Transaction Reports Research Articles

A Comparative Study of the Money Laundering Laws/Regulations in Nigeria, United States and United Kingdom (Part 1)

The Financial Action Task Force (FATF), the independent intergovernmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and financing the proliferation of weapons of mass destruction, advised countries to enact laws that mandate financial institutions and designated nonfinancial businesses and professions (DNFBPs) to file certain reports. These reports are to be filed when a financial institution or DNFBP suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity or are related to terrorist financing. Although countries have followed the advice of the FATF, the reporting requirements in different countries are not the same. For example, Nigeria and the United States require financial institutions to file suspicious transaction reports (STRs) and currency transaction reports (CTRs), while countries like the United Kingdom require financial institutions to file only a suspicious activity report (SAR). This paper, therefore, compares the reporting requirements in Nigeria with those of the United States and the United Kingdom. The aim of such comparison is to determine if Nigeria needs to adopt the approach in these countries or if there is no need for reform.This paper briefly highlights the relevant money laundering laws/regulations in Nigeria, the United States and the United Kingdom. It will then compare the reporting requirements in Nigeria with those of the United States and the United Kingdom under five subheadings: ‘What to File’, ‘Where to File’, ‘When to File’, ‘Confidentiality of SARs’ and ‘Penalties’. This paper will later analyse issues that arise from the earlier comparison, with the aim of determining if there is need for reform.

Requiring Lawyers to Submit Suspicious Transaction Reports: Implementation Issues and Current International Trends

This paper probes into the question of whether or not lawyers should be required to submit suspicious transaction reports to combat money laundering. It points out that while lawyers and other professional advisers play an important and indispensable role in complex financial transactions, making them a logical partner in the fight against money laundering and terrorist financing, the well-accepted principles of confidentiality commitments and rules on legal privileges make such an initiative cumbersome and difficult to pursue.

NATIONAL AND INTERNATIONAL COOPERATION ON THE PREVENTION AND ERADICATION OF MONEY LAUNDERING

The Prevention and eradication of money laundering, as one of the new paradigm in the effort of combating crimes, has its own mechanism in conducting both national and international cooperation, especially in relation to the cooperation of information exchange. The cooperation is mediated by the establishment of Memorandum of Understanding, and can also be conducted by the principle of reciprocity among parties. In its practice, the cooperation will strengthen the performance of Indonesian Financial Transaction Report and Analysis Center (INTRAC/PPATK) in conducting its duties and authorities as Financial Intelligence Unit.

How to Clean Enhanced TRACE Data

This note is a supplement to Liquidity biases in from the Journal of Fixed Income, 2009. The note updates the transaction data filter to handle Enhanced Historic TRACE data and provides SAS code for the new filter (now including the 2012 change). As an example, there are 6.7 mill raw transaction reports in 2007. 440,000 are deleted as known errors. 780,000 are deleted as agency transactions. Finally, 1.6 mill are deleted as interdealer double counted transactions. In total the filter deletes almost 35% of the raw transactions.

Perancangan Aplikasi E-Commerce Dengan Sistem Rekomendasi Item-Based Collaborative Filltering

PD Damai Motors is one company in the town of Bandar Lampung engaged in the sale of spare parts, however, the system is running right now, there are still many problems that occur both on the vendor and on the part of consumers, especially outside the city of Bandar Lampung. The vendor has not had a special media to promote a product - products and recording sales transactions reports are done manually using only existing proof of the transaction. And consumers still have to directly come to the store if you want to get information about products and want to order the products according to the desired design, as well as the consumer should contact the vendor via sms / call if you want to know the progress of the production order. Scientific report will describe and explain the design Application E-Commerce system with Item-Based Collaborative Filltering clearly so that can know the location of the problem. In analyzing the system, the authors use analytical tools such as Document Flow Diagram (flowchart) and Unified Modeling Language (UML)XV + 60 + Attachment Refrences

Endemic corruption in the Iraqi public sector

PurposeThe purpose of this paper is to determine whether anti‐money laundering measures are capable of providing a solution to the growing problem of public sector corruption in Iraq and, if so, the extent to which changes are required to the current Iraqi AML regime to enhance its effectiveness against such corruption.Design/methodology/approachThis paper will initially explore the growing problem of public sector corruption in Iraq and the measures taken to address such corruption. Subsequently, the corruption‐money laundering relationship and the ability of AML measures based on prevailing international standards to serve as an anti‐corruption tool will be analysed. Finally, the current Iraqi AML regime will be examined to observe whether and to what extent changes are required to enhance its effectiveness against public sector corruption.FindingsConsidering the widely acknowledged nexus between corruption and money laundering, a robust AML regime can be effectively utilised by Iraq to combat endemic public sector corruption. This regime must involve a system where financial institutions at their own expense monitor transactions and file suspicious transaction reports with the Iraqi Money Laundering Reporting Office. This, in turn, must identify cases from those suspicious transaction reports that require further investigation by Iraqi anti‐corruption bodies and other law enforcement authorities, who should be empowered to investigate, freeze, seize and confiscate the suspected corrupt proceeds. Such a regime would provide a clear avenue for the obtaining of financial intelligence capable of exposing corruption, thereby addressing the fundamental issue presently encountered by Iraqi anti‐corruption bodies. Amendments are, however, needed to Iraqi anti‐money laundering laws to enhance their effectiveness in combating public sector corruption. Most importantly, financial institutions must be required to apply enhanced customer due diligence measures to domestic politically exposed persons.Research limitations/implicationsThis paper is a result of a remote analysis of material published in relation to the subject matter of the paper. Local and regional analysis (e.g. including interviews with the relevant agencies) would be required to confirm the practicality of the propositions made in the paper. Further, the draft version of the revised Iraqi anti‐money laundering law was not examined in an in depth manner due to the uncertainty in its status, including, in particular, whether it has been submitted to the Council of Representatives for approval.Originality/valueAlthough the topics of corruption in Iraq, the Iraqi AML regime and the corruption‐money laundering relationship have been the subject of academic analysis, the related topics have not collectively been examined to determine whether, and to what extent, the Iraqi AML regime can address the rapidly growing problem of public sector corruption in Iraq. Accordingly, the findings in this paper will be of interest to Iraqi lawmakers, Iraqi law enforcement agencies, Iraqi financial institutions and investors in Iraq, particularly in the oil and gas industry.

International anti‐money laundering regulation of alternative remittance systems

PurposeThe purpose of this paper is to examine the recommendations of an influential international advisory body, the Financial Action Task Force (FATF), towards regulation of Alternative Remittance Systems (ARSs).Design/methodology/approachThe research design is a comparative analysis of Afghanistan and the United Arab Emirates, using available FATF documentation and external sources.FindingsThe analysis shows that FATF is right in pointing out that ARSs are useful vehicles for criminals to move operational expenses and launder the proceeds of their crimes. However, based on the cases of Afghanistan and the United Arab Emirates (UAE), it is argued that FATF's main approach of seeking to integrate these informal, traditional systems into the sphere and regulations of the formal banking system can be ineffective and even counterproductive in developing countries. Rather than taking a genuinely risk‐based approach, all ARS operators are required to be registered or licensed, conduct Customer Due Diligence (CDD) and fill out Suspicious Transaction Reports (STRs), just like commercial banks.Research limitations/implicationsThe impact of mandatory registration and requiring CDD and STRs has been negligible in Afghanistan and the UAE. Therefore, the article calls for new approaches to control money laundering in ARSs.Originality/valueThe paper is the first independent, comparative case study analysis of FATF regulations and implementation. It illustrates the limited knowledge/research in the field, and the inherent limitations of the current regulatory approach.

Geographical risk of money laundering in the European banking system

The issue of risk of money laundering in the European banking system was presented in the article. It describes two approaches used by regulators to prevent the mentioned phenomenon: the rule-based approach and the risk-based approach. The author also identified strategies which are used by banks as entities functioning to maximize profit in the conditions of having full and incomplete information by the FIU. Then, the European countries were analyzed with respect to participating reports on suspicious transactions in the total number of reports, which are sent by all the obligated entities to the national financial intelligence units. We also verified the value of two indicators: the value of above-threshold transactions and the value of financial penalties, which are imposed on banks for failure to comply with the rules on anti-money laundering. Some hypotheses were examined. With the increase in GDP per capita grows the maximum value of the mentioned financial penalties grows. There is a negative correlation between the share of banks in the total of reported suspicious transactions and GDP per capita, which is an effect of extending the list of the obligated entities and the lack of the differentiation of sanctions in the various categories of such entities. In connection with the applying of transitional period for implementing the directive by the banks, there is an inverse relationship between the amount of the penalty, and the number of suspicious transactions reports.

Regulatory context

PurposeBased on semi‐structured interviews with current senior officers of the Indonesian Police Force, Indonesian Attorney General's Office and the Indonesian Financial Transaction Reports and Analysis Centre (Pusat Pelaporan dan Analisis Transaksi Keuangan), the purpose of this paper is to consider the regulator context and governance of some key issues in Indonesia's anti‐money laundering (AML) regime: the progress of “know your customer” implementations and the crackdown on foreign bribery.Design/methodology/approachInterviewing respondents from key Indonesian agencies involved in the AML regime, the authors used semi‐structured interviews to develop a narrative analysis of the research questions.FindingsThe results of the narrative analysis suggest all three agencies are satisfied with the effectiveness of “know your customer” regulations, particularly in their capacity to heighten awareness. All respondents, however, were a little more circumspect on the foreign bribery crackdown.Practical implicationsThe paper shows that at best, mutual legal assistance provided help for transaction reports and analysis. At worst, it appears foreign bribery issues are an intractable problem. It is concluded that policy tools need to be contextualised within Indonesia's socio‐economic realities rather than wholly struck from western fields.Originality/valueFresh “insider” insights were gleaned about the current state of play regarding “know your customer” principles and the clampdown on foreign bribery. This is of value to many parties involved in the advancement of AML, both within and outside Indonesia.

AMLCTF compliance and SMEs in Australia: a case study of the prepaid card industry

PurposeThe purpose of this paper is to explore the possibility of effectively enforcing the Anti‐money Laundering and Counter Terrorism Financing (AMLCTF) Act compliance on prepaid card small and medium enterprises (SMEs). Currently, certain types of prepaid cards providers are exempt from compliance. This paper looks at this situation bearing in mind the necessity of keeping regulation manageable for SMEs.Design/methodology/approachThe paper adopts the case study approach facilitated by an online search of different prepaid card vendors. Using this as a basis, a feasibility analysis of the AMLCTF Act is conducted for prepaid card SMEs.FindingsIt is found that not all regulation compliance requirements are applicable to SMEs. Regulation enforcement without considering the capabilities of the regulated entities will only increase avoidance. It is also found that the AMLCTF Act does not effectively address the issue of prepaid cards' vulnerability to money laundering and terrorism financing (ML/TF) illustrated by exclusion of prepaid cards that cannot be used to withdraw money from the compliance. Given that there are records of such cards been exploited for illegal trading, Australian Transactions Reports Analysis Centre appears not to be up to date with the ongoing trend in ML/TF around the world.Research limitations/implicationsLimitations of case study research methodology apply. Also, the prepaid card vendor information is based on an online search of their web sites and did not involve in‐person interactions to gather the information.Originality/valueThis is the first paper in anti‐money laundering literature that has considered SMEs and attempted to look into the AMLCTF Act compliance requirements' applicability for them. It is believed that the case study can facilitate further research related to regulation enforcement issues for SMEs.

How effective are suspicious transaction reporting systems?

PurposeA 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/approachPrimary source documentation, complemented by observations at FATF meetings, are relied on to evaluate STR systems.FindingsThe 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/implicationsEvaluation of national STR systems is limited because of a lack of reliable statistics on the extent of money laundering.Practical implicationsThis 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/valueInsider/outsider description of the FATF mutual evaluation process. Compilation and interpretation of statistical data on STR systems, as performance measures.

Implementing the New Anti-Money Laundering Directive in Europe: Legal and Enforcement Issues - The Italian Case

In this paper a first assessment of the 2007 reform of Italian anti-money laundering (AML) law is presented. In light of the relevant literature on AML, the reform seems to improve the Italian AML framework in many ways, but there persist some drawbacks both on the legal and the enforcement side. As for the former, there are some advances in the definition of ML and the institutional framework, but a closer coordination with other specific legislations and some adjustments in the sanctions regime would be needed. On the enforcement side, the risk-based approach and the inclusion of professionals' associations among AML agents are promising, but the persisting noticeable gap in the number (and significance) of suspicious transactions reports, both across the categories of agents and the geographic areas, needs to be explored to investigate the possible influence of (polluting) environment factors hampering the implementation of the AML regulation.

Markets: Transparency and the Corporate Bond Market

For decades, corporate bonds primarily traded in an opaque environment. Quotations, which indicate prices at which dealers are willing to transact, were available only to market professionals, most often by telephone. Prices at which bond transactions were completed were not made public. The U.S. corporate bond market became much more transparent with the introduction of the Transaction Reporting and Compliance Engine (TRACE) in July 2002. Beginning that date, bond dealers were required to report all trades in publicly issued corporate bonds to the National Association of Security Dealers, which in turn made transaction data available to the public. In this paper, we describe trading protocols in the corporate bond market and assess the impact of the increase in transparency on the market. We review how TRACE has affected the costs that corporate bond investors paid to bond dealers for their transactions. We canvass the opinions of a variety of finance professionals and consider articles in the trade press to obtain a broader view of the impact of transparency on the corporate bond market

Implementing the new anti-money laundering directive in Europe: legal and enforcement issues; the Italian case

In this paper, a first assessment of the 2007 reform of the Italian Anti-Money Laundering (AML) law is presented. In light of the relevant literature on AML, the reform seems to improve the Italian AML framework in many ways, but there persist some drawbacks on both the legal and the enforcement sides. As for the former, there are some advances in the definition of Money Laundering (ML) and the institutional framework, but a closer coordination with other specific legislations and some adjustments in the sanctions regime would be needed. On the enforcement side, the risk-based approach and the inclusion of professional associations among AML agents are promising, but the persisting noticeable gap in the number (and significance) of Suspicious Transactions Reports (STRs), both across the categories of agents and the geographic areas, needs to be explored to investigate the possible influence of (polluting) environmental factors hampering the implementation of the AML regulation.

Australia's New Anti-Money Laundering Strategy

In 2006 the Australian Government undertook major reform of the regulatory framework to detect, prevent and prosecute money laundering. These reforms were responses to the changing nature of money laundering as well as the limitations inherent in the existing compliance or rule-based regulatory approach. Originally intended to deal with the laundering of cash generated mainly by drug trafficking, contemporary anti-money laundering systems must now deal with a range of ‘public bads’, including organised fraud, the financing of terrorism, corruption and the theft of state assets, and the financial weaknesses of ‘failed states’. Existing regulatory systems have generated unwieldy volumes of defensive reports of suspicious transactions, but little in the way of tangible outcomes. Australia's money laundering regulatory deficiencies were highlighted by an evaluation review conducted in 2005 by the Financial Action Task Force. This article considers how the new Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) addresses these regulatory deficiencies. It examines the change from a compliance to a risk-based approach, increased customer due diligence requirements and their impact on bank privacy and related issues, and how the new regulatory framework is likely to impact on the role of the Australian Transaction Reporting and Analysis Centre (AUSTRAC) and its relationship with financial institutions and other reporting entities.

A filial son or a loving mother?: Evaluation as recontextualisation devices in property transaction reports

Many of the utterances that we speak are evaluative. Although there have been increasingly systematic attempts at classifying evaluative lexes, such constructs have not been applied in real contexts. One of the problems is the implicit realisations of evaluation, which is not ‘simply there’ to be pinned down. The second problem is how evaluation is related to the intertextual positioning of the readers. This paper argues that the system underlying evaluation should best be situated in the practice of recontextualisation through which different frames or activities can be invoked. Drawing on data from property transaction reports, it is shown that the genre is intertextually constructed as a news report and an advertisement in a subtle manner, which is made possible by the use of evaluation as the recontextualisation of the two different activities involved. [Display omitted] [Display omitted]

Property transaction report: news, advertisement or a new genre?

Property transaction reports are a hybrid genre that combines the characteristics of news reports and advertisements. However, they are different from the traditional hybridity of advertorials, which carry a full-blown label of ‘advertisement’ or ‘promotional material’ and may repeat the name of a product or service many times. Property transaction reports, as an emerging genre in Hong Kong property magazines, combine the voices of property agencies and journalists in a very subtle and sophisticated manner, which is partly made possible by the ambiguous local citing framework. Although the genre is a more successful mix of voices than advertorials, this is not the result of a conscious attempt to mix two genres. Indeed, it is the result of how two ‘communities of practice’ accommodate their practices to accomplish their tasks. This highlights the importance of ‘practice’ in understanding the complex issue of intertextuality.

Appropriate Measures to Use Money Laundering Prevention as an Antidote to Tax Evasion

Money laundering, which is closely linked with tax evasion and informal trade, is facilitated by the poorly regulated financial institutions of "mafia nations". These nations make billions of dollars by laundering money and giving safe haven to drug dealers and corrupt politicians, allowing them to transfer money globally. Money laundering prevention policies require financial institutions to periodically update their customer's personal information. Furthermore, they attemp to match tax and transaction reports collected from banks and non-banks around the world to detect tax evasion. This research explains how efficient policies for preventing money laundering can help reduce tax evasion.

‘The most valuable commodity I know of is information’

This paper summarises the FSA's enforcement action taken to date under the market abuse regime and considers how the implementation of the Market Abuse Directive (‘MAD’) will affect the work of city compliance officers. In particular, this paper focuses on the new requirement for the regulated sector to make suspicious transaction reports in respect of market abusive behaviour as well as considering how the newly revamped market abuse regime will sit alongside the criminal offence of insider dealing.

Threshold transaction disclosures: access on demand through latent disclosure rather than reporting

Distinguishes between the two normal methods of reporting suspected cases of money laundering to the authorities, usually a financial intelligence unit (FIU): a suspicious transaction report (STR) or a cash transaction report (CTR), the latter occurring when the amount of cash exceeds the threshold figure. Points out problems in CTR, mainly that it is only relevant at the placement stage of money laundering. Considers a system of threshold transaction disclosures as a possible compromise; this would cover all transactions over the threshold, not just cash. Suggests an “access on demand” system as a hybrid variety of threshold reporting. Concludes that threshold disclosure can be an effective low‐cost solution to the evolving practice of money laundering.