Journal of Money Laundering Control最新文献

{"title":"Changes in credit score, transaction volume, customer characteristics, and the probability of detecting suspicious transactions","authors":"Endre J Reite, A. Oust, Rebecca Margareta Bang, Stine Maurstad","doi":"10.1108/jmlc-06-2022-0087","DOIUrl":"https://doi.org/10.1108/jmlc-06-2022-0087","url":null,"abstract":"\u0000Purpose\u0000This study aims to use a unique customer-information data set from a Norwegian bank to identify how small changes in firm-specific factors correlate with the risk of a client subsequently being involved in suspicious transactions. It provides insight into the importance of updating client risk based on changes in transaction volume and credit risk to enable effective resource use in transaction monitoring.\u0000\u0000\u0000Design/methodology/approach\u0000Changes in a firm’s bank use and accounting data were tested against subsequent flagged and reported customers to identify which changes led to a significant increase in the probability of engaging in a transaction identified as suspicious. Prioritizing resources to firms that remain suspicious after further controls can improve the risk-based approach and prioritize detection efforts. The main factors were customer probability of default (credit score), size and changes in customer characteristics. The cross-sectional data set contained administrative data on 8,538 corporate customers (219 with suspicious transactions that were subsequently flagged, 64 of which were reported). A binomial logit model was used.\u0000\u0000\u0000Findings\u0000Changes in transaction volume and bank use are significant in predicting subsequent suspicious transactions. Customer credit score changes were significantly positively correlated with the likelihood of flagging and reporting. Change is a stronger indicator of suspicious transactions than the level. Thus, frequent updating of client risk and using a scale rather than risk categories can improve client risk monitoring. The results also showed that the current anti-money laundering (AML) system is size-dependent; the greater the change in customer size, the greater the probability of the firm subsequently engaging in a suspicious transaction.\u0000\u0000\u0000Research limitations/implications\u0000Client risk classification, monitoring changes in a client’s use of the bank and business risk should receive more attention.\u0000\u0000\u0000Practical implications\u0000The authors demonstrate that client risk classifications should be dynamic and sensitive to even small changes, including monitoring the client’s credit risk changes.\u0000\u0000\u0000Social implications\u0000Directing AML efforts to clients with characteristics indicating risk and monitoring changes in factors contributing to risk can increase efficiency in detecting money laundering.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study to focus on changes in a firm's use of a bank and link this to the probability of detecting a suspicious transaction.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87020675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Editorial: The use of artificial intelligence in fighting financial crime, for better or worse?","authors":"C. Stears, Joshua Deeks","doi":"10.1108/jmlc-05-2023-174","DOIUrl":"https://doi.org/10.1108/jmlc-05-2023-174","url":null,"abstract":"","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84927483","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Historical aspects of customer due diligence and related anti-money laundering measures in South Africa","authors":"Howard Chitimira, Sharon Munedzi","doi":"10.1108/jmlc-01-2023-0016","DOIUrl":"https://doi.org/10.1108/jmlc-01-2023-0016","url":null,"abstract":"\u0000Purpose\u0000This paper explores the historical aspects of customer due diligence and related anti-money laundering measures in South Africa. Customer due diligence measures are usually employed to ensure that financial institutions know their customers well by assessing them against the possible risks they might pose such as fraud, money laundering, Ponzi schemes and terrorist financing. Accordingly, customer due diligence measures enable banks and other financial institutions to assess their customers before they conclude any transactions with them. Customer due diligence measures that are utilised in South Africa include identification and verification of customer identity, keeping records of transactions concluded between customers and financial institutions, ongoing monitoring of customer account activities, reporting unusual and suspicious transactions and risk assessment programmes. The Financial Intelligence Centre Act 38 of 2001 (FICA) as amended by the Financial Intelligence Centre Amendment Act 1 of 2017 (Amendment Act) is the primary statute that provides for the adoption and use of customer due diligence measures to detect and combat money laundering in South Africa. Prior to the enactment of the FICA, several other statutes were enacted in a bid to prohibit money laundering in South Africa. Against this background, the article provides a historical overview analysis of these statutes to, inter alia, explore their adequacy and examine whether they consistently complied with the Financial Action Task Force Recommendations on the regulation of money laundering.\u0000\u0000\u0000Design/methodology/approach\u0000The paper provides an overview analysis of the historical aspects of the regulation and use of customer due diligence to combat money laundering in South Africa. In this regard, a qualitative research method as well as the doctrinal research method are used.\u0000\u0000\u0000Findings\u0000It is hoped that policymakers and other relevant persons will adopt the recommendations provided in the paper to enhance the curbing of money laundering in South Africa.\u0000\u0000\u0000Research limitations/implications\u0000The paper does not provide empirical research.\u0000\u0000\u0000Practical implications\u0000The paper is useful to all policymakers, lawyers, law students and regulatory bodies, especially, in South Africa.\u0000\u0000\u0000Social implications\u0000The paper advocates for the use of customer due diligence measures to curb money laundering in the South African financial markets and financial institutions.\u0000\u0000\u0000Originality/value\u0000The paper is original research on the South African anti-money laundering regime and the use of customer due diligence measures to curb money laundering in South Africa.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82090803","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Is Bangladesh’s policy response to the growing e-commerce sector compatible with its commitment to fight predicate offences for money laundering?","authors":"M. Z. Haq","doi":"10.1108/jmlc-01-2023-0023","DOIUrl":"https://doi.org/10.1108/jmlc-01-2023-0023","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate Bangladesh’s e-commerce regulations in light of the growing criticism that they are insufficient to curb predicate crimes like fraud and money laundering in the online marketplace.\u0000\u0000\u0000Design/methodology/approach\u0000This study used the exploratory design to examine the latest ministerial directives and laws governing e-commerce in Bangladesh to determine why they cannot prevent fraudulent activities in this promising sector and identify potential solutions.\u0000\u0000\u0000Findings\u0000Bangladesh’s regulatory responses to e-commerce fraud prevention and detection are reactive and inadequate. Regulators are unwilling and unable to enforce available legal provisions for various reasons, including a lack of knowledge and coordination among the agencies.\u0000\u0000\u0000Research limitations/implications\u0000This paper focuses solely on the legal and regulatory framework in place to combat e-commerce fraud. Other critical issues, such as consumer rights, privacy and data protection in e-commerce, are not addressed.\u0000\u0000\u0000Practical implications\u0000The findings of this study will assist policymakers in revising current regulatory approaches to e-commerce to protect this sector from criminal abuse.\u0000\u0000\u0000Originality/value\u0000This study looked into the possibility of using a proactive risk-based approach in the e-commerce sector, similar to what the Bangladesh Financial Intelligence Unit does in the financial sector.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73849705","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The role of virtue ethics in enhancing reputation through combatting financial crimes","authors":"","doi":"10.1108/jmlc-02-2023-0033","DOIUrl":"https://doi.org/10.1108/jmlc-02-2023-0033","url":null,"abstract":"\u0000Purpose\u0000This paper aims to outline how certain lessons from ethical systems can be relevant and applicable to tackling unethical behavior, including financial crime, within the finance profession.\u0000\u0000\u0000Design/methodology/approach\u0000This paper adopts a pragmatic perspective while acknowledging that there is a myriad of reasons managers act unethically, including the reality that many do so knowingly and deliberately. The matter is further complicated by human nature, given an individual’s behavior (ethical or unethical) is not easily discernable from their psychological, sociological, theological or cultural attributes.\u0000\u0000\u0000Findings\u0000Although such systems may not solve the problem of corrupt behavior, research suggests that industry professionals can learn to act in a more responsible and ethical manner. Given the wounded reputation of the financial sector, owing to their role in committing financial crimes such as money laundering, advances in ethical conduct would elevate both the effectiveness of the sector, as well as its reputation.\u0000\u0000\u0000Originality/value\u0000It is impractical to think we can completely resolve the problem of unethical behavior. Improvement, however, seems possible through promoting virtuous character traits and ethical behavior in individuals and organizations. Virtue ethics can play a significant role in combating financial crime and supporting anti-money laundering initiatives.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89392340","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Combatting money laundering in Saudi Arabia","authors":"","doi":"10.1108/jmlc-02-2023-0046","DOIUrl":"https://doi.org/10.1108/jmlc-02-2023-0046","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to examine the effectiveness of the antimoney laundering measures in the Kingdom of Saudi Arabia in response to its commitments to the Financial Action Task Force and treaties in combatting money laundering.\u0000\u0000\u0000Design/methodology/approach\u0000To explore the effectiveness of the Saudi antimoney laundering measures, this research’s data have been obtained by a qualitative approach that uses a combination of primary and secondary resources. It relies on analyzing Anti-Money Laundering Law (AML) and the process of money laundering detection in Saudi Arabia in relation to three cases from Saudi courts supported by journal articles, academic books and reliable websites.\u0000\u0000\u0000Findings\u0000This study concludes that the Saudi AML has been efficient and effective in the battle against money laundering. This study finds that there is close coordination and collaboration between financial institutions, banks and governmental agencies in Saudi Arabia to combat this phenomenon. This study also concludes that the AML is compatible with other criminal laws such as the Anti-Bribery Law, the Anti Trafficking in Person Law and the Anti-Drug Trafficking Law.\u0000\u0000\u0000Research limitations/implications\u0000This paper relies mainly on publicly available information regarding the detection of money laundering schemes and the confiscation of proceeds of crime in the Kingdom of Saudi Arabia as a main source of information. There data available on the money laundering cases in the Saudi prosecution and criminal courts were limited due to the lack of public disclosure of such cases because of their sensitivity. This was made up for by using reliable sources in which some cases were reported.\u0000\u0000\u0000Originality/value\u0000This paper underlines the efficient aspects of the current AML that contribute to reduction of money laundering in Saudi Arabia. This paper emphasizes on the importance of the structure of collaboration between regulatory, financial and law officers to implement the rule of law and achieve justice.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91158077","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The sustainability of the international AML regime and the role of the FATF. The objectivity of the greylisting process of developing jurisdictions like Pakistan","authors":"Nasir Sultan, Norazida Mohamed, Jamaliah Said, Azroz Mohd","doi":"10.1108/jmlc-12-2022-0166","DOIUrl":"https://doi.org/10.1108/jmlc-12-2022-0166","url":null,"abstract":"\u0000Purpose\u0000This study aims to explore the perception of the compliance officers of the Pakistani financial sector towards the placement of Pakistan on the grey list by the Financial Action Task Force (FATF).\u0000\u0000\u0000Design/methodology/approach\u0000To achieve this objective, the study adopted a qualitative methodology and conducted semi-structured interviews with different financial institutes and their regulators.\u0000\u0000\u0000Findings\u0000The study found that role of the FATF is lopsided and politically motivated towards Pakistan. Although Pakistan has loopholes like many other countries, its treatment in the FATF is irregular. Therefore, the decision of the greylisting is not purely based on technical compliance, but political preferences are the determinative aspect.\u0000\u0000\u0000Originality/value\u0000This study provides a holistic overview of the FATF greylisting mechanism and how Pakistan is treated. This might provide both the FATF and Pakistan to revisit their policies.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83132929","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Preempting fraud: a financial distress prediction perspective on combating financial crime","authors":"Khaled Halteh, M. Tiwari","doi":"10.1108/jmlc-01-2023-0013","DOIUrl":"https://doi.org/10.1108/jmlc-01-2023-0013","url":null,"abstract":"\u0000Purpose\u0000The prevention of fraudulent activities, particularly within a financial context, is of paramount significance in all spheres, as it not only impacts the sustainability of corporate entities but also has the potential to have a broader economy-wide impact. This paper aims to focus on dual implications associated with financial distress, the first being associated with the temptation to launder funds due to financial distress, and the second being the potential for illicit activities, such as fraud, money laundering or terror financing, to give rise to financial distress.\u0000\u0000\u0000Design/methodology/approach\u0000The paper examines the literature on financial distress and uses theories of financial crime to establish a link between financial distress and financial crime.\u0000\u0000\u0000Findings\u0000In recent years, there has been a surge in corporate financial distress, particularly in the aftermath of concurrent crises such as the COVID-19 pandemic and the Russia–Ukraine war. Through a comprehensive examination of literature pertaining to financial distress and financial crime, this study identifies a proclivity towards fraudulent conduct arising from instances of financial distress. Moreover, the engagement in such illicit activities subsequently exacerbates the financial distress. An analysis of the relationship between financial crime and financial distress reveals the existence of a vicious cycle between the two.\u0000\u0000\u0000Originality/value\u0000The results of this study have the potential to advance understanding of the relationship between financial distress and financial crime, which has been previously underexplored.\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80905314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Relationships between foreign direct investment and official development assistance with trade-related illicit financial flows. Evidence from low- and middle-income countries","authors":"Bienvenido Ortega, Jesús Sanjuán","doi":"10.1108/jmlc-12-2022-0173","DOIUrl":"https://doi.org/10.1108/jmlc-12-2022-0173","url":null,"abstract":"\u0000Purpose\u0000This paper aims to analyse empirically the association between flows of foreign direct investment (FDI), net official development assistance (ODA) inflows and trade-related illicit financial outflows.\u0000\u0000\u0000Design/methodology/approach\u0000With this purpose, a linear model was estimated, using different panel-data estimators, and using a database for a sample of 49 countries spanning the period 2008–2017. The used measure of illicit financial outflows was based on the estimates by Global Financial Integrity of deliberate misinvoicing in merchandise trade.\u0000\u0000\u0000Findings\u0000Research findings show a significant and positive association between changes in both relative lagged net FDI flows and relative FDI outflows (as % of gross domestic product) and changes in the ratio of trade-related illicit capital outflows to total trade. However, these positive associations were only observed in the case of low-income countries. Also, the positive association of net ODA inflows on the IFFT outflows were restricted to the cluster of lower-middle-income countries.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is one of the first studies to empirically estimate the association between FDI and ODA flows and trade misinvoicing at a macroeconomic level. Research findings may contribute to substantiate the concerns expressed in previous research about the potential unintended effects of aid on illicit capital flight in the case of lower-middle-income countries. They also shown that FDI flows could be an additional conduit for trade-related illicit financial flows in these countries\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-03-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83609196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Investigating the determinants of money laundering risk","authors":"Yaseen Ghulam, Blandina Szalay","doi":"10.1108/jmlc-01-2023-0001","DOIUrl":"https://doi.org/10.1108/jmlc-01-2023-0001","url":null,"abstract":"\u0000Purpose\u0000With the growing interconnectedness of global markets brought about by globalization and technological innovation, there is a heightened worldwide risk of money laundering, posing a considerable negative impact on economies and social equality. Therefore, the primary purpose of this research is to examine factors that underpin the pervasiveness of money laundering risk.\u0000\u0000\u0000Design/methodology/approach\u0000By using a cross-section sample of 84 countries, the study uses ordered logit and multinomial logit regression to test and explain the role of main and varied determinants of money laundering risk covering countries’ economic, social, regulatory and corporate environment.\u0000\u0000\u0000Findings\u0000The authors conclude that, overall, the macroeconomic indicators are less relevant in influencing money laundering risk than the other factors adopted from the Basel report. Nonetheless, the volume of exports and the exchange rate were robust in both the ordered and multinomial regression analyses alongside financial secrecy, auditing standards and corporate transparency. While more financial secrecy and a higher volume of exports were found to increase this risk, the other variables showed a negative relationship. The authors further conclude that it is mostly less secrecy, more transparency and better auditing that could gradually transform a high-risk country into medium risk.\u0000\u0000\u0000Practical implications\u0000This study recommends the implementation of publicly accessible ownership registries to address the issues around secrecy, transparency and auditing misconducts. Additionally, the general strengthening of laws and policies in these three domains is also necessary alongside the application of current technologies, such as machine learning, for the detection of money laundering.\u0000\u0000\u0000Originality/value\u0000The authors believe this study uses advanced econometric techniques rarely used in the literature on money laundering. Separating the impact of economic and social/regulatory is also valuable\u0000","PeriodicalId":46042,"journal":{"name":"Journal of Money Laundering Control","volume":null,"pages":null},"PeriodicalIF":1.1,"publicationDate":"2023-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84239481","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}