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Journal of Money Laundering Control
Number of Followers: 366  
  Hybrid Journal Hybrid journal (It can contain Open Access articles)
ISSN (Print) 1368-5201
Published by Emerald Homepage  [345 journals]
  • Editorial
    • Pages: 478 - 480
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 478-480, October 2018.

      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:25:35Z
      DOI: 10.1108/JMLC-08-2018-0051
  • A comparative analysis of the prepaid card laws/regulations in Nigeria,
           the UK, the USA and India
    • Pages: 481 - 493
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 481-493, October 2018.
      Purpose This paper aims to compare the prepaid card laws/regulations in Nigeria, the UK, the USA and India with the aim of determining the best approach to regulating prepaid cards, that is the approach that promotes financial inclusion and also makes the product less attractive for money laundering. Design/methodology/approach This paper relies mainly on primary and secondary data drawn from the public domain. It also relies on documentary research. Findings This paper makes the following findings and recommendations: Nigeria has the best approach to regulating providers of prepaid cards. Nigeria’s approach could foster financial inclusion and at the same time mitigate the money laundering risks associated with prepaid cards. Nigeria’s approach is not too strict like the Indian approach and it is not too relaxed like the UK and the USA approach. Operators, including mobile/telecommunications operators, wishing to operate money transfer schemes in Nigeria are allowed to do so with approval from the Central Bank of Nigeria and in strict conjunction with licensed deposit-taking banks or financial institutions. The UK, the USA and India are recommended to adopt Nigeria’s approach. The UK and the USA have the best approach to regulating agents of prepaid cards. Both countries require prepaid card providers to maintain a current list of agents and make it available to the relevant authorities upon request. The approach allows regulatory agencies to effectively monitor and supervise prepaid card agents. India and Nigeria are advised to clarify their approach regarding the regulation of prepaid card agents. The prepaid card laws/regulations of those countries should be modified to specify if the agent of a prepaid card provider is required to be licensed or registered by a competent authority or if the prepaid card provider (the principal) is required to maintain an updated list of agents which must be made accessible to a designated competent authority, when requested. The new changes will afford regulatory authorities the opportunity to effectively monitor and supervise prepaid card agents. India’s approach to thresholds would preclude most individuals in the intended target market from accessing basic financial products, as most people typically do not have residential addresses that could be confirmed by reference to formal documentation. India should adopt the “risk-based approach” and not the “wholesale de-risking approach”. Research limitations/implications Given their low-risk characteristics, closed-loop cards, specifically cards which do not allow reloads or withdrawals, remain outside the scope of this paper. Originality/value Although there have been researchers who adopted the comparative approach like Jean J Luyat and Will Cain, the comparative approach adopted by those researchers was not detailed enough and also was not aimed at seeking to answer the research question in Section 1 of this paper. Both writers focused on only the aspect of financial inclusion making the whole research a one-sided approach. Jean J Luyat focused on “how regulation had an impact on the development of prepaid cards in Japan and Europe”. He was able to discover that prepaid cards were growing rapidly in Japan but not gaining acceptance as a payment method in the European Union (EU) and France. He aligned such growth in Japan to different factors including regulation. He stated that Japan had a simple and flexible regulatory framework compared to the EU and France which have a complex regulatory system with strict prudential requirements. Nothing was said about the money laundering aspect of such regulation and neither was anything said about thresholds and other optional recommendations canvased by the Financial Action Task Force. The Electronic Money Directive referred to by Jean J Luyat has already been repealed and a second Electronic Money Directive is in place. A comparative approach is adopted in this research seeking to compare the approach in Nigeria with that of the UK, the USA and India. Each of these countries adopted different approaches. The results are to help answer the research question in Section 1 of this paper. The countries were selected on the basis of how strict their regulatory regime is. India’s regulatory regime is the strictest while the UK and the USA are the most lenient. Nigeria is caught in between strict/lenient.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:25:50Z
      DOI: 10.1108/JMLC-03-2017-0010
  • Toward a new model of money laundering
    • Pages: 494 - 497
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 494-497, October 2018.
      Purpose The criminal money laundering statutes grew out of the experience drug investigators had in tracking the proceeds of illegal drug transactions. Frequently, the cash was disguised as legitimate proceeds or hidden in a way that concealed the true owner and was then moved into the legitimate stream of commerce or returned to the country where the drugs originated to keep the scheme going. This led to training investigators to believe that money laundering always occurred in three stages: placement, layering and integration. That model, however, has little application to most money laundering scenarios, including those that involve funds already in electronic form when the laundering process begins. This paper aims to take a broader look at money laundering and suggests an accordingly broader approach to identifying money laundering transactions. Design/methodology/approach A review of the origins of the current paradigm. Findings The current paradigm is obsolete. Originality/value A broader approach to training is needed.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:25:51Z
      DOI: 10.1108/JMLC-09-2017-0045
  • FIFA – highlighting the links between global banking and
           international money laundering
    • Pages: 498 - 512
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 498-512, October 2018.
      Purpose This paper uses the recent (August 2015) FIFA arrests to provide an example of how illicit financial flows are occurring through the formal banking and financial services sector. The purpose of this paper is to explore which elements of anti-money laundering (AML) compliance need to be addressed to strengthen the banking response and reduce the impact of IFFs within the banking sector. Design/methodology/approach The paper is based on the indictment document currently prepared for the FIFA arrests and the District Court case of Chuck Blazer the FIFA Whistleblower. It uses the banking examples identified in the indictment as typologies of money laundering and wire fraud. Corresponding industry reports on AML compliance are included to determine where the major weaknesses and gaps are across the financial service. Findings The main findings from the analysis are that banks still have weak areas within AML compliance. Even recognised red flag areas such as off shore havens, large wire transfers and front companies are still being used. The largest gaps still appear to be due diligence and beneficial ownership information. Research limitations/implications The research topic is very new and emerging topic; therefore, analysis papers and other academic writing on this topic are limited. Practical implications The research paper has identified a number of implications for the banking sector, addressing AML deficiencies, especially the need to consider the source of funds and the need for further enhanced due diligence systems for politically exposed and influential people and the importance of beneficial ownership information. Social implications This paper has implications for the international development and the global banking sector. It will also influence approaches to AML regulation, risk assessment and audit within the broader financial services sector. Originality/value The originality of this paper is the link between the emerging issues associated with allegations of bribery and corruption within FIFA and the illicit financial flow implications across the banking sector.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:11Z
      DOI: 10.1108/JMLC-08-2015-0037
  • Financing terrorism through cryptocurrencies – a danger for
    • Pages: 513 - 519
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 513-519, October 2018.
      Purpose This purpose of this paper is to illustrate how terrorists finance their activities through cryptocurrencies. Design/methodology/approach A qualitative content analysis of 30 semi-standardized expert interviews with both illegal financial service providers and prevention experts developed understanding of the concrete techniques of financing terrorism through cryptocurrencies. Findings Terrorists could use Bitcoin to receive donations from their supporters. Research limitations/implications As the findings are based on semi-standardized interviews, they are limited to the perspectives of the 30 interviewees. Practical implications The identification of gaps in current prevention mechanisms is intended to provide legislators and intelligence agencies with insights into the operations of terrorism financers. Originality/value While the existing literature focuses simply on identifying areas that could play a role in financing terrorism, this paper describes concrete methods, taking both prevention and criminal perspectives into account.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:25:36Z
      DOI: 10.1108/JMLC-06-2017-0024
  • Anti-money laundering and moral intensity in suspicious activity reporting
    • Pages: 520 - 533
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 520-533, October 2018.
      Purpose This paper aims to examine the influence Jones’ Moral Intensity Model (1991) has on the decision-making process of anti-money laundering (AML) compliance officers charged with reporting suspicious money laundering transactions in Jersey. Design/methodology/approach Ten interviews were conducted to elicit participants’ views on the six dimensions of moral intensity and their influence on the compliance officers’ decision to submit a suspicious activity report (SAR) of potential money laundering. Findings The findings indicate that the officers’ moral intensity to submit a SAR seems to be heavily influenced by issue-specific contextual factors. Contexts (legal and legislative mandates) seem to have more of an effect on the moral intent and actions of the officers rather than directly affecting the decision to submit a report of a suspicious money laundering transaction. Research limitations/implications The paper lays the groundwork for further work in this area and calls on researchers to develop instruments that can enhance the measurements of the dimensions of moral intensity. Practical implications The setting (AML in the financial sector) is both timely and extremely interesting to keep studying, particularly in Jersey because of its dubious sensitive particularities. Originality/value The study is the first to examine Jersey AML sector through the lens of moral intensity. In this sense, the paper poses interesting questions, namely, to explore the dynamic complexities experienced by compliance officers in Jersey to detect and report suspicious money laundering activities and the decision-making criteria of actually submitting a SAR.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:06Z
      DOI: 10.1108/JMLC-09-2017-0048
  • Assessment of asset forfeiture in targeting Somali piracy ransoms
    • Pages: 534 - 544
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 534-544, October 2018.
      Purpose The purpose of this paper is to consider the applicability and challenges of using asset forfeiture mechanisms in taking away the illicit gains of Somali piracy for ransoms. Design/methodology/approach The paper presents a desk research on the issue. It is based on analysis of the key principles in the area and relevant literature on the subject. Findings Asset forfeiture mechanisms can be used to facilitate the seizure of Somali piracy proceeds. It is applicable to those who directly or indirectly benefited from piracy: the foot soldiers, financiers and other beneficiaries. This would enable withdrawal of piracy re-investment capital and hence may act as a disincentive for current and prospective offenders. Research limitations/implications For the initiative to work, various states and other actors need to cooperate. However, incentives such as corruption, the personal interests of individuals and states that have benefited from Somali piracy, may make them unwilling to collaborate. This would definitely hinder the implementation and effectiveness of using asset forfeiture. Originality/value Much of the literature on Somali piracy for ransoms has focussed on maritime solutions. Further, authors and organisations have advocated for following the money trail. As a result, consideration of the benefits and challenges of doing so needs to be done. This paper seeks to fill this gap.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:36Z
      DOI: 10.1108/JMLC-09-2017-0053
  • Financial crime, corruption and tax evasion: a cross-country investigation
    • Pages: 545 - 554
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 545-554, October 2018.
      Purpose This paper aims to examine the relationship between the financial crime and tax evasion and tests whether corruption moderates such a relationship. Design/methodology/approach Tax evasion measure is based on Schneider et al. (2010). Financial crime is collected from Basel anti-money laundering (AML) report. Findings Using a sample of 120 countries, the authors find that the level of financial crime is positively associated with tax evasion. When testing for the moderating effect of corruption, they document that the positive relationship between financial crime and tax evasion is more pronounced for high corrupt environments. Originality/value The findings have policy implications for governments aiming to combat tax evasion and financial crimes.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:30Z
      DOI: 10.1108/JMLC-10-2017-0059
  • Making sure crime does not pay
    • Pages: 555 - 566
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 555-566, October 2018.
      Purpose This paper aims to analyse a new piece of Dubai legislation, Dubai Law No. (4) of 2016: The Dubai Economic Security Centre (DESC) Law, in respect of its role and impact on economic crime mitigation in the emirate and in the country as a whole. Design/methodology/approach The jurisdiction’s various risks and vulnerabilities were examined to determine weaknesses and gaps in the current legislative and regulatory framework. Findings The findings highlight that despite numerous legislative efforts targeting economic crime, bringing economic criminals to justice has remained an issue in Dubai. Creation of the Dubai Economic Security Centre (DESC) may mark a significant change in that emirate’s approach to tackling this issue. Research limitations/implications Though the DESC itself is (as of this writing) still in a formative state, it is clearly intended to be a comprehensive response to expedite and streamline investigative processes and mitigate the multi-jurisdictional problems with which law enforcement has hitherto contended. Practical implications The DESC is also intended to serve not only as an informational clearinghouse but also as an organisational entity with significant roles in law enforcement and even legislation. Social implications Regardless of its ambitious and promising results, the effectiveness of its organisational structure and performance is yet to be determined. Originality/value This research can be beneficial for the government officials in charge of establishment and launch of the DESC, as well as for future research as it points to its potential ambiguities and misinterpretations.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:25:47Z
      DOI: 10.1108/JMLC-10-2017-0060
  • Tax gap in the global economy
    • Pages: 567 - 583
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 567-583, October 2018.
      Purpose The purpose of this paper is to present an up-to-date estimation of the tax gaps (TGs) of 35 countries (28 EU member states and 7 additional countries – Australia, Canada, Japan, New Zealand, Turkey, Switzerland and the USA, both as a percentage of the gross domestic product (GDP) and a nominal value (in US$). Design/methodology/approach The authors’ empirical study was carried out on 35 selected countries. To estimate the TG, indirect methodology has been applied, where the basic components used in the estimation procedure are the level of the shadow economy estimated with the multiple indicators multiple causes method, the GDP at current prices (in US$), the total tax rate (TTR) of a given country and the indirect method of follow-up and estimation of lacking data. Findings The basic finding of the research is that the level of the TG is determined individually for a given country and is strongly correlated with the GDP, i.e. if the GDP is high, the TG as the percentage of the GDP is lower in the majority of countries. It is particularly easily noticeable in countries such as the USA (TG – 3.8 per cent of the GDP), the Great Britain (TG – 3.2 per cent of the GDP) or Japan (TG – 4.3 per cent of the GDP). Research limitations/implications A limitation of the adopted research method is the lack of application of direct (supplementary) methods which would include potentially lost contributions from foreign sources and not registered taxpayers. Another research constraint is that the authors’ estimations do not take into account the so-called direct top-down approach based on the VAT Theoretical Total Liability. The weakness of the adopted procedure of estimation is also the use of TTR only instead of comparative approach including tax burdens and average tax rate. Practical implications TG has recently become a hotly debated issue and poses a big challenge to the public finance in many countries. The paper provides some recommendations for the policymakers how to reduce the size of the TG. Social implications Tax evasion and tax avoidance leading to the emergence and expansion of the TG erode the business ethics and distort the rules of fair competition, thus undermining the social trust and moral infrastructure of business transactions. Originality/value One of the major research findings is that 30 per cent of the TG in a given country is determined by the TTR, which – for the first time – provides empirical proof that tax policy (as part of overall economic policy) plays an important role and that it may determine the fiscal effectiveness of a given country.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:25:53Z
      DOI: 10.1108/JMLC-12-2017-0072
  • The regime against money laundering: a call for scientific modelling
    • Pages: 584 - 593
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 584-593, October 2018.
      Purpose The purpose of this paper is to examine the magnitude of the global problem of money laundering and the scholarly critics of money laundering concept. The paper further explores the scientific modelling to combat money laundering transactions. Design/methodology/approach The research methodology adopted was qualitative analysis. This was applied through the use and analysis of documents and expert interviews. Findings The paper reveals how the global displacement on the fight against money laundering is being determined by “attractiveness index”. This attractiveness index is the dark side affecting anti-money laundering (AML) concept within developing economies. The critics of the AML accounts for major discrepancies associated with the context of the term AML regimes and international standards to combat illicit financial flows. Social implications The regimes against money laundering compel countries to adopt the same recommendations and standards and were not given opportunity to proffer their own creative alternatives within their own circumstances. Originality/value The paper suggests AML Transaction Validation Model in the quest to combat illicit financial flows originated from organized and serious crime within the global jurisdictions.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:27Z
      DOI: 10.1108/JMLC-11-2017-0066
  • The big bath of demonetization in India: strike on black money for
           corporate governance
    • Pages: 594 - 600
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 594-600, October 2018.
      Purpose This paper aims to focus on the concept of abolition of black money and the demonetization movement started in India for cleaning black money and its impact on corporate world and Indian economy. It discusses the corporate governance effect of the demonetization scheme and various policy measures taken by the government to unearth and curb the black money in the country. It also states the challenges in its process of implementation and implications for future. Design/methodology/approach It appraises and reviews the concept of demonetization and its process in India since its implementation on November 8, 2016. Findings The biggest positive effects of this move were eradication of stocked and staked up money, cleansing of the financial system and improving governance in India. But its implementation had mix outcomes with its own challenges for future improvement. Practical implications The lessons drawn from the experience are expected to pave way for the countries at large. Originality/value It is an original paper on demonetization in India, and it is hoped that the lessons learnt thereof will pave the way for the world at large.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:25Z
      DOI: 10.1108/JMLC-11-2017-0063
  • Challenges of implementing an effective risk-based supervision on
           anti-money laundering and countering the financing of terrorism under the
           2013 FATF methodology
    • Pages: 601 - 615
      Abstract: Journal of Money Laundering Control, Volume 21, Issue 4, Page 601-615, October 2018.
      Purpose The purpose of this study is to assess whether level of income of a particular country affects the level of effectiveness in anti-money laundering (AML)/ countering the financing of terrorism (CFT) supervision to identify the most important recommendations in achieving high level of effectiveness and critically discuss the findings of the fourth round evaluations with the outcome of first two objectives. Design/methodology/approach The level of effectiveness was rated in terms of a four-point Likert scale given 4 for high, 3 for substantial, 2 for moderate and 1 for low level of effectiveness. The countries were ranked using a four-point Likert scale given 4 for high income, 3 for upper middle income, 2 for lower middle income and 1 for low income countries as per the categorisation of World Bank list of economies (World Bank, 2017). For the purpose of estimation, level of effectiveness was rated in terms of a four-point Likert scale given 4 for high, 3 for substantial, 2 for moderate and 1 for low level of effectiveness. The level of technical compliance was ranked using a five-point Likert scale given 5 for compliant, 4 for largely compliant, 3 for partially compliant, 2 for non-compliant and 1 for not applicable as per the ratings given in FATF 2013 methodology (FATF, 2013). Findings It was observed that the level of income of a particular jurisdiction has a positive relationship with the level of effectiveness in AML/CFT supervision. Statistical analysis reveal that AML/CFT framework on regulation and supervision of financial institutions (Recommendation 26) and providing guidance and feed back to reporting entities (Recommendation 34) have significant impact on effectiveness level on AML/CFT supervision over the powers of supervisors (Recommendation 27), regulation and supervision of designated non-financial business and professions (Recommendation 28) and sanctions (Recommendation 35). Research limitations/implications The research was limited to 36 fourth round mutual evaluation reports. Originality/value This paper is an original work done by the author as a result of the experience which the author received involving as an assessor in mutual evaluations.
      Citation: Journal of Money Laundering Control
      PubDate: 2018-12-11T09:26:46Z
      DOI: 10.1108/JMLC-11-2017-0062
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