Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The 1MDB case and the Swiss banking sector

The 1MDB case and the Swiss banking sector This case study highlights why and how the Swiss banking sector played a crucial role in the 1Malaysia Development Berhad (1MDB) corruption scandal. In particular, the paper illustrates how different actors in the Swiss financial sector neglected compliance guidelines and due diligence, thus effectively facilitating the laundering of misappropriated 1MDB funds. The purpose of this paper is to give bankers and compliance officers an overview of the methods money launderers use to circumvent compliance measures so that the Swiss banking sector can be protected more effectively from abuse. In addition, there is discussion whether current regulations, including banking secrecy, should be amended.Design/methodology/approachThis paper used a content analysis methodological approach to collect data from media sources. Qualitative methods were used to analyze these sources.FindingsThe findings reveal that the Swiss banking sector played a major role in facilitating the siphoning and subsequent laundering of 1MDB funds by neglecting due diligence obligations.Practical implicationsThis paper advocates a more consequential implementation of the existing anti-money laundering and corruption regulations.Social implicationsA reworking of the 1MDB scandal should be of interest to compliance professionals in the banking sector and citizens that have been negatively affected or are concerned by the involved high-level corruption.Originality/valueThis paper is the first of its kind to study the role of the Swiss banking sector in the 1MDB scandal. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Money Laundering Control Emerald Publishing

The 1MDB case and the Swiss banking sector

Download PDF
13 pages

Loading next page...
 
/lp/emerald-publishing/the-1mdb-case-and-the-swiss-banking-sector-drAC5OP3J6
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1368-5201
eISSN
1368-5201
DOI
10.1108/jmlc-04-2020-0037
Publisher site
See Article on Publisher Site

Abstract

This case study highlights why and how the Swiss banking sector played a crucial role in the 1Malaysia Development Berhad (1MDB) corruption scandal. In particular, the paper illustrates how different actors in the Swiss financial sector neglected compliance guidelines and due diligence, thus effectively facilitating the laundering of misappropriated 1MDB funds. The purpose of this paper is to give bankers and compliance officers an overview of the methods money launderers use to circumvent compliance measures so that the Swiss banking sector can be protected more effectively from abuse. In addition, there is discussion whether current regulations, including banking secrecy, should be amended.Design/methodology/approachThis paper used a content analysis methodological approach to collect data from media sources. Qualitative methods were used to analyze these sources.FindingsThe findings reveal that the Swiss banking sector played a major role in facilitating the siphoning and subsequent laundering of 1MDB funds by neglecting due diligence obligations.Practical implicationsThis paper advocates a more consequential implementation of the existing anti-money laundering and corruption regulations.Social implicationsA reworking of the 1MDB scandal should be of interest to compliance professionals in the banking sector and citizens that have been negatively affected or are concerned by the involved high-level corruption.Originality/valueThis paper is the first of its kind to study the role of the Swiss banking sector in the 1MDB scandal.

Journal

Journal of Money Laundering Control – Emerald Publishing

Published: Jul 31, 2021

Keywords: Corruption; Due diligence; Money laundering; Swiss banking; 1MDB; Jho low; Money laundering; Najib Razak; Banca della Svizzera Italiana (BSI); Banking secrecy; Goldman Sachs; Switzerland

References

  • 1MDB: Brisante fakten aus dem geständnis eines BSI-Bankers
    Bart, K.
  • Ritualisation and money laundering in the Swiss banking sector
    Carlin, A.; Lokanan, M.E.
  • Corruption, money laundering, secrecy and societal responsibility of banks
    Carr, I.M.; Jago, R.
  • US delays returning more 1MDB funds to Malaysia, sources say
  • The man at the top
  • Fatal broadside: the demise of Caribbean offshore financial confidentiality post USA patriot act
    Dowling, G.S.
  • La confession de Xavier Justo: «J’ai trahi
    Dubus, A.
  • 1MDB: Der Wegweiser zum Skandal
  • 1MDB-Skandal: Mittendrin ein Hollywood-Star
  • Geldwäscherei: Jetzt müssen die Schweizer Banken zittern
  • FINMA-Jahreskonferenz 2016: Geldwäschereirisiken im fokus der aufsicht
  • FINMA sanktioniert coutts betreffend 1MDB
  • 1MDB-Skandal zieht immer weitere kreise
    Herb, E.
  • Who’s responsible for 1MDB? Jho low left me to face music alone, Najib laments
    Jun, S.W.
  • The reporting on the 1Malaysia development Berhad (1mdb) crisis and implications on the efficacy of economic and financial news reporting in Malaysia
    Nazmi, S.; Rahim, M.H.A.
  • Malaysia says Saudis gave prime minister Najib Razak a $681 million ‘donation’
    Ngui, Y.; Wright, T.
  • Deutsche bank cleared Cyprus funds for businessman Jho low
    Peel, M.; Storbeck, O.
  • Swiss banking confidentiality: perceptions vs reality
    Peppas, S.C.
  • Bank secrecy in Israel. The comparative law yearbook of international business
    Plato-Shinar, R.
  • Corruption currents: Saudi money backs Taliban as king backs Afghan government
    Rubenfeld, S.
  • HEIST OF THE CENTURY – How Jho Low used PetroSaudi as ‘a front’ to siphon billions out of 1MDB!
  • Geldwäscherei: Abfuhr für ueli maurer im nationalrat
    Schöchli, H.
  • MAS imposes lifetime ban on former Goldman banker
    Sen, N.J.
  • Bundesgesetz vom 10. Oktober 1997 über die bekämpfung der geldwäscherei und der terrorismusfinanzierung (geldwäschereigesetz, GwG), änderungen
  • Goldman pleads not guilty in Malysia 1MDB case
  • Malaysia recovers $322 million in stolen 1MDB money: govt
  • Assistant Attorney General Leslie R. Caldwell delivers remarks at press conference announcing significant kleptocracy enforcement to recover more than $1 billion obtained from corruption involving Malaysian sovereign wealth fund
  • International Narcotics Control Strategy Report, Volume II: Money Laundering (March 2019)
  • Inside Miranda Kerr’s romance with an accused money launderer that resulted in her handing $8 million in jewelry over to the government
    Wright, T.; Hope, B.
  • The exploitation of offshore financial centres: banking confidentiality and money laundering
    Young, M.A.