The Final Frontier of the ‘Crime Does Not Pay’ Principle in EU Law: Managing Frozen and Confiscated Assets

EU legislation in the field of financial and organised crime is affected by different issues. The anti-money laundering (and counter-terrorist financing) legislation is dense, but it still lacks effectiveness. Although the approximation between the Member States still presents some concerns, what seems to be desirable is not further legislative intervention from the EU but to foster monitoring activities (on criminal law usage, suspicious transaction reports, and FIU functioning, etc.). In this context, a specialised agency could be of remarkable value, but the corresponding draft needs accurate analysis. With regard to organised crime, FD 2008/841/JHA features too narrow a scope, on the one hand, when it requires the aim of obtaining “financial or other material benefit.” On the other hand, the EU definitions on the matter are too broad (e.g., as to what concerns participation in a criminal organisation). A more specific set of autonomous definitions oriented towards the specific forms of crime that criminal organisations aim their activities at would considerably enhance and facilitate judicial cooperation. In this regard, not only a review of the broad EU definitions is encouraged, but the FD itself should be quickly replaced. The current EU legal framework on corruption in both the public and private sectors also seems outdated, notwithstanding the pivotal role of such matters on EU criminal policy. Although EU law already provides for a duty to criminalise corruption in the private sector, it does not sufficiently clarify the object of protection, i.e., “fair competition.” This enables possible national transpositions that may thwart the utility of the relevant criminalising provisions. In addition, a definition of EU officials in EU law is desirable as well as the introduction of corruption-related crimes concerning such subjects in the Euro-crimes list.

Financial Crime Prevention and Control: The Reforms of a ‘Unique’ Jurisdiction under EU Law and International Standards Between 2011 and 2014, the Vatican City State (VCS) experienced a reform process which dramatically changed its financial system. The process is still ongoing, and its goal is to establish an anti-money laundering and counter-terrorism financing (AML/CTF) system. Importantly, this system will be based on the AML/CTF EU legislation and international standards. These facts are noteworthy. First, the reforms cast light on the main Vatican financial institutions against the background of the secrecy that has always characterized their functioning and business operations. Accordingly, there is now more transparency and information about the Vatican financial system. Second, the relevant EU law and international standards are tools through which the VCS can, for the first time, join an international network of countries, sharing and applying the same rules against money laundering (ML) and terrorist financing (TF). This is of extraordinary importance for a jurisdiction like the VCS, which has never referred to European or international principles in its rule-making. In particular, the openness to EU law and international standards stimulates investigating the reasons behind these changes and the impact that these sources of law are having on a jurisdiction regarded as ‘unique’ in the world.

This chapter examines the UK policy aimed at combating money laundering and financial crime. It first explains what constitutes money laundering under the October 2004 UK anti-money laundering (AML) policy document, the Terrorism Act 2000 and the Proceeds of Crime Act 2002 (PoCA). It then considers the UK government's Action Plan for Anti-Money Laundering and Counter-Terrorist Finance, along with the relevant provisions of the Financial Services and Markets Act 2000 (FSMA). It also describes the policy backdrop for the UK's fight against money laundering and the international nature of this campaign, the role of the Financial Action Task Force in the fight against money laundering, the European Union's four Money Laundering Directives, the Wire Transfer Regulation, PoCA, Money Laundering Regulations 2007, and the Financial Conduct Authority's (FCA) rules relating to AML. The chapter concludes with an analysis of the Joint Money Laundering Steering Group Guidance.

Purpose – The purpose of this paper is to examine the impact of the Jordanian anti-money laundering law and its instructions on the Jordanian banking industry. The anti-money laundering law in Jordan is newly enacted, but there are new developments not covered by the law. For instance, the revolutionary wave known as the Arab Spring surrounding Jordan has increased the crime rates in Jordan, and it has also reduced international coordination and cooperation to encounter money laundering operations. The emergence of new means for money transfer is affecting the efficiency and speed of bank transfers. Subsequently, the impact of the law on Jordanian banks is unknown. Design/methodology/approach – This paper relies on the Jordanian Anti-Money Laundering and Counter Terrorist Financing Law 2007 as a primary source of information. The relevant Jordanian anti-money laundering instructions that have directly been affecting banks include the Jordanian Anti Money Laundering and Counter Terrorist Financing Instructions Number (51) 2010. These instructions were considered the most important legislation for the purpose of this paper. Findings – While the Jordanian anti-money laundering law is based on certain principles, the effectiveness of the law is unknown. The Arab Spring, particularly the Syrian revolution, has negatively increased the crime rates and money laundering activities in Jordan. To make matters worse, the international cooperation and coordination between countries in combating money laundering are not at the required level, and this has encouraged money laundering groups to exploit the situation. Only time will tell whether the banks will be able to cope sufficiently with the increased anti-money laundering obligations. Obviously, it is critical at this stage to establish effective coordination between legislators, regulators and the banking industry to minimize problems encountered by the banks, thereby to ensure effective implementation of the law. Originality/value – This paper provides an examination of the impact of the Jordanian anti-money laundering law that has directly affected banks. It is hoped that this paper would provide some insight into this particular area for academics, practitioners, the legal advisers, banks and policy-makers not only in Jordan but also elsewhere. In view of the international nature of money laundering and banking, there will be significant interest in how the anti-money laundering law affects banks operation in Jordan.

PurposeThe purpose of this paper is to examine – using crime script analysis – the practical effectiveness of internationally endorsed and universally recognised counter-terrorism financing (CTF) standards in preventing the movement of money for the purposes of terrorism. The paper does not seek to examine the originating circumstances of terrorist finances or how laundered value is assigned.Design/methodology/approachPreliminary evaluation focuses on the discrepancies between the practices of money laundering and terrorist financing. Following an introduction to crime scripts, internationally endorsed anti money laundering (AML)/CTF practices are discussed to identify the process used to trace, prevent and limit money laundering and terrorist financing. Several terrorist financing case studies are then aligned to the process of crime script analysis to determine whether existing AML/CTF practices are effective in preventing terrorist financing.FindingsThe AML model “Placement, layering, integration” is only relevant to CTF in the comparatively rare cases when the origin of the money is crime. This creates a false sense of security through over reliance on AML/CTF for CTF purposes. A crime script approach can be applied to terrorist finance, but it is currently hindered by insufficient reporting of low level financing of terrorists, their addresses and associates. Law enforcement make insufficient use of financial intelligence – as a routine practice – in their crime and terrorist investigations; they have not adopted parallel investigation as a routine approach and consequently remain largely unconnected with the AML/CTF regime.Practical implicationsUtilising terrorist financing case studies, this paper identifies that existing AML/CTF international standards and practices are not adequate for controlling the movement of funds for financing terrorism because of the lack of focus on a specific script that aligns to known terrorist finance methodologies. While the paper identifies that existing AML/CTF international standards are thorough, the process underpinning the financing of terrorism is too dissimilar to the process of money laundering, namely, placement, layering, and integration, to support practices associated with terrorism prevention and detection.Originality/valueThis paper provides an examination of the practicalities behind the countering of terrorist financing from a compliance and investigative perspective. The paper is of interest to those involved in policy, compliance and investigations associated with terrorist financing.

Anti-money laundering (AML) and counter terrorist finance (CTF) are now recognised as ongoing and possibly endless endeavours, especially in the banking industry, as they provide an entrance to the formal financial world. It is one of those areas where regulation is global, and regulatory harmonisation is evident, while enforcement is local in nature. While ultimate responsibility for AML compliance rests with each institution (eg banks) that has a relationship with the customer, collaboration in various areas can be sought for the sake of effectiveness, industry-wide cost saving and a better basis for customer services. A typical constraint that a bank would have is the fact that, in principle, banks only know what their customers do with them. When a payment is received from another bank, the receiving bank does not know whether the originator information is true or whether it is a string of alphanumeric characters that resemble a customer identity. By going through an example of an attempt to monitor payments at a Japanese domestic low value (high-volume) payment system, this paper brings to light the various issues that international as well as domestic payment service providers are facing. It also indicates potential solutions for cross-border as well as cross-industry payment monitoring. It is the first time that such propositions have been put forward in a large-volume environment, and can be made possible only because business, technical, operational and regulatory requirements are converging throughout the world.

Dirty money is often a by-product or a symptom of political corruption in the jurisdictions in which it originates. It can also spread corruption and erode democracy on its journey to its final destination. This typically involves multiple jurisdictions and is the reason why it is so hard to detect. Recently, a series of money laundering scandals have highlighted weaknesses in the anti-money laundering and counter-terrorist financing (AML/CFT) framework of the European Union (EU), the implementation of which remains the responsibility of Member States. The paper argues that EU’s defences against money laundering have been weakened partly reflecting a little-known erosion in the independence of Member State central banks, which are often the AML supervisors. It puts forward a number of new proposals to strengthen the governance and AML/CFT implementation in the EU.

PurposeThe purpose of this paper is to explore the relationship and implications of institutional autonomy and capacity through the Central Bank of Syria in its ability to implement an effective anti-money laundering (AML) and counter-terrorism financing (CTF) framework during a period of intense armed conflict.Design/methodology/approachDue to the lack of reliable data currently available on Syria, this paper focuses on Syria’s AML/CTF legislation through passed laws and regulations; annual reports on the Central Bank of Syria and the AML and terrorism financing authority; the academic literature on money laundering, terrorist financing and institutional capacity. This paper will address the theoretical framework of Coleman and Skogstad’s characteristics that define the degree of autonomy and capacity of an institution. Though their characteristics are applied toward the Canadian state, for the purpose of this paper, they have been adopted in the absence of their use verbatim in the case of the Central Bank of Syria.FindingsThe Central Bank of Syria has experienced diminishing independence due to conflict-induced stress in Syria’s financial sector. This loss of autonomy is attributed to the prioritization of government-led emergency policies to secure and stabilize Syria's economy. Despite this loss, the Central Bank of Syria has maintained considerable and effective improvements in Syria’s AML/CTF framework, aligning it closer to that of international standards promoted by the Financial Action Task Force (FATF). Institutional gaps, however, still exist. These gaps imply that the Central Bank of Syria still lags in a number of areas that affect its capability in implementing a more effective AML/CTF framework.Research limitations/implicationsThe conflict in Syria is still a very new topic that lacks a considerable amount of reliable data. As such, many research limitations were encountered despite the volume of information reviewed for this paper in both Arabic and English. Nevertheless, this paper provides a clearer understanding of how state capacity is reflected in its institutions through certain policies and approaches taken by a central monetary authority with implications and results in a country rattled by years of intense conflict.Practical implicationsDespite the research limitations and implications, this paper provides a clearer understanding of how state capacity is reflected in its institutions through certain policies and approaches taken by a central monetary authority with implications and results in a country rattled by years of intense conflict. This can be useful for institutional policymakers, as well as academics exploring the relationship between the state and its institutions in times of hardship.Originality/valueThough there is AML/CTF literature on Middle Eastern countries such as Egypt, Jordan and Saudi Arabia, very little is written on Syria. There is also very little written on the broader subject of state and institutional capacity through the lens of an effective AML and CTF framework during a period of intense armed conflict. By looking at an ongoing conflict, this paper explores a subject with as much detail as needed to provide an illustration of the relationship and implications of institutional autonomy and capacity in relation to the state through an effective AML/CTF framework in a country with a struggling financial system.

Purpose The purpose of this paper is to assess how foreign direct investment (FDI) inflows may lead to money laundering in the United Arab Emirates (UAE) and examine how well the nation’s regulations protect against money laundering risks. Design/methodology/approach A systematic literature review is used as the primary research methodology to analyze existing scholarly and practitioner works related to the relationship between FDI and money laundering in the UAE from a legislative perspective. Findings The UAE has established national legislation targeting money laundering and terrorist financing (anti-money laundering [AML]/counter-terrorism financing [CFT]) through comprehensive laws such as Federal Law No. 20 of 2018, which serves as the foundation for the country’s regulatory regime. However, the review found that having multiple regulatory systems, including those in Dubai International Financial Centre and Abu Dhabi Global Market, could lead to gaps where FDI-driven money laundering might take place. Often, free zones try to attract foreign companies by putting fewer AML/CFT rules in place than the federal government requires. Research limitations/implications The UAE’s AML structure has improved, yet there is not much data to assess how well it works. Studies in the future should examine whether the decline in FDI-related laundering is linked to these reforms. Moreover, examining how the UAE’s regulatory model compares with those of other hubs such as Singapore, Switzerland or Hong Kong could identify strengths and weaknesses. A comparative study of compliance strategies and enforcement mechanisms would help highlight international best practices that the UAE could adapt to enhance its financial integrity and global competitiveness. Practical implications By offering recommendations, this paper provides practical insights for policymakers and regulators to strengthen the country’s AML/CFT framework and better manage the risks posed by foreign investments. The implementation of these recommendations will enhance the UAE’s reputation as a transparent and secure investment destination, attracting further legitimate FDI while protecting against illicit financial flows. Originality/value This study gives current and timely insights into the harms created by gaps between regulations, as well as practical recommendations for policymakers. The results of the research will be used to update current AML/CFT practices and handle the issues caused by a divided approach to oversight. A key takeaway is the need for a harmonized approach to AML/CFT regulations across all regions of the UAE to ensure consistency and reduce vulnerabilities to illicit financial activities.

In response to the trend of money launderers resort to the non financial sector to conceal their illicit and criminal incomes, the Financial Action Task Force (FATF) released Standards on Designated Non-Financial Businesses and Professions (DNFBPs)to require countries to improve their Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) measures on DNFBPs. FATF developed standards, commonly known as the Recommendations on Anti-Money Laundering and Counter-Terrorist Financing. The Standards include that DNFBPs be subject to AML/CTF regulations in order to prevent criminal activity. In February 2012, the FATF published revised recommendations which deal with risks relating to money laundering, terrorist financing, the financing of the proliferation of weapons of mass destruction and others. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. Therefore, quite a number of legislative frameworks to combat Money Laundering (ML) and Terrorist Financing (TF) have been developed in several countries around the world. Nigeria is not left out. Other countries include Canada, France, Spain, Mexico and Sweden even though their level of compliance as found out in a study by Omar, is still not comforting. It is therefore crucial for this paper to essentially address why Designated Non-Financial Businesses and Professions (DNFBPs) are important to HNWIs and consider the roles of professional bodies.

Organised crime, corruption, and terrorism are considered to pose significant and unrelenting threats to the integrity, security, and stability of contemporary societies. Alongside traditional criminal enforcement responses, strategies focused on following the money trail of such crimes have become increasingly prevalent. These strategies include anti-money laundering measures to prevent ‘dirty money’ from infiltrating the legitimate economy, proceeds of crime powers to target the accumulated assets derived from crime, and counter-terrorist financing measures to prevent ‘clean’ money from being used for terrorist purposes. This collection brings together 17 emerging researchers in the fields of anti-money laundering, proceeds of crime, counter-terrorist financing and corruption to offer critical analyses of contemporary anti-assets strategies and state responses to a range of financial crimes. The chapters focus on innovative anti-financial crime measures and assemblages of governance that have become a feature of late modernity and on the ways in which individual nation states have responded to anti-money laundering and counter-terrorist financing requirements in light of their specific social, political, and economic contexts. This collection draws on perspectives from law, criminology, sociology, politics, and other disciplines. It adopts a much-needed international approach, focusing not only on expected jurisdictions, such as the United States and United Kingdom, but also on analysis from countries such as Qatar, Kuwait, Iran, and Nigeria. The authors stand out for their fresh and original research, which places them at the cutting edge of the subject. This book provides a comprehensive, insightful, and original study of an important and developing field for academics, students, practitioners, and policymakers in multiple jurisdictions.

Financial information can play a key role in tackling money laundering, terrorist financing and combatting serious crime more generally. Preventing and fighting money laundering and the financing of terrorism were top priorities of the European Union’s (EU) Security Strategy for 2020-2025, which might explain the fast developments regarding legislative measures to further regulate anti-money laundering (AML) and counter terrorism financing (CTF). In May 2020, the European Commission put forward an Action Plan to establish a Union policy on combatting money laundering and shortly afterwards, proposed a new AML Package.Financial Intelligence Units (FIUs) play a crucial role in analysing and exchanging information concerning unusual and suspicious transactions, serving as intermediaries between the private sector and law enforcement authorities (LEAs). Such information includes personal data, which is protected under the EU data protection acquis. The latter is constituted of two main laws, the General Data Protection Regulation (GDPR), which applies to general processing and the so-called Law Enforcement Directive (LED) that is applicable when competent law enforcement authorities process personal data for law enforcement purposes.This Article argues that the current legal framework on AML and CTF legislation is unclear on the data protection regime that applies to the processing of personal data by FIUs and that the proposed AML Package does little or nothing to clarify this dilemma. In order to contribute to the discussion on the applicable data protection framework for FIUs, the assessment puts forward arguments for and against the application of the LED to such processing, taking into account the relevant legal texts on AML and data protection.

"This study focuses on the relationship between the anti-money laundering (AML) and counter-terrorism financing (CTF) measures and the minimisation of Money Laundering (ML) and Terrorism financing (TF) risks in licensed commercial banks (LCBs) in Sri Lanka. Perceiving the increasing risk of illicit financial flows to financial stability, particularly with the emerging economies in mind, the research covers a crucial gap in empirical research on the influence of globalisation on AML/CTF effectiveness. With a positivist, quantitative, cross-sectional design, data were collected using structured questionnaires using purposive and snowball sampling of AML/CTF professionals in Sri Lankan LCBs. The outcomes reveal that there is a strong desire for internal commitment to AML/CTF compliance on the part of the banking professionals and a mostly favourable attitude of practitioners to the existing frameworks. Nevertheless, difficulties are still present in handling the complexities brought about by cross-border financial activity. Importantly, Transaction Monitoring Systems (TMS) and Training and Awareness (TA) turned out to be statistically significant predictors of the ML/TF risk reduction. In addition, globalisation showed a rather small but consistent moderating effect, especially amplifying the effects of TMS and TA. The results emphasise the need to invest in strategic monitoring systems, which are up to global standards, and continuous training of staff. Moreover, attention should be focused on compliance with procedure to risk-based approaches (RBA), enhanced due diligence (EDD), and regulatory compliance (RC), result-oriented application. All in all, the study is of significant value for the Sri Lankan policymakers and regulators who realise the need for further international cooperation and a flexible approach to the adaptation of AML/CTF frameworks to the circumstances of the globalised financial environment. It also addresses one of the most important empirical and theoretical gaps, providing practical recommendations for building up AML/CTF systems in developing economies. Keywords: Anti-money laundering, banking regulation, counter-terrorism financing, globalisation, risk-based approach "

PurposeIn June 2017, members of the Gulf Cooperation Council (GCC) ended diplomatic ties with Qatar. There is a legitimate concern about the accusation levied on Qatar. This paper aims to analyse the progress Qatar’s financial system has made with respect to its anti-money laundering (AML) and counter-terrorist financing (CFT) regulations, which further serves as the country’s effort to combating the financing of terrorism (CTF). The paper further wishes to advance the discussion by considering the legitimate goals of the aforementioned bodies and their discourse on creating national and international obligations towards reducing terrorist financing through robust AML frameworks.Design/methodology/approachThe paper analyses Qatar’s legislative and regulatory overhaul following the Financial Action Task Force’s Mutual Evaluation Report. Qatar had distinctively strengthened its approach against Money Laundering and Terrorist Financing. The paper takes an ex ante approach by understanding Qatar’s “strategic deficiencies” before the FATF’s mutual evaluation. Subsequently, the paper studies independent international evaluations of Qatar’s AML/CTF legislation and regulation.FindingsThe paper finds Qatar in significant compliance to the recommendations of the various international bodies, including the Financial Action Task Force (FATF), Basel AML Index, IMF’s financial sector reviews, United Nations and independent reports on AML progress from regulatory bodies around the world. None of these organizations present obligatory rules but have set and determined and international standard for AML/CTF laws.Originality/valueThe primary aim is to draw parallels between Qatar’s regulatory AML and CTF efforts through the country’s compliance with international initiatives, such as the FATF guidelines, Basel AML Index, IMF’s financial sector reviews, United Nations and independent reports on AML progress from regulatory bodies around the world.

Money laundering poses a significant challenge globally, involving using cash to conceal the origins of funds. With the rise of digitalisation and the adoption of financial technology (FinTech), the financial sector has been compelled to adapt to these changes. The COVID-19 pandemic has further accelerated the use of FinTech services, including digital banking, to address social distancing concerns and enhance customer convenience. Despite having an index of risk considered moderate for money laundering, Indonesia continues to be a destination for these types of illegal activities. Anti-money laundering (AML) and counter-terrorism financing (CFT) programs must be implemented, especially in all financial service providers that Bank Indonesia oversees.Additionally, the internal audit function is crucial in identifying money-laundering activities within banks. However, there needs to be more research regarding integrating RegTech and evaluating internal audit functions in preventing money laundering in Indonesian banks. This paper aims to address this gap by examining the benefits of RegTech solutions and the role of internal audit functions in preventing money laundering. The findings can be used to enhance regulations and implement effective measurement to combat money laundering and illicit activitivities. Furthermore, the study highlights the importance of Indonesia's membership in the Financial Action Task Force (FATF) to strengthen the country's AML framework and contribute to global policies on AML and countering the financing of terrorism.