Money laundering detection
system (MLD) (a complementary
system of Rastin banking)
Research Department, Bank Melli Iran, Tehran, Iran
Purpose –This paper aims to deﬁnea new system for detecting money-launderingactivities by comparing
tax payments(especially value-added tax) data to banking transactions data.
Design/methodology/approach –A money laundering detection(MLD) system provides the necessary
bases for detecting deception and fraud. Though MLD is a complementary system of the Rastin Banking
system, itcan also be installed and executed separately.
Findings –The underground economic activities can be detected and traced by comparing banking
information and transaction information in MLD system. It needs to force the direct transactors or other
related forms of transaction to perform theirmoney operations through the banks. In the next step, the tax
information of transactors(in a chain of transactions) can be compared with them, and the incompatibilityof
the two setsof data will explore money-launderingoperations.
Research limitations/implications –This system is novel and needs to be more elaborateto remove
furtherpractical problems and speciﬁc cases.
Practical implications –MLD system provides necessary protection for those who perform legal
economicactivities by detecting ﬁnancial criminals.
Social implications –Money laundering harms individual and public rights as well as economies.
Financial crimes, tax evasion,smuggling, conspiracy, embezzlement and various other offencesare included
in the general deﬁnition of money laundering, so detecting them will lead to important economic
improvementsin the society as well as international community.
Originality/value –MLD system provides structural and electronicbases for computerized tax data and
Keywords Money laundering, Value added tax, Rastin banking, Transaction, Banking information,
Paper type Research paper
As societies have developed, so also have law-evasion techniques. Therefore, to help
necessitate the public to obey the law, new updated technological procedures should be
applied and be extended to the sovereignty of law. The Rastin Banking system was
designed based on the Sharia laws to eliminate riba and to institutionalize justice, fairness
and Islamic ethics into banking and ﬁnancialactivities. The virtues of Rastin Banking are so
extended in the ﬁelds of banking, ﬁnancial, economic, ethical, social and international
activities that it canbe used as a base for improving economic structure of the country.
Value-added tax (VAT) system can be used for money laundering detection (MLD)
effectively. If fully conducted, VAT can almost cover and superviseall signiﬁcant ﬁnancial
transactions in the economy and prevent tax evasion.VAT is an auto-detective tax system
and regards “tax-payers”as being “tax-information-collectors”as well, regarding the fact
that tax-payers are boundto submit received purchase-invoices (from the sellers involved)to
Journalof Money Laundering
Vol.20 No. 4, 2017
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