Does the broadly defined ambit of money laundering offences globally, a recipe for confusion than clarity?

Author:Norman Mugarura
Position:Research Department, Global Action Research and Development Initiative Limited, London, UK
Pages:432-446
SUMMARY

Purpose The purpose of this paper is to articulate that ill-defined global prohibition regimes such as anti-money laundering (AML) could potentially cause more harm than good. The author has carried out a scoping review of some anti-money laundering regimes such as the USA PATRIOT Act to demonstrate how they have been harnessed in some jurisdictions. It deconstructs the broad scope in which money laundering offences are conceptualized and applied by different jurisdictions and its inherent challenges. It has scoped a wide range of issues, often articulating the inherent controversies in some engendered AML regimes such as the USA PATRIOT Act (2001) and its revised Know Your Customer (KYC) model. Design/methodology/approach This paper was undertaken by straddling a wide range of issues in... (see full summary)

 
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Does the broadly dened ambit
of money laundering offences
globally a recipe for confusion
than clarity?
Norman Mugarura
Research Department,
Global Action Research and Development Initiative Limited, London, UK
Abstract
Purpose – This paper aims to articulate that ill-dened global prohibition regimes such as anti-money
laundering regimes could potentially cause more harm than good. The author has carried out a scoping
review of some anti-money laundering (AML) regimes such as the PATRIOT Act to demonstrate how
they have been harnessed in some jurisdictions. It deconstructed the broad scope in which money
laundering offences are conceptualized and applied by different jurisdictions and its inherent
challenges. It has scoped a wide range of issues often articulating the inherent controversies in some of
engendered AML regimes such as the PATRIOT Act (2001) and its revised Know Your Customer (KYC)
model.
Design/methodology/approach – This paper was undertaken by straddling a wide range of issues
in relation to the shortcomings which are inherent in AML regulatory regimes and their application in
practice. However, the author focused the analysis on the failures of some AML regimes focusing
largely on the UK and US jurisdictions and occasionally also drawing examples from African countries.
The author utilized examples from a small sample of countries and then hypothesized that if a
regulatory regime is broadly dened, it could cause confusion in its application, let alone being
counter-productive to the purpose it was adopted to achieve. It might therefore not be very helpful in
streamlining how desired norms should be harnessed in practice.
Findings – The ndings of the paper have correlated that broadly and ill-dened regulatory regimes
are bound to cause confusion and controversies, let alone being counter-productive to the purpose they
were adopted to achieve. The PATRIOT Act and KYC are some of the few examples where ill-denition
of regulatory regimes have provided a recipe for controversies and tensions between regulatory
domains and citizens. For instance, the surveillance mandate to US regulatory authorities under the
PATRIOT Act (2001) has generated tensions between citizens and banks. Cases have been led against
banks for over exercising their powers and interference with individual freedoms of US citizens.
Research limitations/implications The paper was written largely based on analysis of
secondary data on AML regimes and the controversies their application often generates in some
countries. For instance, the PATRIOT Act (200) has generated tensions between the USA and foreign
States and banks and citizens, because of excessive use of its surveillance mandate on privacy of
individuals. Bearing this challenge in mind, it would have been better to focus the analysis on many
countries and probably also interview bankers and internalize their views accordingly.
Practical implications – The paper is informative and could be utilized for making desired policy
changes and enhancing research on global regulatory regimes and how they are evolved and applied in
practice. It has practical relevance for banks, researchers, students, policy/oversight institutions and
governments and is, therefore, a worth read.
Social implications Regulation of money laundering crimes is imperative, because if left
unchecked, it can undermine economies, governments and people and erode the fabric of society.
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
JMLC
19,4
432
Journalof Money Laundering
Control
Vol.19 No. 4, 2016
pp.432-446
©Emerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-06-2015-0024

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