An analytical study of the financial intelligence units' enforcement mechanisms
| DOI | https://doi.org/10.1108/13685201211266042 |
| Pages | 483-495 |
| Date | 05 October 2012 |
| Published date | 05 October 2012 |
| Author | Mohammad Al‐Rashdan |
| Subject Matter | Accounting & finance |
An analytical study of the
financial intelligence units’
enforcement mechanisms
Mohammad Al-Rashdan
Faculty of Law, Centre for Transnational Crime Prevention,
University of Wollongong, Wollongong, Australia
Abstract
Purpose – The purpose of this article is to analyse financial intelligence units’ (FIUs’) approaches in
enforcing compliance and how these units can ensure the application of the most effective enforcement
mechanism to secure the best outcome of such regulatory action.
Design/methodology/approach – Sources of information consisted of scholarly books, papers and
published articles through the web.
Findings – FIUs should not concentrate on adopting a purely cooperative style (in terms of soft
sanctions) or take the opposite approach and be a tough regulator (applying harsh sanctions on
non-compliant reporting entities). Rather, a more qualitative approach should be adopted, individually
tailoring the approach on the basis of an examination of the FIUs’ findings on entity non-compliance,
and how it can best operate its mechanism so as to ensure those entities comply effectively with their
AML/CTF obligations.
Originality/value – This article serves as a fruitful analysis to educate FIUs’ personnel, AML/CTF
professionals, and reporting entities in terms of achieving the highest level of compliance with
AML/CTF laws and regulation. Some studies have discussed FIU enforcement mechanisms generally
but, to the best of the author’s knowledge, the analytical study of different FIUs’ enforcement
mechanisms and how to achieve the most effective results to secure compliance is yet to be externally
or independently researched and evaluated.
Keywords Money laundering,FIU, Enforcement mechanism,Non-compliance, Law enforcement
Paper type Literature review
1. Introduction
When studying any country’s anti money laundering (AML) system, it needs to be
borne in mind that while money laundering (ML) cannot be entirely eradicated, efforts
can be made to regulate it. What countries should be calling for is the best possible
regulation, regulation that is able to enhance the compliance culture and reduce, even
minimise ML activities.
For instance, Levi (1997) discussed “regulatory compliance culture” and its
influences on the establishment of an effective AML regime. He argues that various
countries have different levels of willingness to control and regulate their systems.
Countries establish their regulatory systems to ensure the stability and the efficiency of
their economy. Alongside increased security and savings, a major role of regulatory
bodies is protecting the national financial system from illicit approaches and misuse.
However, the different approaches that countries adopt to regulate their systems differ
in their operations and reveal different priorities in combating ML crimes. Many
factors affect the way different countries respond in their efforts to combat such
crimes. In her article, Gilboy (1998) states that such factors must be tak en into account
The current issue and full text archive of this journal is available at
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FIUs’
enforcement
mechanisms
483
Journal of Money Laundering Control
Vol. 15 No. 4, 2012
pp. 483-495
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685201211266042
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