Current developments in money laundering and terrorism financing
| DOI | https://doi.org/10.1108/JMLC-05-2019-0043 |
| Published date | 30 March 2020 |
| Date | 30 March 2020 |
| Pages | 337-348 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Fabian Maximilian Johannes Teichmann |
Current developments in money
laundering and terrorism
financing
Fabian Maximilian Johannes Teichmann
Teichmann International AG, St. Gallen, Switzerland
Abstract
Purpose –Whilst the existing literature focuses on developing prevention mechanisms for banks, this
paper aims to demonstrate the ongoingfeasibility of money laundering and financing terrorism undetected.
This study thereby revealsthat the current anti-money-laundering and anti-terrorism-financingmechanisms
can easilybe circumvented.
Design/methodology/approach –A three-stage research processwas used, including both qualitative
and quantitative methods.The empirical findings are based on a qualitative contentanalysis of 50 informal
interviewswith illegal financial services providers and 50 formal interviews with complianceexperts and law
enforcementofficers.
Findings –During these interviews,specific methods of financing terrorism and limiting the risks of being
prosecuted were discussed.Hence, specific methods of money laundering and terrorism financing have been
analyzed.
Research limitations/implications –The findings thus convey only the perspectives of the 100
interviewees,such that generalizability is limited.
Practical implications –The practicalimplications include suggestionsfor financial regulators,financial
institutions and compliance officers on how to more effectively combat money laundering and terrorism
financing.Although the empirical findingsare limited to Europe,the results could be appliedglobally.
Originality/value –This paper reveals new insightsabout criminals’actions, which help to develop more
effectivecompliance mechanisms.
Keywords Money laundering, Terrorism financing, Compliance
Paper type Research paper
1. Introduction
Financial services providers are forced to comply with extraordinarily strict anti-money-
laundering and anti-terrorism-financing mechanisms. Hence, the finance industryhas hired
an army of compliance professionals to fulfill those legal requirements. However, there has
so been no sufficiently in-depth analysisof whether the current anti-money-laundering and
anti-terrorism-financing mechanisms are effective in practice. If easily circumvented, the
compliance mechanisms established by financial institutions could be considered a rather
expensive and largely pointless gesture. Therefore, this artic le assesses how easily the current
anti-money-laundering and anti-terrorism-financing mechanisms can be bypassed and
emphasizes how such mechanisms could and should be adjust ed so as to be more effective.
Suggestions for financial regulators, financial institutions and compliance officers are outlined.
2. Literature review
Money laundering in some shape or form has probably existed, as the introduction of money,
and is commonly considered an inevitable note my academic suggestions, as well as linguistic
ones by-product of criminal activities (Argentiero et al., 2008,p.341f;Muller et al.,2007,p.3).
Money
laundering and
terrorism
financing
337
Journalof Money Laundering
Control
Vol.26 No. 2, 2023
pp. 337-348
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-05-2019-0043
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