Abstract
Financial crime threatens the credibility and efficiency of systems and the stability of countries. Countering it requires concerted and collaborative efforts and strategic partnership between the public and private sectors. This paper discusses the roles of the private sector and challenges of compliance with acceptable international standards against money laundering and terrorist financing. The paper suggests that most of challenges, especially with regard to the reporting of suspicious transactions have almost been overcome, yet, there other challenges that remain. It concludes by making recommendations to address those challenges and improving the efficiency of the financial system.
Highlights
This paper seeks to improve understanding of the challenges of ensuring compliance by officials of private sector entities in the developing world with global standards against serious financial crimes
The vigilance and proactivity of compliance officers in reporting business entities would make it difficult for criminals to launder the financial proceeds of illicit activities. Professionals such as accountants and lawyers working to protect the businesses of their clients have an indispensible role to play in ensuring that the business activities of their principals do not breach national and international standards, laws and regulations against financial crimes, such as money laundering (ML) and terrorist financing (TF), as well as their predicate crimes
That is the more reason why enforcing the Risk-Based Approach (RBA) adopted by the Financial Actin Task Force (FATF) in anti-money laundering (AML)/counter-financing of terrorism (CFT) should be proportionately based on the recognition of the peculiar circumstances of low capacity countries
Summary
This paper seeks to improve understanding of the challenges of ensuring compliance by officials of private sector entities in the developing world with global standards against serious financial crimes. Professionals such as accountants and lawyers working to protect the businesses of their clients have an indispensible role to play in ensuring that the business activities of their principals do not breach national and international standards, laws and regulations against financial crimes, such as money laundering (ML) and terrorist financing (TF), as well as their predicate crimes In spite of this recognition, financial crimes have continued to occur through the private sector (involving officials in the public sector in many cases), revealing flaws in the compliance systems of business organisations, as evidenced in recent high-profile scandals involving powerful multinational businesses around the world. That is the more reason why enforcing the Risk-Based Approach (RBA) adopted by the Financial Actin Task Force (FATF) in AML/CFT should be proportionately based on the recognition of the peculiar circumstances of low capacity countries
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