Journal of Money Laundering Control

Publisher:: Emerald Group Publishing Limited
Publication date:: 2011-12-21

ISBN:: 1368-5201

Issue Number

Latest documents

Editorial: The use of artificial intelligence in fighting financial crime, for better or worse?
Historical aspects of customer due diligence and related anti-money laundering measures in South Africa
Purpose: This 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. Design/methodology/approach: The 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. Findings: It 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. Research limitations/implications: The paper does not provide empirical research. Practical implications: The paper is useful to all policymakers, lawyers, law students and regulatory bodies, especially, in South Africa. Social implications: The paper advocates for the use of customer due diligence measures to curb money laundering in the South African financial markets and financial institutions. Originality/value: The 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.
An evaluation of customer due diligence and related anti-money laundering measures in the United Kingdom
Purpose: Customer due diligence measures that are employed in the United Kingdom (UK) to detect and combat money laundering are discussed. The UK adopted a progressive regulatory and enforcement framework to combat money laundering which relies, inter alia, on the use of customer due diligence measures to regulate and curb the occurrence of money laundering activities in its financial institutions and financial markets. However, other regulatory measures that could have contributed to the effective combating money laundering in the UK will not be explored in detail since the article is focused on the reliance and use of customer due diligence measures to curb money laundering activities. Accordingly, the strength, flaws and weaknesses of the UK anti-money laundering regulatory and enforcement framework are examined. Lastly, possible recommendations to address such flaws and weaknesses are provided. Design/methodology/approach: The paper discusses customer due diligence measures that are used in the UK to detect and combat money laundering. Findings: It is hoped that policymakers and other relevant persons will use the recommendations provided in the paper to enhance the curbing of money laundering in the UK. Research limitations/implications: The paper does not provide empirical research. Practical implications: The study is useful to all policymakers, lawyers, law students and regulatory bodies in the UK. Social implications: The study seeks to curb money laundering in the UK society globally. Originality/value: The study is original research on the use of customer due diligence measures to detect and combat money laundering in the UK.
Editorial: Towards meaningful action against proliferation financing
The adequacy of the legal framework for combating money laundering and terrorist financing in Nigeria
Purpose: Banditry and terrorism constitute serious security risks in Nigeria. This follows the fact that Nigeria is rated as one of the leading states in the world that is plagued by terrorism. Terrorists and bandits usually embark on predicate crimes such as kidnapping, smuggling, narcotics trade, and similar trades to finance their terrorist enterprises in Nigeria. The funds realized by criminals from nefarious sources such as sales of narcotics and ransom from kidnapping are usually laundered to make their criminal enterprises self-sustaining. Thus, all “dirty” money is laundered so as not to attract the attention of law enforcement agents. The funds realized through receipt of ransom from kidnapping, smuggling or funds from sponsors are laundered through channels such as bureau de change, which are difficult to monitor by the Nigerian authorities due, in part, to flaws and loopholes in the current anti-money laundering and anti-terrorist laws. This paper aims to adopt a doctrinal and qualitative desktop research methodology. In this regard, the current anti-money laundering and anti-terrorist laws are discussed to explore possible measures that could be adopted to remedy the flaws and loopholes in such laws and combat money laundering and financing of terrorism in Nigeria. Design/methodology/approach: The article analyses the regulation and combating of money laundering and terrorist financing activities in Nigeria. In this regard, a doctrinal and qualitative research method is used to explore the flaws in the Nigerian anti-money laundering laws so as to recommend possible remedies in respect thereof. Findings: It is hoped that policymakers and other relevant persons will use the recommendations provided in this article to enhance the curbing of money laundering and terrorist financing activities in Nigeria. Research limitations/implications: The article is not based on empirical research. Practical implications: This study is important and vital to all policymakers, lawyers, law students and regulatory bodies in Nigeria and other countries globally. Social implications: The study seeks to curb money laundering and terrorist financing activities in Nigeria. Originality/value: The study is based on original research which is focused on the regulation and combating of money laundering and terrorist financing activities in Nigeria.
Editorial: The show must go on!
Money laundering in Australian casinos
Purpose: This study aims to examine the role of Australian casinos in facilitating money laundering and Chinese capital flight. Design/methodology/approach: The reports and transcripts of evidence from government inquiries into money laundering in Australian casinos are integrated with analyses of Asian transnational crime. Findings: Money laundering in Australian casinos is linked to transnational crime and Chinese capital flight. A central finding is that junket operators play a key role in facilitating money laundering. The casinos are particularly exposed to criminal influences in the Chinese very important person gambling market, since they have used junket operators and underground banks, many of whom are closely linked to major Chinese criminal groups from Hong Kong and Macau. Research limitations/implications: Very little information is available on money laundering in Australian casinos and this research has relied on the government inquiries that have been conducted over the past two years on the subject. Practical implications: The author’s focus on money laundering in Australian casinos in the context of Asia-Pacific transnational crime is important for Federal and state government regulators grappling with the rapidly changing money laundering issues. The government inquiries recognised that the money laundering was related to transnational crime, but did not have the time and resources to explore the topic. The paper provides state government casino regulators and financial crime regulators with a broader international perspective to anticipate future money laundering and crime pressures facing Australia’s casinos. Social implications: Money laundering in Australian casinos has had devastating social implications on the community. My research helps to focus attention on the problems of transnational crime and money laundering. Originality/value: Little research has examined the linkages between casinos and transnational crime. This study has found that Australian casinos were used to launder the proceeds of illegal drug trafficking and to facilitate Chinese capital flight. While casinos have been forced by damming government inquiries to tighten anti-money laundering controls, it is likely that there will be pressure to relax these controls in the future because of competitive pressure from other casinos in the Asia-Pacific region.
Implementing unexplained wealth orders in South Africa – what are the options?
Purpose: This paper aims to focus on the use of unexplained wealth orders (UWOs) in South Africa as a civil method to act upon lifestyle audit results that have indicated wealth from unknown, possibly unlawful, sources. Design/methodology/approach: This paper applied a comparative methodology. Legislation and the application of UWOs in Ireland, the UK and Australia were compared with the situation in South Africa. Findings: It is proposed that South Africa includes UWO legislation within its Prevention of Organised Crime Act or be established as a separate piece of legislation. Also, South Africa should follow both the civil and criminal route to target the proceeds of crime. Originality/value: Corruption in South Africa is rampant and, without the necessary legislation, impossible to fight. For these purposes, this paper proposes measures to be used from a civil forfeiture perspective.
Financial surveillance and the role of the Financial Intelligence Unit (FIU) in the Netherlands
Purpose: In 2019, FIU-the Netherlands celebrated its 25th anniversary. This study takes the occasion to reflect on the role of the FIU in financial surveillance and to describe its core practices of collecting, analysing and disseminating financial intelligence. Design/methodology/approach: Because FIU practices are often secret and its transaction data classified as state secrets, the FIU’s daily operational activities remain obscure. Drawing on interviews, public reports and an online training course, this study encircles secrecy and offers a fine-grained analysis of the FIU's core activities. Findings: The article finds that the FIU plays a pivotal role in financial surveillance because it can operate at various intersections. An FIU operates at the intersection of finance and security, in between the public and private sector and at the national and international domain. This pivotal role makes the FIU indispensable in the surveillance of payment systems and spending behavior. Social implications: The article poses that the desirability and effectiveness of financial surveillance has to date not received sufficient consideration, while it affects (the privacy of) anyone with a bank account. The article asks: is it ethically justifiable that transaction information is declared suspect, investigated, and shared nationally and internationally, without the individual or entity concerned officially being notified and legally named a suspect? Originality/value: This case-study is not only relevant for the study of finance/security, AML/CFT and financial surveillance, but also to policy makers and the broader public who merit an understanding of how their financial behaviour is being surveilled.
Editorial