Journal Cover Journal of Money Laundering Control
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   Hybrid Journal Hybrid journal (It can contain Open Access articles)
   ISSN (Print) 1368-5201
   Published by Emerald Homepage  [335 journals]
  • China’s pursuit of suspect wealth – an opportunity for
           co-operation
    • First page: 218
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.

      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:33Z
      DOI: 10.1108/JMLC-04-2017-0015
       
  • Is the third Greek Memoranda of Understanding and Loan Agreement of August
           2015 odious?.Truth Committee on Public Debt in Greek or Hellenic
           Parliament and Criticism on result
    • First page: 220
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose In Greece the odious debt concept received high attention during recent financial crisis and Greek or Hellenic Parliament decided to establish a Special Committee. Design/methodology/approach The Greek Parliament Truth Committee on Public Debt, investigated Public Debt in Greece and main findings are: (a) increase of debt was related to the growth in interest payments, (b) high public spending in defence expenditures associated with corruption scandals, (c) falsification of public deficit and debt statistical data and illicit capital outflows, (d) adopting the Euro led to a drastic increase in private debt. Findings Based on above the Third MoU and the August 2015 loan agreement, according to Greek Parliament Truth Committee on Public Debt are illegal, illegitimate and odious because they fail to recognize the illegal, illegitimate and odious character of Greece’s existing debt, as well as the odious, illegal and illegitimate nature of the instruments by which this debt was financed from 2010 until early 2015. The Third MoU and the August 2015 loan agreement violate the fundamental human rights of the Greek people (both civil and political as well as socio-economic rights) as set out in the Greek Constitution and under international law (treaty-based and customary). Research limitations/implications On the other side of results, Greece was a democratic regime during the time it contracted the vast majority of its loans and membership into the Eurozone, benefitted country by gaining the highly low interest rates that Euro currency involved. Also, substantial borrowing for Greece spent directly on the people via social welfare and public sector wages and infrastructure development. Practical implications Therefore, Greece instead of the odious debt doctrine should resort to other debt solutions such as simple debt repayment, restructuring or “haircut” of the debt (principal and interest) or declare bankruptcy without invoking the odious debt doctrine. Although this recourse avoids the dangerous precedent-setting risks of the odious debt doctrine, it also involves numerous other complexities and policy problems because with default, the banking system would collapse. Originality/value It's the first study examining the topic of odious PUBLIC debt in Greece.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:37Z
      DOI: 10.1108/JMLC-11-2015-0051
       
  • The use of anti-money laundering tools to regulate Ponzi and other
           fraudulent investment schemes
    • First page: 231
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose The purpose of the article is to explore dynamic issues relating to Ponzi and other fraudulent investment schemes to demonstrate how scammers convince victims of investment opportunities that turn out to be nothing but fraudulent. Specifically, it explores the nature of Ponzi, Pyramid, Advance fees scams and the mechanisms used to defraud unsuspecting victims of their money. The risks associated with Ponzi schemes can be gleaned in the fraud case of Bernie Madoff (1998) who had been running a Ponzi scheme in United states for twenty years and reaping investors of their returns without ever discovering it until the business collapsed. The other notorious investment scams include “the Nigerian letter frauds” which combine the threat of impersonation fraud with a variation of an advance fee scheme in which a letter is mailed to offer recipients the “opportunity” to share in a percentage of millions of dollars that the author—a self-proclaimed government official—is trying to transfer out of his country. This article assesses the possibility of using anti-money laundering regulatory tools such as a “risk based approach” and “Know Your Customer” to protect victims of fraudulent investment schemes. Design/methodology/approach The article was written by analysis of primary and secondary data and by utilising newspaper reports on different types of fraudulent investment schemes and the context in which they normally happen in practice. It has also utilized case studies and relevant examples to demonstrate different typologies of fraudulent schemes and the possibility of using anti-money laundering regulatory tools to regulate them Findings The findings suggest that many people who fall victims of fraudulent investment schemes such as Ponzi and advance fee fraud are not gullible but lack knowledge of their sophistication and how they operate to defraud unsuspecting victims of their savings. Research limitations/implications The article was largely a library based research and there were no interviews carried out to corroborate some of the data used in writing it. This would have been important to mitigate the potential for bias the secondary data used was generated. Practical implications The practical implication of the paper is to highlight the inherent risks in Ponzi and other fictitious investment schemes that are often cleverly conjured to exploit ignorance of the public and defraud them of their savings. It demonstrates that while financial institutions can use their regulatory tools such as KYC to safeguard financial markets from criminal exploitation, people should be vigilant to avoid falling victims of criminal exploitation and lose their savings. Originality/value Research on Ponzi schemes, advance fee fraud and misuse of letters of credit do not seem to have received proportionate scholarly attention as other forms of financial crimes. This article therefore addresses a need in the market on many issues it relates.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:26Z
      DOI: 10.1108/JMLC-01-2016-0005
       
  • Designated non-financial businesses and professions – the weak link in
           Australia’s AML/CTF regime
    • First page: 247
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose This purpose of this paper is to highlight vulnerabilities in Australia’s anti-money laundering/counter-terrorism financing (AML/CTF) regime through Australia’s non-compliance with the Financial Action Task Force (FATF) Recommendations on the regulation of designated non-financial businesses and professions (DNFBPs). It is intended, that through examination of some of the rationale used in support and opposition to AML/CTF regulation of DNFBPs, the paper will provide support for the position that Australia’s AML/CTF regime should incorporate regulation of DNFBPs. Design/methodology/approach The paper presents findings from research conducted in 2015 that focused on some of the principal arguments for and against the extension of Australia’s AML/CTF regime to DNFBPs. Review and consideration of the merits of these arguments is undertaken to support the conclusion that AML/CTF regulation should be extended to DNFBPs in line with the FATF Recommendations. Findings The current exemption of many DNFBPs from AML/CTF regulation perpetuates vulnerabilities within Australia’s AML/CTF regime; until this is addressed, criminals will continue to exploit these vulnerabilities and the regulated AML/CTF sector will continue to shoulder an unfair burden of Australia’s AML/CTF response. Practical implications This paper provides an objective assessment of factors for and against the regulation of DNFBPs in Australia. It may be of value to government policymakers, regulators, financial institutions and DNFBPs. Originality/value This paper complements existing research on this subject and provides a specific focus on some of the main arguments for and against the extension of Australia’s AML/CTF regime to specific DNFBPs.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:08Z
      DOI: 10.1108/JMLC-08-2016-0038
       
  • Fake Indian currency racket in Nepal's Terai
    • First page: 262
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose The paper attempts to analyse the trend of trafficking of fake Indian currency notes (FICN), which is organised in nature. It accounts the trend of the smuggling of FICN through the route of Nepal and emerging routes as a consequence of the extension and strength of the criminal gangs. Design/methodology/approach The author utilized the governmental and non-governmental reports besides journalistic reports related to the intention of fake currency trafficking in order to analyse the ground reality and vested interests of such crime. Findings Though open border of Nepal with India is exaggerated as the reason behind the cross-border crime such as smuggling of FICN, the paper has falsified the biased perception of labeling borderline as a crime zone. It finds an outcome of the FICN smuggling that turns the Indo-Nepal border areas as a covert battlefield of organised criminal gangs as well as secret agencies of regional powers. Research limitations/implications Due to ethical issue and limitation of research works in the topic the descriptive analysis could be carried out was limited. Practical implications The negative findings of the crime is implacable in keeping in mind before establishing a good policy related to development and security of Nepal, especially Terai region. Originality/value This study is the latest describing and disclosing the fact behind fake currency trafficking and its consequences.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:30Z
      DOI: 10.1108/JMLC-06-2016-0021
       
  • Factors related to the Central Bank instructions on money laundering
    • First page: 274
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose This paper aims at: (1) investigating Jordan’s framework specifics of anti-money laundering policy; and (2) factors related to the Central Bank instructions on money laundering. Design/methodology/approach A questionnaire has been distributed to a random data of 100 branch bank managers and supervisors who have a sufficient experience in this issue and a t-test statistical technique has been used. Findings The results revealed that commercial banks of Jordan are committed to the instruction of the central bank and they are highly qualified in all investigated measures. Practical implications This study supports the Central Bank of Jordan efforts in combating money laundering, encourage all commercial banks of one country to follow the same adopted regulations in order to identify and report transactions of a suspicious behaviour. Investigate capability of the tellers and customer account representatives to report such activities, use anti-money laundering (AML) software, filter customer’s data; classify available information according to levels of suspicion or based on the uncertain customers without being subject to the institutional secrecy jurisdiction, and to work under cooperative management. Originality/value It has been recommended to utilizing more advanced technology, intensifying training and ensuring for more knowing clients’ knowledge. The importance of this paper is to insure the followings: First, the banking system is obliged to recognize and report suspicious money laundering transactions, regarding up to date the FATFA equivalence status of other countries; second, increase the awareness and ensure the central bank efforts success; third, assure the adequacy of different issues such as the internal control system tools; devices or tools availability, sufficient employees qualifications in facing launderers attempts; fourth, To be sure that suspected transactions are checked against any commercial bank records.; finally, To be sure that commercial banks are giving enough considerations to all the Anti –Money Laundering Proactive actions such as, the regulations of checking opening an account, accepting money on deposit, giving loans, issuing a debit card, traveller’s check and collecting enough information about new clients.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:14Z
      DOI: 10.1108/JMLC-07-2016-0028
       
  • Comprehensive cross-border declaration system as money laundering
           prevention mechanism
    • First page: 292
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose This study aims to discuss on FATF Special Recommendation IX (SR IX) and the importance of complying with the recommendation, which focuses on cross-border declaration or disclosure with the objective to detect and prevent illicit cross-border transportation of cash and bearer negotiable instruments. This study also looks into compliance ratings of APG 40 countries on the FATF Special Recommendation IX. Design/methodology/approach This study reviews the Mutual Evaluation Reports issued by Asia Pacific Group (APG) on Money Laundering from year 2006 until 2012. Based on the Mutual Evaluation Reports, this study also looks into recommendations and comments given by respective panels. The compliance ratings together with panel’s recommendations and comments compiled in this study will be helpful to relevant authorities for future improvement. Findings Complying to FATF Special Recommendation IX helps relevant authorities in detecting and preventing illicit from cross-border transportation of cash and bearer negotiable instruments. Out of 40, only 2 countries received compliant rating, which shows the need of improvement to ensure that the country is compliance on FATF Special Recommendation IX. Research limitations/implications This study is limited to panel’s reviews and recommendations on mutual evaluation report and only focuses on FATF Special Recommendation IX. Originality/value This paper analyzes the compliance characteristics of countries based on their FATF Mutual Evaluation Report. It highlight on the comments and recommendation for future improvement to ensure that these countries will comply with FATF Special Recommendation IX.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:18Z
      DOI: 10.1108/JMLC-02-2016-0008
       
  • Data mining in anti-money laundering field
    • First page: 301
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose This report focuses on how STR is created with data mining methods and utilized from the point of knowledge management. Design/methodology/approach The article considers Data Mining versus knowledge management in the Anti-Money Laundering Field. Findings In the AML field, the information and knowledge gained are not necessarily used for or shared with the related shareholders.Creating and co-evolving the network of ‘knowledge professionals’ is the impending assignment in this industry. The first and most important task is knowledge management in the global Anti-Money Laundering Field. Originality/value The report considers the creation with data mining methods and utilization from the point of knowledge management.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:22Z
      DOI: 10.1108/JMLC-09-2015-0041
       
  • IS – LM model revisited in the perspective of underground economy
    • First page: 311
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 3, July 2017.
      Purpose In the traditional macroeconomic theory, IS – LM model has been treated as an important tool to analyze the dynamics of product and money market where the IS curve represents product market equilibrium condition and the LM curve represents money market equilibrium condition respectively. However, the traditional IS – LM model was formulated by mainly keeping in mind the dynamics of the product and money markets of developed economies. Thus an urgent need was felt to explore the pre – established IS – LM model in the light of existing enormous illicit or underground economies which are prevalent all around the world. Design/methodology/approach In this paper, an exploratory attempt has been made to review the IS – LM model in the light of various illicit practices and by incorporating some assumptions which are relevant to this discussion. In this model, ISil curve could be defined as a locus of points each representing a combination of evaded tax and output of the illicit economy which will keep the illicit economy in equilibrium and, LMil curve could be defined as a locus of points each representing a combination of illicit supply of money and output of the illicit economy which will keep the illicit economy in equilibrium. Findings This paper is aimed at analyzing the traditional IS – LM model from a different perspective in the light of a pervasive underground economy all around the world regardless of the stages of growth and development. A sincere attempt has been made to keep the assumptions simplified and closest to the real world scenario as well as pertinent to the logic of economic theory. In this paper, two major factors of illicit practices, i.e., tax evasion and bribery are given prime importance and our discussion has been concentrated on those two factors of corruption. Originality/value This paper has been prepared keeping in view of the standard technical procedures and findings which are described in the relevant academic materials like textbooks and journal publications which are mentioned under the "References'' column. The analysis and findings as appeared in the article are based on logical explanations and completely free from plagiarism.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-05-23T10:51:04Z
      DOI: 10.1108/JMLC-08-2016-0039
       
  • AML architecture post-Brexit and Trump
    • First page: 102
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.

      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:10:53Z
      DOI: 10.1108/JMLC-01-2017-0003
       
  • Blindingly obvious and frequently exploitable – money laundering through
           the purchasing of high value portable commodities
    • First page: 105
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose The purpose of this paper is to provide an understanding of the openness and specific techniques through which illicit funds generated by criminals are moved, transferred and laundered in the financial arrangement retained using high value portable commodities in the United Kingdom and internationally. Design/methodology/approach This paper presents exploratory findings from research conducted between 2011 and 2013 in the United Kingdom. The research undertaken sought to identify the process, steps, and vulnerabilities behind money laundering via high value portable commodities and highlight the explicit facilitators enabling this method of money laundering to take place. Findings Despite significant research into money laundering typologies, the use of high value portable commodities has remained largely untouched regardless of the increased implementation of anti-money laundering policies and procedures seeking to halt the depositing of illicit cash into the global financial system. This paper demonstrates how high value portable commodities are extremely vulnerable to money laundering despite the large-scale anti money laundering efforts focused on combating money laundering across a broad range of sectors. Research limitations/implications This paper is of value to government policy makers, regulators and financial institutions considering future preventative measures. It is also of value to financial investigators and law enforcement agencies intent on investigating money laundering. While the paper relies on data from the United Kingdom, the overall findings are such that wherever high value portable commodities are present, so too does the opportunity for money laundering through the financial arrangement retained by high value portable commodities. Originality/value This paper presents new research on the direct link between high value portable commodities and money laundering in the United Kingdom despite significant research having previously taken place to identify and develop money laundering typologies.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:00Z
      DOI: 10.1108/JMLC-08-2016-0035
       
  • Earnings management detection over earnings cycles: the financial
           intelligence in Indian Corporate
    • First page: 116
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose It is largely believed that stock pricing is influenced by disclosure of earnings. This motivates the corporate to exercise earnings management practices. The present study aims to analyse and detect the earnings management practices of Indian firms over earnings cycles. The earnings behavior of the firms has been analysed at three levels of earnings cycles for the pricing effect: complete, incomplete, and prospective. In India, the corporate ownership model is Promoter dominated shareholders model (PDSHM) which highlights the relevance of the study for earnings management motivation. This paper contributes by examining earnings management of the units at three levels of earnings cycle with regard to stock pricing. Earnings cycles have been decomposed into three components: complete, incomplete, and prospective. While earnings management has been studied extensively, virtually all studies have focused on firm-specific effects. This study relates earnings management to the cycle of the earnings for stock price effect. Design/methodology/approach The Cash flow model has been used for the computation of accruals (Collins and Hribar, 1999), and DeAngelo model (for calculating discretionary accruals) has been used for detecting earnings management in the present study, being comprehensive in nature and detailed in approach. The results of the ‘complete earnings cycle’ are measured by net income. The results of the ‘incomplete earnings cycle’ are measured by the ratio of gross margin over sales multiplied by inventory. It yields an approximate measure of the unrealized holding gains and losses. The ‘prospective earnings cycle’ stems from the management decision to choose a rate of income growth. Statistical tools have been used for testing the results. These include regression analysis, and descriptive statistics like arithmetic mean, median and standard deviation. Findings An examination of the units shows that firms report more discretionary accruals at complete cycle, i.e. when financial markets are more certain about their future prospects which influence their securities' pricing. It verified that unrealized income and growth prospects have very little role to play in determining returns. The results indicated that each of the components of the earnings cycle has a relevance factor for returns. In complete earnings cycle, DACC had the highest significant on returns than OCF and NDACC. Its determination content is the highest.So, the firms report more negative discretionary accruals when financial markets are less certain about their future prospects. Stock-price responses to earnings surprises are moderated when firm-level uncertainty is high, consistent with performance being attributed more to chance rather than performance. Research limitations/implications The present study could be confined to only top twelve profit-making corporate enterprises in the private sector in India, leaving all other enterprises due to data non-availability. Out of 25 enterprises, there were PSUs too which had to be excluded. The time period in the study is of five years (2003-4 to 2007-08) to highlight earnings management motivation. This period is best suited to identify the effects of global recession on the practice of earnings management in India. Researchers may like to select a different time-period based on their perspective. Practical implications It is hoped that the study would improve the understanding of the manner in which the capital markets process the publicly available earnings and its components for global firms. The findings of this study are significant not only for organisations that function in India but also for other companies that are based in economies with relatively mature corporate governance mechanisms. So, our findings have important policy implications for the western world, as the sample companies are multinationals and operate globally. Similar efforts in other countries in would be rewarding in controlling the management of reported earnings and enhance the reliability and transparency of reported earnings in order to promote economic efficiency. Originality/value It is an original article which highlights the earnings behaviour and its motivation in Indian corporate enterprises for earnings cycles with regard to stock pricing.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:08Z
      DOI: 10.1108/JMLC-06-2016-0023
       
  • Twelve methods of money laundering
    • First page: 130
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose This article discusses how feasible it is for intelligent criminals to circumvent existing anti–money laundering mechanisms. Design/methodology/approach Based upon ten informal interviews with money launderers and their advisers; eighteen formal, semi-standardized expert interviews with selected anti–money laundering specialists; and a quantitative survey of 181 compliance officers, twelve effective methods to launder money have been developed. Findings It has been found that gold, jewellery, raw diamonds, antiquities, art, real estate projects, consulting firms, mergers and acquisitions, banks in Dubai, deposit boxes, private cash deals and currency exchange offices continue to be extraordinarily suitable tools for money laundering. Originality/value The identification of gaps in anti–money laundering mechanisms is meant to provide both compliance officers and legislators with valuable insights. Whilst the existing literature focuses on estimating the volume of money laundered in certain geographical areas and on the improvement of anti–money laundering mechanisms, this article describes how money launderers proceed in order to avoid getting caught.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:03Z
      DOI: 10.1108/JMLC-05-2016-0018
       
  • Money laundering, lawyers and president's intervention in Zimbabwe
    • First page: 138
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose This article analyses the effects of the Presidential Powers (Temporal Measures), amendment to the Money Laundering and Proceeds of Crime Act to include legal practitioners under the list of designated non-financial business and professions (DNFBP) Design/methodology/approach The article is a textual analysis of anti-money laundering legislation (AML legislation) within the context of legal practice in Zimbabwe. Findings The amendment put Zimbabwe on the international standard in the fight against money laundering, as legal practitioners have become a soft target for money laundering. Despite its noble aim, in Zimbabwe there is anecdotal evidence that AML legislation turns lawyers into watchdogs or law enforcement agents. On the contrary, the amendment prevents lawyers from falling to the mercy of organised criminals and money launderers. Furthermore, there is a dearth of empirical research that can demystify the impact of some of the provisions of this law on contested issues, such as legal professional privilege. Research limitations/implications The research aims to outline the rationale for anti-money laundering policy and law. It will analyse how the issue has been approached in other jurisdictions such as England and Wales. The paper will then try to establish coherent principles in the prevention of money laundering. It will also suggest a number of recommendations as to how Zimbabwe could approach some of the issues while still considering the need to balance competing influences of legal privilege and money laundering regulations. Practical implications The paper will bring this issue to the fore and initiate an informed debate, as well as providing practical talking points for legal practitioners to embrace the AML regime and to engage policymakers on the issues that need reform. Originality/value The paper provides the first in depth analysis of the money laundering legislation in the legal fraternity in Zimbabwe and goes to offer practical tips and entry points on the application of the regulations or for advocacy towards any reform as might be needed.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:02Z
      DOI: 10.1108/JMLC-01-2016-0004
       
  • Asset recovery: a Swiss leap forward?
    • First page: 150
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose International asset recovery proceedings may be hindered by several obstacles, especially in the case of “failed states” or of states that experience a regime change. In this context, Switzerland, a country with extensive experience in asset recovery, attempted two legislative leaps forward, the first in 2011 and the second in 2016. The purpose of this paper is to critically examine the legislative innovations in Switzerland, with special reference to their strengths, weakness and compatibility with human rights standards. Design/methodology/approach This paper draws on legal scholarship, jurisprudence, reports and other open source data, in order to analyze two important legislative innovations in Switzerland (LRAI and LVP). Findings The two Swiss legislative initiatives that will be examined (LRAI and LVP) are innovative in nature, but serious weaknesses and obstacles to asset recovery remain unaddressed. Despite their flaws, these two legislative innovations can inspire positive change in international and national norms. They can be viewed as part of a work-in-progress for the reinforcement of asset recovery proceedings and international cooperation in this domain. Originality/value Since the new law on asset recovery (LVP) came into force (July 1st 2016), this has been the first study examining the strengths and weaknesses of the adopted text, its compatibility with human rights standards and its potential influence on international standards of asset recovery.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:05Z
      DOI: 10.1108/JMLC-06-2016-0024
       
  • Well funded and dangerous: assessing the Islamic State's financing
           operations
    • First page: 159
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose The existing literature on ISIS has thus far focused on the group's contemporary or previous financing activities. However, there has not been an analysis of the ways in which ISIS' funding is likely to change moving forward now that it has come under international scrutiny. The purpose of this article is to assess the ways in which ISIS' funding is likely to evolve in the future, and to also suggest methods for combating its financing activities. Design/methodology/approach The paper is theoretical in nature. By assessing the existing literature on terrorist financing, it is apparent that terrorist organizations alter their funding sources and methods after coming under intense international scrutiny. Therefore, two hypotheses are put forth for the future of ISIS' funding activities: 1) the group will become more effective at building social support among its local population; thereby consolidating is funding sources and methods within Syria and Iraq; and 2) the group will increasingly branch out, searching for sources from a transnational network as its base in Syria and Iraq begins to deteriorate. Findings Community support is essential for sustaining a terrorist network. As a result, it is likely that ISIS will increasingly seek funding from a transnational network as its base of support in Iraq and Syria begins to deteriorate. There is also a distinct third possibility that the group will be able to consolidate its base while also moving abroad for financial support. This third option presents the most complicated outcome for the international community in its fight against ISIS. Originality/value This study fills a gap in the literature on terrorist financing, particularly with regards to ISIS, in order to assist the international community in its fight against the group both now and moving into the future.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:10:56Z
      DOI: 10.1108/JMLC-07-2016-0026
       
  • Tracking digital footprints: anonymity within the bitcoin system
    • First page: 172
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose The purpose of this paper is to critically analyse research surrounding the anonymity of online transactions using Bitcoin, and report on the feasibility of law enforcement bodies tracing illicit transactions back to a user’s real life identity Design/methodology/approach The design of this paper follows on from the approach taken by Reid and Harrigan (2013) in determining whether identifying information may be collated with external sources of data to identify individual users. In addition to conducting a detailed literature review surrounding the anonymity of users and the potential ability to track transactions through the blockchain, four Bitcoin exchange services are examined to ascertain whether information provided at the sign-up stage is sufficiently verified and reliable. By doing so, this research tests the ability for law enforcement to reasonably rely upon this information when attempting to prosecute individuals. Additionally, by submitting fake information for verification, the plausibility of these forms of services accepting fraudulent or illegitimate information is also tested. Findings It may be possible to identify and prosecute bad actors through the analysis of transaction histories tracing back to an interaction with a Bitcoin exchange. However, the compliance and implementation of anti-money laundering legislation and customer identification security standards are insufficiently utilised within some exchange services, resulting in more technologically adept, or well-funded, criminals being able to circumvent identification controls and continue to transact without revealing their identities. The introduction of and compliance with know-your customer and customer due diligence legislation is required before law enforcement bodies may be able to accurately rely on information provided to a Bitcoin exchange. This paper highlights the need for research to be undertaken to examine the ways in which criminals are circumventing identity controls and, consequently, financing their illicit activities. Originality/value By ascertaining the types of information submitted by users when exchanging real currency for virtual currency, and seeing whether this information may be accepted despite being fraudulent in nature, this paper elucidates the reliability of information that law enforcement bodies may be able to access when tracing transactions back to an individual actor.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:01Z
      DOI: 10.1108/JMLC-07-2016-0027
       
  • Autoregressive-based outlier algorithm to detect money laundering
           activities
    • First page: 190
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose This paper proposes the Autoregressive-based Outlier algorithm to reduce the computational complexity in the detection of ML activities (AROMLD). Design/methodology/approach This paper proposes the Autoregressive-based Outlier algorithm to reduce the computational complexity in the detection of ML activities (AROMLD). Findings This paper proposes the Autoregressive-based Outlier algorithm to reduce the computational complexity in the detection of ML activities (AROMLD). Research limitations/implications This paper proposes the Autoregressive-based Outlier algorithm to reduce the computational complexity in the detection of ML activities (AROMLD). Practical implications This paper proposes the Autoregressive-based Outlier algorithm to reduce the computational complexity in the detection of ML activities (AROMLD). Originality/value This paper proposes the Autoregressive-based Outlier algorithm to reduce the computational complexity in the detection of ML activities (AROMLD).
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:11:06Z
      DOI: 10.1108/JMLC-07-2016-0031
       
  • Prosecution for illicit enrichment: the Lithuanian perspective
    • First page: 203
      Abstract: Journal of Money Laundering Control, Volume 20, Issue 2, May 2017.
      Purpose This paper presents and analyses the issues with which Lithuania is faced through its introduction of a modern legal mechanism for a more efficient confiscation of the proceeds of crime – the criminalization of illicit enrichment. Design/methodology/approach The paper analyses issues raised in the Constitutional Court of Lithuania concerning the constitutionality of the country’s Criminal Code, as amended, by means of which illicit enrichment has been criminalized. Then, developments in and statistics for prosecutions and convictions for illicit enrichment are presented and the legal issues that have been raised in the practice of the higher courts of Lithuania are analysed. Findings The concept of the criminalization of illicit enrichment proves to be less promising than that of civil forfeiture. First, it is contentious in the context of proportionality and ultima ratio. Second, it may infringe upon the prohibition of self-incrimination. Third, it appears that collecting sufficient evidence of illicit enrichment on the criminal standard of proof is an extremely difficult task for the prosecution. Originality/value Lithuania was the first EU Member State to introduce general criminal liability for illicit enrichment. This analysis of the five years since the implementation of the enabling legislation should provide useful insights for the other countries considering introducing modern legal instruments to bring about a more effective control of illicit enrichment, as well as inspire additional, vital deliberation on the matter.
      Citation: Journal of Money Laundering Control
      PubDate: 2017-03-15T12:10:57Z
      DOI: 10.1108/JMLC-07-2016-0029
       
 
 
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