Anti-money laundering/trade-based money laundering risk assessment strategies – action or re-action focused?
| Date | 07 October 2019 |
| DOI | https://doi.org/10.1108/JMLC-01-2016-0006 |
| Pages | 721-733 |
| Published date | 07 October 2019 |
| Author | Mohammed Ahmad Naheem |
Anti-money laundering/trade-
based money laundering risk
assessment strategies –action or
re-action focused?
Mohammed Ahmad Naheem
Mayfair Compliance, Frankfurt, Germany
Abstract
Purpose –This paper aims to discuss whether most anti-money laundering (AML) risk assessment
strategies within the banking and financialservices sector are reactionary focused and/or whether itshould
be possibleto predict where increased costs and resources needto be targeted in future AML risk processes.
Design/methodology/approach –The paper reviewed research findings from the researchers own
study on trade-based money laundering(TBML) and also survey results from the KPMG Global Anti-Money
LaunderingSurvey (2014), along with academic discussionpapers.
Findings –The paper concluded that risk assessmentstrategies were still largely responsive, and this left
banks exposed to two factors –not recognising risk that they were not assessing for and, second, being
challengedlegally as new cases emerged in the court systems from victims of ML and terrorism crimes.
Practical implications –The practical implications affect the resources and costs assigned to risk
assessment strategies and called for a more holistic approach that was forward thinking from the bank’s
perspectiverather than reactionary focused and working from the regulators’s agenda.
Social implications –Any improvements in detection of AML and counter-terrorism financing has
broadersocial outcomes.
Originality/value –The originality is the subjectmatter of AML risk assessment strategies and the input
from TBML/AML experts from across the globe that contributed to the author’s research survey and
interviews. These resultshave been analysed along with other research and the current academic discussion
on this topic.
Keywords Regulation, Compliance, Banking, Risk assessment,
Trade-based money laundering, Anti-money laundering, AML risk assessment strategies, TBML
Paper type Viewpoint
The author acknowledges being the recipient of a research grant awarded by Princess Ālae as part of
Seven Foundation’s“2020 Banking Vision –building banks of the future”, and he thanks her for the
continued support and motivation both to himself and other students who benefit through her
generosity. The author also thanks Professor Muhammad Jum’ah (a leading economist of this era
based in Damascus), who has continued to provide valuable input both through his teaching of the
science of economics and for his continued guidance.
Please note that this paper was composed and submitted for review to this journal in January
2016 –all the content was current at that point in time. The banking, compliance and regulation
industries alongside governmental policy making have evolved greatly since January 2016, with new
material from academic research emerging. These points need to be taken into consideration when
reading this paper.
The author is a specialist researcher and practitioner in the fields of Trade-Based Money
Laundering and Crypto Currencies contracted to Mayfair Compliance (www.mayfaircompliance.
com).
Risk
assessment
strategies
721
Journalof Money Laundering
Control
Vol.22 No. 4, 2019
pp. 721-733
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-01-2016-0006
The current issue and full text archive of this journal is available on Emerald Insight at:
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