Local intelligence – the missing link in CTF regulation in the banking sector
| Published date | 07 January 2019 |
| Pages | 132-144 |
| DOI | https://doi.org/10.1108/JMLC-10-2015-0047 |
| Date | 07 January 2019 |
| Author | Mohammed Ahmad Naheem |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Local intelligence –the missing
link in CTF regulation in the
banking sector
Mohammed Ahmad Naheem
Mayfair Compliance, Frankfurt, Germany
Abstract
Purpose –This paper aims to examine the current challenges that banking counter-terrorism financing
(CTF) regulation faces in the fight against globalterrorism. The paper examines the potential impacton the
banking sector of the current civilcases that have been taken against several of the leading global banks by
victims and theirfamilies.
Design/methodology/approach –The paper reviewscurrent academic thinking on CTF regulationand
analyses these in context of several legal challenges that have been made against some of the larger global
banks, including,HSBC, the Arab Bank and NatWest.
Findings –The paper finds that current approaches towards CTF compliance are no longer a viable
option for banks, as court cases have found that additional factors need to be included in risk assessment
frameworks. The main finding is that risk-based approaches need to find ways to incorporate local
intelligence into their risk systems and that banks can no longer rely on basic tick box compliance
measures.
Research limitations/implications –There are implications for the banking and regulatory sectors
developing anti-moneylaundering /CTF policies. There are also legal implicationsfor the banking sector who
may be seekingto defend accusations of supporting terrorism.
Originality/value –The paper’s originalityis that this level of analysis of CTF regulation using legal case
studieshas not been followedbefore.
Keywords Compliance, Banking, Risk assessment, Anti money laundering regulation,
Counter terrorism finance
Paper type Viewpoint
Please note that this paper was composed and submitted for review to this journal in October 2015 –
a time at which the author was working on his second doctorate level research project titled “Trade
Based Money Laundering: Exploring the Implications for International Banks”.
This paper contributes towards a series of papers exploring the banking and regulatory
implications of different forms of terrorist-related financial crime, hoping to assist banks and
providing them with the much needed guidance to implement effective CTF procedures.
All the content within this paper was current at the time of submission (October 2015). The
banking and regulation industries have evolved since then, with new material from academic
research also emerging. These points need to be taken into consideration when reading this
paper.
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 (www.sevenfoundation.ch).
The author also thanks Professor Muhammad Jumah (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.
JMLC
22,1
132
Journalof Money Laundering
Control
Vol.22 No. 1, 2019
pp. 132-144
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-10-2015-0047
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
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