Financial Crime Research Articles

Striking the balance: anti-money laundering goals and legal privilege in Australia

ABSTRACT Criminals engage legal professionals for their skills and services to facilitate laundering of proceeds from crime. Despite this risk, Australia remains one of the few countries globally that is non-compliant with international anti-money laundering (‘AML’) standards set by the Financial Action Task Force (‘FATF’) which urge States to impose preventative measures on legal professionals to provide intelligence to assist law enforcement in detecting financial crime. Representatives of the legal community have vehemently opposed regulating legal professionals under Australia’s AML laws since the inception of Australia’s formal AML framework, fearing that it would cause irreconcilable tension with lawyers’ ethical duties to uphold legal professional privilege (‘LPP’). Although Australia is among the last countries to impose AML duties on legal professionals, its lawmakers can benefit from examining best practices in comparable, globally compliant jurisdictions. Through consideration of the regulatory frameworks in the United Kingdom and New Zealand, this article derives practical insights and offers actionable recommendations for Australian lawmakers and international stakeholders on how to preserve LPP to the greatest extent possible while advancing AML goals. While LPP is not a barrier to AML regulation, it is an important consideration for lawmakers.

An Exploration of Selected Anti-Money Laundering Role-Players in Zimbabwe

Although Zimbabwe has established several institutions to combat money laundering and related crimes, there is a perception that inadequate measures are taken to apprehend offenders responsible for financial crimes. Institutions such as the Financial Intelligence Unit (FIU), the Zimbabwe Anti-Corruption Commission (ZACC), the Zimbabwe Republic Police (ZRP), the National Prosecuting Authority (NPA) and the Reserve Bank of Zimbabwe (RBZ) have done little to prove that the government of Zimbabwe is resolute in combatting money laundering. On the contrary, it increasingly appears that these institutions are poorly equipped and lack the necessary capacity to enforce and uphold anti-money laundering (AML) measures in Zimbabwe. Further, there appears to be a selective application of the law, with one set of rules for individuals or institutions that are perceived as political adversaries of the incumbent establishment and a different set of rules for the political elite. Consequently, the selective application of the law projects Zimbabwe as a jurisdiction that is somehow tolerant to money laundering, corruption and related financial crimes, thereby lowering and tarnishing the standing of the country in the global economic community of nations. This paper provides a regulatory analysis of the AML role-players in Zimbabwe in order to assess their functions in combatting financial crimes. It also analyses whether these role-players are effective and substantively executing their responsibilities therein. The authors argue that while Zimbabwe is well able to effectively combat money laundering through the even application of the law to all persons regardless of their political or economic standing, it is imperative that its AML institutions operate without fear, favour or prejudice. This is crucial in combatting money laundering and instilling confidence in the general public's perception of AML institutions in Zimbabwe.

Burying the head in the sand a bit deeper?

This article follows from the 2022 publication of a book by the same author on financial malpractices in the world of professional football, titled Ostrageous. As the title suggests, that book both covered the outrageous business patterns and habits – and the associated financial crime risks – that have manifested themselves in this line of industry and our inclination to turn a blind eye to these developments (portrayed by the image of the ostrich). The article focusses on the aftermath of the publication of the book and addresses the main reasons why the image of the ostrich has turned out to be even more powerful than the author thought at first sight. While the book has led to a vivid debate in the academic world on the future of professional football, the professional football industry itself remained reluctant in accepting invitations to discuss the crime problems in the sector more in depth. In the second part of the article, the author suggests some strategies that may contribute in making the market of European professional football more receptive to a constructive debate about the astronomical transfer fees, the ease in which extremely wealthy investors can buy their way into clubs, the schemes used to evade tax or launder illegal assets, and a number of other structural problems facing the industry.

Dilemmas and Solutions for Chinese Lawyers in Defending Internet Financial Crime

Dilemmas and Solutions for Chinese Lawyers in Defending Internet Financial Crime

Success in small places: NCB forfeiture thrives in Manitoba, a small but mighty Canadian jurisdiction

Purpose This paper shows how a small jurisdiction can apply well-designed non-conviction-based (NCB) forfeiture provisions with a dedicated team to have a meaningful impact on financial crime. This paper aims to examine developing jurisprudence, legislation and case law to explore how the NCB laws work. Finally, this paper examines a relatively new area of law for Canada, unexplained wealth orders (UWOs). This paper discussed three recent cases in Western Canada currently before the courts. Design/methodology/approach This paper considers legislative and jurisprudential developments relevant to NCB or civil asset forfeiture and in particular considers very recent developments involving UWOs. Findings This paper shows how a small jurisdiction can apply well-designed NCB forfeiture provisions with a dedicated team to have a meaningful impact on financial crime. Research limitations/implications Some jurisdictions, like the UK, have experienced court losses with their UWO process. Canadian law may have a modest pathway to success in this area, although our jurisprudence is very much in development. Practical implications Manitoba is a small jurisdiction with limited resources who are finding ways to have an effective impact on financial crime through the careful application of use of conviction-based forfeiture. Social implications Financial crime has an outsized impact on society. This paper shows some of the techniques available to disrupt financial crime. Originality/value This paper incorporates developments in 2024 that have not yet been examined.

Commercial forensic interviewing in the South African context: the Ponaletso CFI framework

Purpose The continued prevalence of financial crime and the lack of effective commercial forensic interviewing strategies prompted the development, presented here, of a conceptual framework to explain the relational dynamics conducive to interactions during a commercial forensic interview (CFI). The purpose of this study is to present such a framework which may facilitate the process of obtaining admissible evidence in different forums. Design/methodology/approach A grounded theory approach was adopted to develop a conceptual framework, drawing on the findings of a scoping review, direct observations of interactions involving commercial forensic practitioners (FPs) and interviewees, and data obtained from semi-structured interviews, making use of critical realism as a meta-theoretical framework. Findings Data obtained from the review informed the integrated approach of the conceptual framework, thus combining the structure of the PEACE model and creating an optimal interpersonal context informed by the person-centred approach (PCA). Observational data were used to identify the relational qualities associated with the interpersonal styles (clusters of relational qualities) of FPs in the CFI context, thereby contributing to complex relational dynamics. Interview data were used both to describe effective and ineffective interpersonal styles and how they played out in the CFI with interviewees, yielding information that unfortunately proved not to be admissible in a legal context. The findings of the different phases indicated the need for an integrated conceptual approach, the Ponaletso CFI framework, which draws on the structure of the PEACE model and the PCA, as expressed in the relational qualities of interactional pattern analysis (IPA). The framework consists of the interview stage (before, during and after), the structure (phases) of the PEACE model, the type of questions (open- or closed-ended) according to the PCA, FPs’ interpersonal styles (clusters of relational qualities as explained by IPA) and the observable relational dynamics between FPs and interviewees. When FPs use the Ponaletso CFI framework, there is a greater likelihood of extracting admissible evidence because the interview is guided by a clear structure with a step-by-step questioning approach by FPs, while taking into consideration the relational dynamics to which they contribute. Originality/value The proposed conceptual framework considers relational dynamics and how FPs can navigate towards optimal relational dynamics in CFI contexts. FPs can apply the structure, ask appropriate questions at the relevant phases and observe the relational dynamics playing out in the interpersonal context of the CFI. To the best of the authors’ knowledge, this is the first attempt at creating an integrated interviewing framework for conducting CFIs aligned with the legal context in South Africa. Using the Ponaletso CFI framework may aid FPs in obtaining admissible evidence and facilitate an optimal interpersonal context during commercial forensic investigations while respecting interviewees’ constitutional rights.

Examining Documentation Tools for Audit and Forensic Accounting Investigations

This study examines some of the documentation tools and techniques that forensic accountants, internal auditors, external auditors, and others can use to document accounting and financial reporting systems under investigation. While prior research has addressed these items piecemeal, this study is the first to incorporate them, along with current related research and theoretical foundation, and relate them in aggregate to the work of forensic accountants, internal auditors, external auditors, and others. Inputs, processes, and outputs of modern accounting and financial reporting systems are often difficult to fully grasp, with weaknesses obscured by the complexities of the system. These weaknesses make a system vulnerable to fraudsters, embezzlers, hackers, and others who will take advantage of system weaknesses to perpetrate financial fraud, embezzlement, or other financial crimes. Documentation tools and techniques examined in this study will be useful to forensic accountants, internal auditors, external auditors, and others for identifying the components, processes, and potential weaknesses of accounting and financial reporting systems.

Anonymity Unmasked The Role of Cryptocurrencies in Global Money Laundering

This research paper examines the intersection of cryptocurrencies and financial crime, particularly focusing on money laundering. It examines how these digital assets are employed in illicit financial activities, investigates the methodologies used to obscure transaction trails, evaluates regulatory responses to these risks, and presents practical case studies highlighting the real-world criminal use of cryptocurrency. The study, covering data from 2020 to 2024, combines a thorough review of existing literature with empirical analysis of blockchain transactions and case studies. The novelty of this study is the use of blockchain analysis methods for monitoring cryptocurrency transactions in the blockchain and detecting criminal money laundering techniques. It also examines how the criminals use mixers to exponentially expand the transaction trail and hide the money flow. Our analysis reveals that cryptocurrencies are often viewed as tools for anonymity but the underlying technology provides tracking of transactions, albeit with challenges, particularly when advanced techniques such as coin mixers, privacy coins, and decentralized exchanges are used. Case studies, including high-profile hacks, highlight the complexities of tracing illicit funds and challenges faced by law enforcement agencies. Despite efforts by global regulatory bodies, regulations on digital assets vary significantly around the world, allowing criminals to exploit jurisdictions with lax regulations for their illicit activities. The study concludes that cryptocurrencies pose notable risks of money laundering, advancement in digital forensic tools, enhanced regulatory measures, and greater international cooperation are essential to address these risks. This research contributes to the understanding of money laundering through cryptocurrencies and underscores the need for continuous improvement of regulation and technology to ensure finance remains safe in the age of innovation.

Track Record in Fight Against Corruption in Serbia – How to Increase Effectiveness of Prosecution?

To improve efficiency in the suppression of corruption and to fulfil international obligations, Serbia adopted the Law on the Organization and Competence of State Bodies in Suppression of Organized Crime, Terrorism and Corruption in 2016. The law foresees many new solutions that should contribute to the effectiveness of processing of corruption. One of the reasons for the adoption of law was the fulfilment of GRECO’s recommendations from the second round of evaluation, as well as the obligations stipulated in the national policy documents, the National Strategy for the Fight against Corruption (2013–2018), the Action Plan for Chapter 23 and the Strategy for Investigating Financial Crimes for the period 2015–2016.The measures and activities that were foreseen in the Strategy for Investigating Financial Crimes are aligned with European standards and good practice and are transposed in the Law on the Organization and Competence of State Bodies in Suppression of Organized Crime, Terrorism and Corruption. After six years of implementation of this law, it necessary to analyse the results and impact of its application.The goal of this research is to provide recommendations for the improvement of both national legislation and the practice of public prosecution in the suppression of corruption. In the paper, authors started from the assumption that the effectiveness of its suppression depends on the quality of the legal solutions that regulate the work of the public prosecutor’s office, as well as their application in practice. To realize the goal of the research, the dogmatic-legal method and content analysis were used in the paper.

A content analysis of illicit tobacco-related crimes reported in Australian media.

Australian survey and seizure data suggest a growing illicit tobacco market. As an illicit product, accurately tracking trends in illicit tobacco growing, manufacture and sales is challenging. We examined trends in Australian illicit tobacco-related crimes using a content analysis of news articles. We analysed Australian news articles identified in the Factiva database and government press releases describing Australian illicit tobacco-related crimes reported between January 2000 and December 2023. Sources were coded for crime type, location, product type, dollar value of seized products, methods of distribution or storage, agencies involved, and other crimes involved. We identified 447 crimes reported in 389 sources. The number of illicit-tobacco related crimes reported increased between 2000 and 2023. The most common crimes were possession of illicit tobacco (n=196/43.7%) and smuggling (n=187/41.8%), and the most common product type was 'illicit cigarettes' (n=197/44.1%). The most common distribution/storage method reported was via residential premises (n=98/21.9%). One-hundred and twenty incidents involved other crimes such as financial crimes involving money laundering (n=59/13.2%). Across all included news articles, the quantity of seized products totalled 827,529,307 cigarette sticks, 76,185 cartons, 668,687 packs, 239 hectares (of land growing tobacco plants), and 2,149,000 plants of illicit tobacco between 2000 and 2023. The median value (worth; AUD) of each seizure was $1,500,000 (range $43 to $67,000,000). Australian media reporting on illicit tobacco-related crimes increased over the past two decades, particularly since 2018. These findings highlight a need for improved border detection measures, investment in enforcement and other deterrent activities. This media analysis confirms trends identified in national survey data that indicate a growing illicit tobacco market in Australia since 2013 with a marked increase since 2018. While survey data suggests that Australian tobacco tax policy, which has included regular large tax increases since 2010, has decreased consumer demand for tobacco overall, it may have also incentivised criminal networks to supply illicit tobacco products due to it being a 'low risk' and 'high reward' activity. Controlling the Australian illicit tobacco market should be a policy priority.

Editorial: Prison is not a viable pursue strategy in financial crime; the “serious violence duty” can help improve prevent strategies

Editorial: Prison is not a viable pursue strategy in financial crime; the “serious violence duty” can help improve prevent strategies

Corruption in the Nigerian Public Sector: Causes, Consequences and Sustainable Solutions

Corruption in Nigeria's public sector has long hindered the nation's development, stability, and prosperity. It permeates various facets of governance and society, leading to detrimental consequences, including economic stagnation, social injustice, and the erosion of public trust. Historical factors, such as the legacy of colonial exploitation and successive post-independence governments' mismanagement, have entrenched a culture of corruption. Despite efforts to combat it, including the establishment of anti-corruption agencies like the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC), corruption remains pervasive. This study adopts a qualitative research design to explore the complex dynamics of corruption in Nigeria's public sector. Using Albert Bandura's social learning theory as the theoretical framework, and it explores how corrupt behaviors are observed, imitated, and reinforced within the public administration. The research identifies multiple causes of corruption, including institutional weaknesses, economic pressures, and cultural norms, which create an environment conducive to corrupt practices. The consequences of corruption are enormous: It undermines economic growth and development, deters foreign direct investment, exacerbates poverty and inequality, erodes public trust in government, and fuels political unrest and instability. Addressing corruption requires a comprehensive approach involving the strengthening of institutional frameworks, promoting transparency and accountability, improving public sector management, and fostering a culture of ethical leadership. Sustainable solutions to combat corruption include; enhancing the capacities of anti-corruption agencies, to be independent of the executive body, implementing public procurement reforms, ensuring budget transparency, and enforcing stringent anti-corruption measures.

Money laundering and other forms of financial crime

Money laundering and other forms of financial crime

Money laundering and the automobile industry: a comparative study between the laws of Mauritius and UK

Purpose Motor vehicles play a vital role in the economic and social growth of any country. However, they have recently become instruments and a source of illegally obtained financial gains for criminal bodies and individuals. This study aims to assess the laws of Mauritius on AML procedures to prevent money laundering through vehicles transactions. Design/methodology/approach To achieve the research objective, the black letter research method was used by analysing laws, regulations and case laws on the subject matter. A desk-based and doctrinal approach was also used by examining policy papers, scholarly articles and newspaper materials on the researched topic. Additionally, the research adopted a comparative analysis by assessing how the laws of another country address the issue of money laundering through vehicle transaction and the selected country is the UK. Findings The research concluded that Mauritius AML laws are lagging behind of the UK laws and accordingly, some measures were suggested to deal with the issue of money laundering through vehicles transactions. Accordingly, this research recommended that motor vehicle dealers who are high value dealers engaged in cash transactions above certain threshold, must also be categorised as reporting persons under the FIAMLA such that the prescribed AML measures apply to them. Additionally, it is convenient for the FCC to be embodied with some additional punitive and corrective powers to assist the Commission in its fight for the prevention and elimination of financial crimes in Mauritius. Originality/value At present, this study will be among the first academic writings on the intersection between money laundering and the automobile industry and on the effectiveness of the legal and regulatory measures undertaken by the Mauritian authorities to prevent money laundering through vehicles transactions. The study is carried out with the aim of combining a large amount of empirical, theoretical and factual information that can be of use to various stakeholders and not only to academics.

Effectiveness of the UK AML System and Strategies for Improvement

As the cost of anti-money laundering (AML) compliance in the UK continues to rise, financial crime rates have not fallen. This study assesses the effectiveness of the UK’s anti-money laundering (AML) system and proposes strategies for improvement. The research examines the current legal framework, including the Proceeds of Crime Act (POCA) and the Money Laundering Regulations 2017 (MLR2017), assessing their role in preventing and combating financial crime. Analyzing case studies and statistical data, the findings suggest that while the UK AML system has been effective in identifying and deterring money laundering, significant challenges remain. Insufficient sharing of information between agencies, uneven allocation of resources, and inconsistent regulatory enforcement hinder overall effectiveness. To address these shortcomings, the study makes several strategic recommendations: strengthening inter-agency cooperation, leveraging advanced technological solutions for data analysis and reporting, improving training and awareness programmes for financial institutions, and improving the legal framework to adapt to emerging threats. Implementing these recommendations could strengthen the UK’s anti-money laundering (AML) efforts, making them more robust and responsive to the evolving financial crime landscape. Ultimately, this study aims to contribute to the current debate on the effectiveness of AML and to make recommendations for improving the AML system’s response to the complexities of money laundering in order to strengthen the UK’s position in the global fight against money laundering.

Bridging Theory and Practice : An Integrated Approach to Blockchain and Data Analytics Education

This article presents a comprehensive framework for building a strong foundation in blockchain technology and data analytics, two rapidly evolving fields that are increasingly intertwined in today's digital landscape. We propose a structured approach that combines theoretical knowledge acquisition with practical skill development, designed to equip aspiring professionals with the necessary tools to succeed in this dynamic sector. The framework encompasses key areas such as blockchain fundamentals, smart contracts, cryptography, data analysis techniques, and advanced machine learning concepts including neural networks, deep learning, and artificial intelligence. We emphasize the importance of leveraging diverse educational resources while highlighting the critical role of hands-on projects in reinforcing learning outcomes. By detailing strategies for developing blockchain applications and conducting advanced data analytics, this article bridges the gap between academic understanding and practical application. We explore real-world use cases demonstrating the synergy between blockchain and AI in areas such as financial crime prevention, supply chain management, and healthcare. Our findings suggest that this integrated approach not only enhances technical proficiency but also cultivates the problem-solving and analytical skills essential for advancing towards professional roles in blockchain and data analytics. This research contributes to the growing body of literature on technology education and provides a roadmap for individuals seeking to establish a robust foundation in these interconnected fields.

Advancing AML tactical approaches with data analytics: Transformative strategies for improving regulatory compliance in banks

The growing complexity of financial crimes necessitates advanced Anti-Money Laundering (AML) strategies that leverage data analytics to improve regulatory compliance in banks. As traditional AML methods face challenges in detecting sophisticated money laundering schemes, data analytics offers transformative solutions by enabling real-time monitoring, enhanced risk detection, and predictive analysis. This review explores the integration of data analytics in AML systems and its impact on regulatory compliance, focusing on strategies that banks can adopt to mitigate risks and adhere to evolving regulations. Data analytics empowers financial institutions to analyze vast amounts of transactional data, identifying suspicious patterns and anomalies with greater precision. Machine learning algorithms and artificial intelligence (AI) further enhance these capabilities by automating risk assessments, reducing false positives, and improving decision-making processes. Through predictive analytics, banks can anticipate emerging threats, adapting their AML strategies proactively to counter new money laundering techniques. A key advantage of data-driven AML approaches is the ability to streamline compliance processes. By automating Know Your Customer (KYC) procedures and cross-referencing data from multiple sources, banks can efficiently verify customer identities and monitor for unusual behavior. Additionally, the adoption of data analytics improves reporting accuracy, ensuring compliance with stringent regulatory frameworks such as the Financial Action Task Force (FATF) and the Bank Secrecy Act (BSA). This review highlights the transformative role of data analytics in enhancing AML efforts, emphasizing the importance of real-time data integration, predictive modeling, and automation. The shift from reactive to proactive AML approaches not only strengthens regulatory compliance but also fosters a culture of vigilance and risk management within banks. As financial institutions continue to embrace digital transformation, leveraging data analytics for AML will be crucial in combating financial crimes and maintaining compliance in an increasingly complex regulatory environment. Keywords: Anti-Money Laundering (AML), Data Analytics, Regulatory Compliance, Banks, Financial Crime, Machine Learning, Artificial Intelligence, Know Your Customer (KYC), Predictive Analytics, Risk Management.

Legal Support of Artificial Intelligence in Countering Anti-Money Laundering and Terrorism Financing Regimes in the BRICS Plus Countries

The increasing integration of artificial intelligence technologies into the financial structures of the BRICS Plus countries (comprising the original member countries of Brazil, Russia, India, China, and South Africa as well as the four new member countries of Egypt, Ethiopia, Iran, and the United Arab Emirates) presents both opportunities and challenges in combating economic crimes, which include money laundering and terrorism financing. This article explores the complex regulatory landscape that governs the application of artificial intelligence in these efforts. It examines how artificial intelligence can enhance the performance of anti-money laundering and counter-terrorism financing frameworks by enabling the evaluation of massive datasets, the identification of anomalous transaction patterns, and the automation of compliance procedures. Simultaneously, the article addresses the highly challenging situations that arise when using artificial intelligence. For instance, these technologies can make it difficult to understand the fluctuation of illicit price ranges, thereby complicating efforts to determine their origins and destinations. Through a comparative analysis of the frameworks throughout the BRICS Plus countries, this research highlights the varying levels of regulatory readiness of these frameworks and proposes pathways for harmonizing artificial intelligence-driven economic security measures. The overarching goal of an artificial intelligence model is to enhance both the effectiveness and the integrity of the financial sectors in the BRICS Plus consortium, necessitating a collaborative approach to combating financial crimes in an increasing number of digital economies across the world.

THE SPATIAL LINKAGES BETWEEN INTERNATIONAL MIGRATION AND SECURITY: THE EMPIRICAL FINDINGS FROM TURKEY HOSTING MOST REFUGEE IN THE WORLD

The increasing international migration in the world, especially due to the conflict, have potential negative impacts in immigrant countries. An increase in crime rates caused by unemployed immigrants who cannot meet their food and housing needs is one of them. Accordingly, the study investigates the effects of international immigrants, whose numbers reached about 3,9 million in Turkey, on violent and financial crime rates. The Spatial Error Panel Model with Fixed Effects covering Turkey’s 26 NUTS-II regions and 2016-2019 period indicate that there are positive and statistically significant relationships between immigrants and these crime rates. However, the negative impacts of international migration on security are mainly observed in financial crimes rather than violent crimes. Furthermore, the most important determinants of these crimes are high food and housing costs. And also, there is a negative relationship between uneducated employment and financial crimes rather than violent crimes. On the other hand, the findings indicate that regions have spatial dependency positively in terms of violent crimes. It means that as average violent crimes increase in the neighbors of a region, the violent crimes of that region also increase.

Unveiling the Concealed Risks: The Influence of Digital Finance on Cyber Financial Crime in China

Digital finance has emerged as a pivotal catalyst for economic growth in China, profoundly altering social structures and behaviors. Despite its benefits, it has also engendered financial risks, thereby complicating social governance. This study utilizes a panel dataset from China’s provinces spanning 2011 to 2021 to analyze the influence of digital finance development on cyber financial crime rates. The results reveal a positive correlation: an increment of one unit in the digital finance index is associated with a 0.058 unit increase in cyber financial crime rates. These findings are robustly supported by tests for endogeneity and robustness. Variations in impact are observed across urbanization levels and average wage brackets. And the study identifies income distribution and traditional financial demand as the mechanisms of the effect. Furthermore, this study presents strategic recommendations to enhance financial inclusion, facilitate income redistribution, strengthen cyber crime governance, and integrate digital and traditional finance for the advancement of financial modernization.