Emerald | Journal of Money Laundering Control | Table of Contents

The exploitation of global offshore financial centres: banking confidentiality and money laundering

literatinetwork@emeraldinsight.com (Mary Alice Young) — Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Purpose - Purpose – The paper aims to highlight the relationship between money laundering and banking confidentiality in offshore financial centres - particularly following the recent publicity and BBC expose surrounding the criminal use of offshore financial centres. It proposes that there has long been concern over the illegitimate uses of offshore financial centres and that the continuing exploitation of them by criminals, is in part, attributed to the West's use of these financial hotspots. The paper outlines the previous attempts by global regulatory bodies to curb money laundering in offshore financial centres and explores some of the reasons for the continuation of money laundering in offshore financial centres. Keywords: Money laundering, banking confidentiality, banking secrecy, offshore financial centres, confiscation. Article Type: Research paper Design/methodology/approach - Design/methodology/approach – The paper was compiled by accessing and analysing primary and secondary data which is publicly available. The analysed data were complemented by the author's new theory of the West's collusion with offshore financial centres as a possible reason for the superficial commitment to anti-money laundering laws and guidelines. Findings - Findings – The findings in the paper conclude that even though there have been global efforts to combat money laundering in offshore financial centres, there is little commitment from the offshore financial centres themselves, and the West, to effectively implement anti-money laundering regulations.Originality/value - Originality/value – This paper fulfils a gap in the literature by exploring the relationship between the West and offshore financial centres - more specifically the West's continued use of these centres acts as an incentive to avoid relaxing tight banking confidentiality laws. Further research in this area is needed to assess the full impact of the West's relationship with offshore financial centres.

ADVANCE FEE FRAUDS MESSAGES – NON DECLINING TREND

Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Purpose - Paper presents some intake on the advance fee frauds. Frauds of which frequency of occurrences, despite being long present and people are globally aware of them, still present great danger. Several quantitative and qualitative analyses were done in order to find out how and why these messages actually work.Design/methodology/approach - Paper is based on literature review, quantitative analysis (using SPSS) and qualitative analysis (using MAXQDA). Databases ware composed from messages accumulated in two periods 1998-2005 (547 messages) and Jan-Sept 2012 (59 messages).Findings - Advance fee frauds are not declining in occurrences. There are constantly developing and use both bulk sending and narrower targeting. The latter present more dangers as the messages are more adapted to the interest of the message receiver. There also seems to be a severe resemblance and connection to other types of fraud, especially cybernetic frauds (like pilfering, phishing, or e-mail spoofing). These types of frauds are global and no country is immune noir can any country be excluded, from hosting the perpetrators.Research limitations/implications - Though our quantitative research database was big enough, there are some minor problems connected with it. Part of a database is a product of Slovenian police, which intended to analyze the content of messages therefore because of police confidentiality issues, database lacks some traceability. One would maybe argue that police used methodology is not always the same as scientific usage of research methods, but in this cases database poses all other necessary empirical attributes. Second database was composed by messages received by authors, therefore we cannot say that it’s totally globally representable.Originality/value - Though there are several qualitative and quantitative studies of advance fee messages done almost daily, only limited number is done in academic settings. However some academic studies would benefit from non-academic and vice versa. So we present some input to both kinds of studies.

The System Integration of Anti-Money Laundering Data Reporting and Customer Relationship Management in Commercial Banks

literatinetwork@emeraldinsight.com (Lishan Ai) — Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Purpose - This paper proposes to use system integration between customer relationship management (CRM) and anti-money laundering (AML) suspicious data reporting in commercial banks to increase the initiative of suspicious transaction identification, reduce the false reporting rates, and improve the intelligence quality.Design/methodology/approach - This paper introduces the structure of CRM in commercial banks, discusses deficiencies of current AML data reporting system, and designs the layering of CRM and AML transaction identification module.Findings - This paper finds that the functions of customer behavior analysis and customer background investigation of CRM system can be redesigned and used for increasing the quality of AML suspicious transaction reporting in commercial banks.Originality/value - This paper creatively proposes that system integration of CRM and AML suspicious transaction reporting can make contribution to reducing the AML cost for commercial banks.

Modelling the Effect of Deception on Investigations Using Open Source Intelligence (OSINT)

literatinetwork@emeraldinsight.com (Paul Watters) — Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Purpose - A key problem in money laundering investigations based on open source intelligence gathering is the performance (efficiency and accuracy) of people in the team, where suspects will typically try to conceal incriminating evidence or deliberately deceive investigators to avoid prosecution. If we are able to develop a suitable psychological model of deception for web-based investigations, it should be possible to develop training programmes to improve investigators’ ability to "see beyond" deliberate concealment. In this paper, a model based on non-linear system identification is empirically tested using a well-known psychological phenomenon (the Stroop effect), where conflicting colour and text information is presented to subjects which they are instructed to process in a certain way.Design/methodology/approach - ExperimentalFindings - The results indicate that strategies for improving investigator information processing performance can benefit from models that incorporate both linear and non-linear components.Originality/value - Although the Stroop effect is well known, no other papers have investigated how it may be used to evaluate and monitor the performance of investigators. The real value of this study will emerge when tools are developed to better train investigators to identify concealment within conflicting input data.

AN APPRAISAL OF UNITED NATIONS AND OTHER MONEY LAUNDERING AND FINANCING OF TERRORISM COUNTER-MEASURES

literatinetwork@emeraldinsight.com (Norman Mugarura) — Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Purpose - The purpose of the paper was to examine the challenges inherent in harnessing the UN and Other AML counter-measures paying particular attention to the United Nations Resolutions on countering financing of terrorism and why the UN security Resolutions have not been easy to invoke. As regards Other AML counter-measures, examined the legal status of soft law instruments, articulating the possible reasons why they are easy to implement.Design/methodology/approach - The paper was written by the analysis of UN and Other AML counter-measures--which were evaluated in the gaze of how they have been implemented across states. While states are under an obligation to implement UN AML counter-measures such as International treaties and Soft Law instruments, private banks as non-state actors have exploited some loopholes in the law to flaunt them. This has undermined the efficacy of global AML Counter-measures. Many Banks have been fined for violating UN sanctions on countries like Iran and Sudan. These examples were utilized in appraising the current UN and other AML counter-measures across states.Findings - The findings of the paper were compelling in demonstrating that that global anti-money laundering laws are often emasculates by the fact that they are implemented in the realm of international law. International law manifests itself within independent member states vested strategic self-interests. In the events of conflicts, national self-interests will prevail. But again, money laundering is an opportunistic crime because it generates both synergies and externalities and the response of individual states often depends on how it is affected by it. It is wrong to assume as doing things in realm of international law is not as easy as it is presumed to be. Research limitations/implications - It would have been better to carry out interviews so as to corroborate secondary data sources used in writing this paper. But due to some constraints, this option was not possible. It would also have been better to undertake the analysis of data based on a large sample of countries rather than cherry picking. While implementing AML counter-measures in the realm of international is necessary to foster international co-operation, there are still some loopholes that need to be paid more attention.Practical implications - States need to appreciate the paramount importance of working together in confronting international challenges because no state can afford to act unilaterally. While money laundering is an opportunistic crime, the short term gains accrued to non-co-operative should not cloud the judgment of some states to think that they can go it alone. Money laundering is bound to remain an international challenge unless states do more in lending their support in the implementation of engendered regimes.Originality/value - The paper was written, analysed and evaluated based on the most recent literature on implementation of UN and other AML counter-measures across countries. It also utilized the recent cases involving violations of UN AML counter-measures by banks on sanctioned countries such as Iran and Sudan.

Money laundering, new technologies, FATF and Spanish penal reform

literatinetwork@emeraldinsight.com (Miguel Abel-Souto) — Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Purpose - This paper attempts to examine new technologies, typologies, FATF recommendations and the last Spanish penal reform on money laundering.Design/methodology/approach - The paper describes the potential provided via internet and electronic transfers, prepaid cards and payment services with mobile phones for executing money laundering, and comments the Spanish penal reform on this crime.Findings - The study finds that the new payment systems facilitate money launders’ criminal activity. However, the development of technologies, including the internet, has unquestionable advantages involved, and even provides verification of identity or other duty of surveillance for the prevention of money laundering. Also, this paper analyzes the amendments made recently in the Spanish Criminal Code regarding money laundering.Originality/value - This paper would be beneficial to the legislature. Future development of measures for the prevention of money laundering should take into account all potential threats that arise from the use of new technologies. Moreover, the long list of modifications on laundering undermines the legal certainty and the consideration of criminal law as ultima ratio, within the framework of a globalized crime policy.

Editorial

literatinetwork@emeraldinsight.com (Barry Rider) — Fri, 05 Jul 2013 00:00:00 +0100

Abstract

Not available.