How effective are suspicious transaction reporting systems?

How effective are suspicious transaction reporting systems? Purpose – A fundamental element of international anti‐money laundering (AML) systems is the requirement that financial institutions file suspicious transaction reports (STRs) with financial intelligence units. Although the Financial Action Task Force (FATF) has established global standards, there is a range of national laws, practices and experiences with STR systems. The purpose of this paper is to assess the effectiveness of national STR systems, by using Switzerland as a case study. Design/methodology/approach – Primary source documentation, complemented by observations at FATF meetings, are relied on to evaluate STR systems. Findings – The FATF ratings of a country's compliance with international standards are objective, expert driven and consistent in application, but are limited as performance measures in that they ignore the costs of AML and STR measures. The effectiveness of the Swiss STR system is questionable because of serious under reporting of suspicious transactions. The Swiss STR system is efficient to the extent that there is a high usage of STRs and that large amounts of money are automatically frozen under the mandatory reporting obligation. Research limitations/implications – Evaluation of national STR systems is limited because of a lack of reliable statistics on the extent of money laundering. Practical implications – This paper is addressed to policy makers who are concerned with assessing the effectiveness of STR systems. Future research would deal with STR systems in developing countries and the role of STRs in uncovering the financing of terrorism. Originality/value – Insider/outsider description of the FATF mutual evaluation process. Compilation and interpretation of statistical data on STR systems, as performance measures. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Money Laundering Control Emerald Publishing

How effective are suspicious transaction reporting systems?

Journal of Money Laundering Control, Volume 12 (3): 16 – Aug 7, 2009

Loading next page...
 
/lp/emerald-publishing/how-effective-are-suspicious-transaction-reporting-systems-5UJSb3aTll
Publisher
Emerald Publishing
Copyright
Copyright © 2009 Emerald Group Publishing Limited. All rights reserved.
ISSN
1368-5201
DOI
10.1108/13685200910973628
Publisher site
See Article on Publisher Site

Abstract

Purpose – A fundamental element of international anti‐money laundering (AML) systems is the requirement that financial institutions file suspicious transaction reports (STRs) with financial intelligence units. Although the Financial Action Task Force (FATF) has established global standards, there is a range of national laws, practices and experiences with STR systems. The purpose of this paper is to assess the effectiveness of national STR systems, by using Switzerland as a case study. Design/methodology/approach – Primary source documentation, complemented by observations at FATF meetings, are relied on to evaluate STR systems. Findings – The FATF ratings of a country's compliance with international standards are objective, expert driven and consistent in application, but are limited as performance measures in that they ignore the costs of AML and STR measures. The effectiveness of the Swiss STR system is questionable because of serious under reporting of suspicious transactions. The Swiss STR system is efficient to the extent that there is a high usage of STRs and that large amounts of money are automatically frozen under the mandatory reporting obligation. Research limitations/implications – Evaluation of national STR systems is limited because of a lack of reliable statistics on the extent of money laundering. Practical implications – This paper is addressed to policy makers who are concerned with assessing the effectiveness of STR systems. Future research would deal with STR systems in developing countries and the role of STRs in uncovering the financing of terrorism. Originality/value – Insider/outsider description of the FATF mutual evaluation process. Compilation and interpretation of statistical data on STR systems, as performance measures.

Journal

Journal of Money Laundering ControlEmerald Publishing

Published: Aug 7, 2009

Keywords: Disclosure; Money laundering; International cooperation; Switzerland

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off