The financial action taskforce and money laundering: critical analysis of the Panama papers and the role of the United Kingdom
| DOI | https://doi.org/10.1108/JMLC-11-2020-0129 |
| Published date | 12 February 2021 |
| Date | 12 February 2021 |
| Pages | 752-761 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Aisha Hassan Al-Emadi |
The financial action taskforce and
money laundering: critical
analysis of the Panama papers and
the role of the United Kingdom
Aisha Hassan Al-Emadi
Judge in the Court of First Instance, Supreme Judiciary Council, Doha, Qatar
Abstract
Purpose –This paper aims to study the effectiveness of the implementation of the Financial Action
Task Force (FATF) recommendations in the UK in an attempt tocombat the laundering of proceeds of
corruption.
Design/methodology/approach –A desk review of secondary resources was conducted to analyze
availableliterature to examine the research topic.
Findings –The leakage of 11.5 million documents,known as the Panama papers, has revealed that the UK
functioned as a safe havenfor illicit and corrupt money. In an attempt to address this, the country called for a
public registry of beneficial owners to disclose the identitiesof the owners of the incorporated corporations
and to extend them to individuals abroad holding UK property. The FATF report recognizes the UK’s far-
reaching regulation.Despite the measures taken, UK still faces serious risks with regard to the laundering of
criminal proceeds, which demonstrates that technical compliance with FATF rules is not enough to
effectivelycurb money laundering.
Originality/value –This study suggests that FATF rules’effectiveness in identifying instances of
laundering the proceeds of corruptionis limited because of the deeply rooted system vulnerabilities and the
rapid changesin money laundering trends.
Keywords FATF, Corruption, Money laundering, Regulations, Due diligence, Proceeds of crime
Paper type General review
Introduction
International bodies and the national government, in the 1980s, indicated an interest in
mitigating money laundering that resulted from the significant illicit profit generated from
drug trafficking. Criminals have been using different means to launder the proceeds of
criminal activities to disguise the illicit origins (Livescu, 2017, p. 7). This increased the
concerns regarding the risks faced by the international financial sector, primarily the
banking system (Mekporet al., 2018,p.444).
In 1989, the Financial Action Task Force (FATF) was established by the G-7 countries, that
is, USA, UK, France, Germany, Italy, Canada and Japan, following the G-7 summit held in
France (Turner, 2015, p. 554). The meeting aimed to promote an international framework to
address the laundering of proceeds from drug trafficking. The task force attempts to mitigate
money laundering through 40 standards of recommendations.
In 1996, the FATF broadened its scope to include predicate offenses other than drug
trafficking (Turner, 2015, p. 554). It also increasedthe scope of recommendations to include
measures to prevent terrorism financing after the 9/11 attack (Mekpor et al., 2018, p. 444).
Subsequently, because of the rapid changes in laundering trends and techniques, FATF’s
JMLC
24,4
752
Journalof Money Laundering
Control
Vol.24 No. 4, 2021
pp. 752-761
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-11-2020-0129
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