Journal of Money Laundering Control

Chitimira, Howard; Animashaun, Oyesola

2023 Journal of Money Laundering Control

doi: 10.1108/jmlc-12-2022-0171

Banditry and terrorism constitute serious security risks in Nigeria. This follows the fact that Nigeria is rated as one of the leading states in the world that is plagued by terrorism. Terrorists and bandits usually embark on predicate crimes such as kidnapping, smuggling, narcotics trade, and similar trades to finance their terrorist enterprises in Nigeria. The funds realized by criminals from nefarious sources such as sales of narcotics and ransom from kidnapping are usually laundered to make their criminal enterprises self-sustaining. Thus, all “dirty” money is laundered so as not to attract the attention of law enforcement agents. The funds realized through receipt of ransom from kidnapping, smuggling or funds from sponsors are laundered through channels such as bureau de change, which are difficult to monitor by the Nigerian authorities due, in part, to flaws and loopholes in the current anti-money laundering and anti-terrorist laws. This paper aims to adopt a doctrinal and qualitative desktop research methodology. In this regard, the current anti-money laundering and anti-terrorist laws are discussed to explore possible measures that could be adopted to remedy the flaws and loopholes in such laws and combat money laundering and financing of terrorism in Nigeria.Design/methodology/approachThe article analyses the regulation and combating of money laundering and terrorist financing activities in Nigeria. In this regard, a doctrinal and qualitative research method is used to explore the flaws in the Nigerian anti-money laundering laws so as to recommend possible remedies in respect thereof.FindingsIt is hoped that policymakers and other relevant persons will use the recommendations provided in this article to enhance the curbing of money laundering and terrorist financing activities in Nigeria.Research limitations/implicationsThe article is not based on empirical research.Practical implicationsThis study is important and vital to all policymakers, lawyers, law students and regulatory bodies in Nigeria and other countries globally.Social implicationsThe study seeks to curb money laundering and terrorist financing activities in Nigeria.Originality/valueThe study is based on original research which is focused on the regulation and combating of money laundering and terrorist financing activities in Nigeria.

Chitimira, Howard; Munedzi, Sharon

2023 Journal of Money Laundering Control

doi: 10.1108/jmlc-01-2023-0004

Customer due diligence measures that are employed in the United Kingdom (UK) to detect and combat money laundering are discussed. The UK adopted a progressive regulatory and enforcement framework to combat money laundering which relies, inter alia, on the use of customer due diligence measures to regulate and curb the occurrence of money laundering activities in its financial institutions and financial markets. However, other regulatory measures that could have contributed to the effective combating money laundering in the UK will not be explored in detail since the article is focused on the reliance and use of customer due diligence measures to curb money laundering activities. Accordingly, the strength, flaws and weaknesses of the UK anti-money laundering regulatory and enforcement framework are examined. Lastly, possible recommendations to address such flaws and weaknesses are provided.Design/methodology/approachThe paper discusses customer due diligence measures that are used in the UK to detect and combat money laundering.FindingsIt is hoped that policymakers and other relevant persons will use the recommendations provided in the paper to enhance the curbing of money laundering in the UK.Research limitations/implicationsThe paper does not provide empirical research.Practical implicationsThe study is useful to all policymakers, lawyers, law students and regulatory bodies in the UK.Social implicationsThe study seeks to curb money laundering in the UK society globally.Originality/valueThe study is original research on the use of customer due diligence measures to detect and combat money laundering in the UK.

Chitimira, Howard; Munedzi, Sharon

2023 Journal of Money Laundering Control

doi: 10.1108/jmlc-01-2023-0016

This paper explores the historical aspects of customer due diligence and related anti-money laundering measures in South Africa. Customer due diligence measures are usually employed to ensure that financial institutions know their customers well by assessing them against the possible risks they might pose such as fraud, money laundering, Ponzi schemes and terrorist financing. Accordingly, customer due diligence measures enable banks and other financial institutions to assess their customers before they conclude any transactions with them. Customer due diligence measures that are utilised in South Africa include identification and verification of customer identity, keeping records of transactions concluded between customers and financial institutions, ongoing monitoring of customer account activities, reporting unusual and suspicious transactions and risk assessment programmes. The Financial Intelligence Centre Act 38 of 2001 (FICA) as amended by the Financial Intelligence Centre Amendment Act 1 of 2017 (Amendment Act) is the primary statute that provides for the adoption and use of customer due diligence measures to detect and combat money laundering in South Africa. Prior to the enactment of the FICA, several other statutes were enacted in a bid to prohibit money laundering in South Africa. Against this background, the article provides a historical overview analysis of these statutes to, inter alia, explore their adequacy and examine whether they consistently complied with the Financial Action Task Force Recommendations on the regulation of money laundering.Design/methodology/approachThe paper provides an overview analysis of the historical aspects of the regulation and use of customer due diligence to combat money laundering in South Africa. In this regard, a qualitative research method as well as the doctrinal research method are used.FindingsIt is hoped that policymakers and other relevant persons will adopt the recommendations provided in the paper to enhance the curbing of money laundering in South Africa.Research limitations/implicationsThe paper does not provide empirical research.Practical implicationsThe paper is useful to all policymakers, lawyers, law students and regulatory bodies, especially, in South Africa.Social implicationsThe paper advocates for the use of customer due diligence measures to curb money laundering in the South African financial markets and financial institutions.Originality/valueThe paper is original research on the South African anti-money laundering regime and the use of customer due diligence measures to curb money laundering in South Africa.

Pavlidis, Georgios

2023 Journal of Money Laundering Control

doi: 10.1108/jmlc-03-2023-0050

This paper aims to critically examine the digital transformation of anti-money laundering (AML) and countering the financing of terrorism (CFT) in light of the Financial Action Task Force (FATF) San Jose principles, the Organisation for Economic Co-operation and Development (OECD) principles for artificial intelligence (AI) and the proposed European Union (EU) Artificial Intelligence Act. The authors argue that AI tools can revolutionize AML/CFT and asset recovery, but there is a need to strike a balance between optimizing AML efficiency and safeguarding fundamental rights.Design/methodology/approachThis paper draws on reports, legislation, legal scholarships and other open-source data on the digital transformation of AML/CFT, particularly the deployment of AI in this context.FindingsA new regulatory framework with robust safeguards is necessary to mitigate the risks associated with the use of new technologies in the AML context.Originality/valueThis study is one of the first to examine the use of AI in the AML/CFT context in light of the FATF San Jose principles, the OECD AI principles and the proposed EU AI Act.

Keskitalo, Kristian; Väyrynen, Jaakko

2023 Journal of Money Laundering Control

doi: 10.1108/jmlc-12-2022-0168

This paper aims to analyse the virtual currency regulation especially in Finland, Sweden and Norway. Different member states had a bit differently incorporated regulation of AMLD5. Finland has gone the furthest in regulation and even issuers of virtual currency are under the Finnish regulation.Design/methodology/approachIn one hand, the study approach is legal dogmatics, but in other hand it is comparative legal research. Both approaches can be found in this paper.FindingsThe EEA is going from a more fragmented regulatory landscape based on 5th Anti-Money Laundering Directive to a more uniform regulatory approach provided by a legislative package that regulates crypto assets more broadly, coupled with an overhaul of the anti-money laundering rules, bringing them into a single European rulebook. Finland has taken a step further in this matter. Therefore, it would be reasonable for the AMLD5 scope to be expanded in this respect. It is a welcome development that the regulation will be unified and that investor protection will be better taken into account in the future as well.Originality/valueThis paper gives a picture of what kind of challenges is there in Fennoscandic in terms of money laundering regulation of virtual currencies. On the other hand, this paper brings into the discussion the rather clever solutions of Fennoscandic (especially Finland) regarding money laundering of virtual currencies.

Lupton, Cayle

2023 Journal of Money Laundering Control

doi: 10.1108/jmlc-06-2023-0105

Illegal wildlife trade (IWT) is a transnational organized crime that generates billions in criminal proceeds each year. Yet, it is not regarded by many countries as a serious crime. There is also no general consensus on its recognition as a predicate offence for money laundering. In this regard, banks are misused in different ways to facilitate financial flows linked to IWT. This paper aims to illustrate the importance of the banking sector in combating money laundering relating to IWT. It also aims to demonstrate the need for a general recognition of IWT as a predicate offence for money laundering.Design/methodology/approachThis study investigates the implementation of money laundering controls by banks in the illegal-wildlife-trade context. As background to this investigation, it provides an overview of IWT, which is followed by an exploration of some of the general characteristics of the banking sector, before discussing the relevant Financial Action Task Force (FATF) recommendations.FindingsThis study finds that the banking sector is well-placed to combat money laundering relating to the IWT and is, by virtue of its international nature and strong focus on compliance, able to be effective in preventing the use of the proceeds of IWT as well as in identifying broader trafficking networks. Moreover, the banking sector is well-equipped to develop appropriate platforms to facilitate the swift, easy and effective sharing of financial intelligence between banks at the local, regional and especially international level.Research limitations/implicationsThis study draws on publicly available information on financial flows relating to IWT. Little data and research are available on the financial flows and consequently the money laundering techniques used in cases suspected of IWT.Originality/valueThere has been little scholarly research on the relationship between money laundering and the IWT as well as the financial flows of IWT in general. This study highlights some of the money laundering techniques used in relation to IWT by drawing on the works of various international organizations, including the FATF.