2016-0008

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