Purpose
The current political situation in Europe has amplified economic sanctions as a retaliatory measure for states not directly involved in the conflict but wanting to influence the political ...situation. The purpose of this paper is to further understand the interplay of the neutrality principle and employment of economic sanctions.
Design/methodology/approach
Through an extensive literature review, heavily based on the publications of the Swiss Confederacy, neutrality as a foreign policy serving to promote Swiss interests is explored. The room for interpretation and freedom of action in the neutrality principle is highlighted above all.
Findings
Economic sanctions are compatible with the neutrality principle, but do not necessarily further the same purpose. Political pressure to participate in sanctions does not take into consideration the ways in which the credibility of neutrality can be implicated, as well as the value of protecting Switzerland’s role as an international mediator.
Originality/value
The consistency with which the neutrality principle is translated into the modern geopolitical context is crucial for its longevity. The novelty of the current political sanctions, still unfolding, demands a careful examination into the history of neutrality and the use of sanctions. No better insight can be offered than by the development of neutrality in the history of the titan of neutrality, Switzerland.
Purpose
The concept of compliance is in danger of becoming obsolete as a result of its generalization and overuse. This paper aims to refine the concept of a culture of compliance and its effective ...implementation in association with financial regulations, in line with the societal expectations of compliance.
Design/methodology/approach
This paper begins by assessing the watershed reconception of compliance in light of the Global Financial Crisis of 2008 (GFC). The influence of financial incentivization and structural weakness is highlighted above all. Recommendations focusing on the significance of the corporate context are made from this and viewed in relation to the growing relevance of compliance in regulating cyberspace.
Findings
Individuals and their decision-making are heavily influenced by the culture of their environment. Clearly, defining the values behind regulations encourages employees to follow the rules based on the principles that underlie them rather than out of fear of punishment, risk aversion or a sense of the “tick-box” duty. This contributes to the longevity of healthy compliance rather than a compliance fatigue.
Originality/value
By casting a look back at the development of compliance, the modern social expectations of compliance can be elucidated and, in turn, translated into mechanisms for corporations to effectively use. The literature on compliance has grown substantially but often limits itself to commentaries on the history of non-compliance or sector-based investigations. Hinged between the past and future of compliance, this study contributes to bridging a considerable gap in the literature by using a wider lens and positive redefinition of compliance.
Purpose
To construct effective compliance programmes, the phenomenon of non-compliance and variations in its abidance must be elucidated. The purpose of this paper is to discuss the social reality of ...ethical decision making, which examines the internalisation of moral norms and realities of social behaviour and, therefore, the general non-compliance with everyday laws (Tyler, 2006).
Design/methodology/approach
This paper makes use of several social theories, including social proof theory, traditional social theory and social control theory. Humans are social beings, and decision-making in ethics is strongly influenced by herding behaviour (Roy, 2021). The behaviour of others and normative ethical standards inform the compliance of behaviour to an undiminishable degree.
Findings
Although there is a host of factors to consider, the success of compliance can largely be attributed to people’s perception and reception of authority. The perception of authority and legitimacy plays a vital role in appreciating the complexity of rule following. Legitimacy, and its embodiment by persons in public roles, is a cornerstone of the subsequent discussion.
Originality/value
This paper uncovers the underlying motivations of non-compliance as well as the social psychology involved in the ethics of compliance. Cross-disciplinary connections are made between the private and public sector and practical compliance recommendations. The significant impact of integrity culture and value-based compliance emerges from the dissection of the social reality.
Purpose
The threat of cybercrime is pervasive. Corporations cannot be convinced, out of sheer luck or naïve conviction, that they will remain unaffected. When targeted, the stark reality is that a ...company also incurs a liability risk. This paper aims to explore the boundaries of liability resulting from a data breach and privacy concerns according to the emerging regulations on cybersecurity.
Design/methodology/approach
The nature of cybercrime and its constant evolution is analysed as a threat of liability. Its distinctly modern developments require consideration. In response to the threat of hackers, the protection that a corporation can invoke is also considered as a mitigating factor in ascribing liability.
Findings
Preventative steps to protect a corporation from cyberthreats must remain a consistent priority in the running of a company. The influence of human behaviour has become a foreseeable element in cybersecurity and as such the management of unreliable user behaviour is a key determining factor in ascribing liability in hindsight.
Originality/value
Foresight is everything in the prevention of cyberattacks. Cyberattacks can no longer be dismissed as an unlikely eventuality. Legislation on data security and data privacy is demanding higher standards of preventative action, under the duty of care to stakeholders. There is a substantial literature deficit on data security and data liability regulations in light of the liability risk incurred by cyberattacks.
Purpose
Through the lens of ethical appreciation, this paper aims to discuss what it means for a company to claim taking responsibility for its supply chain and whether this is a reasonable demand to ...make by corporations.
Design/methodology/approach
The place of ethics in economic and legislation is not selfevident. The intersection of ethics and economics through the topic of supply chains is approached by breaking down, respectively, the integral features of supply chains and the ethical considerations in compliance regulations.
Findings
The transnational nature of global supply chains, the depth of manufacturing tiers and the power asymmetries between buyer and seller are some of the fundamental sticking points in dissecting corporate social responsibility.
Originality/value
This paper uses a unique parallel perspective of the broad ethical concerns, which have developed under the umbrella term of responsibility, as well as the finer ethical details which are integral to supply chains as international structures of dependency.
Purpose
The purpose of this paper is to discuss the practical problems which Swiss financial service providers face following the government’s decision to implement economic sanctions.
...Design/methodology/approach
The practical problems of implementation are based on the identified methods of circumvention in the first author’s empirical research on the mechanisms of money laundering.
Findings
Secure anti-money laundering mechanisms promote the smooth implementation of sanctions. Despite the novelty of specific sanctions requirement, it is possible to have a supportive framework in place. Also, there remain a number of practical hurdles for Swiss banks to overcome, including the pressure on sanction alignment and the significant threat of noncompliance.
Originality/value
The sanctions imposed on Russia in 2022 are largely examined either from a broad political perspective or from the finite details of a business consultancy perspective. This paper aims to reconcile both perspectives to illustrate how the concrete problems of sanction implementation becomes evident in the wider political picture.
Purpose
The European Union’s Whistleblower Directive (WBD), or formally the “Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons ...reporting infringements of Union law” seeks to establish a uniform standard for whistleblowing protection across member state jurisdictions. Considering the international reach of the directive, it inevitably confronts divergent national attitudes towards whistleblowing. This paper aims to examine various cultural attitudes which have contributed to the common understanding of whistleblowing, under the directive.
Design/methodology/approach
The rhetoric on whistleblowing from a combination of business and national cultures is examined herein. A focus is cast on the information technology sector, which has traditionally protected trade secrecy over whistleblowing, under the guise of protecting of innovation. Moreover, the juxtaposition of American and German employment culture is testimony to the discrepancy in national narratives.
Findings
The WBD is both a symptom and a yardstick of modern employment culture in Europe. There are crucial clashes with trade secrecy which the directive has not resolved as well as an acknowledgement of the paradigm of legal thought which the directive pushes.
Originality/value
By reference to both business and national culture, this paper highlights the heterogenous conception of whistleblowing which the directive aims to reconcile. Whilst a vast amount of literature has covered isolated criticism of the WBD, a wider lens has not been cast to consider the pervasive influence of specific aspects on business culture.
Purpose
Whilst the existing literature focuses on developing prevention mechanisms for banks, this paper aims to demonstrate the ongoing feasibility of money laundering and financing terrorism ...undetected. This study thereby reveals that the current anti-money-laundering and anti-terrorism-financing mechanisms can easily be circumvented.
Design/methodology/approach
A three-stage research process was used, including both qualitative and quantitative methods. The empirical findings are based on a qualitative content analysis of 50 informal interviews with illegal financial services providers and 50 formal interviews with compliance experts and law enforcement officers.
Findings
During these interviews, specific methods of financing terrorism and limiting the risks of being prosecuted were discussed. Hence, specific methods of money laundering and terrorism financing have been analyzed.
Research limitations/implications
The findings thus convey only the perspectives of the 100 interviewees, such that generalizability is limited.
Practical implications
The practical implications include suggestions for financial regulators, financial institutions and compliance officers on how to more effectively combat money laundering and terrorism financing. Although the empirical findings are limited to Europe, the results could be applied globally.
Originality/value
This paper reveals new insights about criminals’ actions, which help to develop more effective compliance mechanisms.
Purpose
The purpose of this article is to determine how terrorist financiers have continued to exploit hawala banking in German-speaking countries, despite regulations in place to prohibit this.
...Design/methodology/approach
The first author interviewed compliance officers and suspected criminals on hawala banking mechanisms. Formal interviews with compliance officers were recorded, but interviews with suspected criminals were not, to maximize their potential forthrightness. The number of interviews totaled to 70 and a questionnaire was based on this that was sent to 200 compliance officers. The interviews were analyzed with a qualitative analysis and developed a system of categories that, in turn, was assessed by means of triangulation. These interviews enabled the first author to translate the empirical findings into his own recommendations for improving regulatory procedures prohibiting the financing of terrorism.
Findings
The paper finds that it is possible to circumvent compliance measures and exploit hawala banking to finance terrorism. Compliance officers consider the chances of detecting terrorist financing to be “low,” which is illustrated by mapping out the individual steps of the asset transfer. The conducted interviews enabled the first author to translate the empirical findings into his own recommendations for improving regulatory procedures prohibiting the financing of terrorism.
Research limitations/implications
The scope of application of results was duly considered.
Originality/value
Whilst the existing literature sufficiently connects hawala banking to terrorist financing, this article details how existing compliance measures are circumvented. Emergent policies must consider the current vulnerabilities to improve their effectiveness.
Purpose
The purpose of this paper is to illustrate threefold how hawala banking poses a problem for Swiss banks implementing anti-money laundering (AML) and anti-terrorist financing (ATF) policies as ...a fulfilment of Switzerland’s UN commitment.
Design/methodology/approach
The first author interviewed compliance officers and suspected criminals on hawala banking mechanisms. The authors formally recorded interviews with compliance officers, but interviews with suspected criminals were not recorded to maximize their potential forthrightness. In total, the authors conducted 70 formal interviews and developed a questionnaire based on this, which was sent to 200 compliance officers. The authors subjected the interviews to qualitative analysis and developed a system of categories that the authors assessed by means of triangulation. By substantiating proposed theoretical challenges with empirical findings, future recommendations for regulatory procedures are based on analytical evidence.
Findings
This study finds that hawala presents significant challenges for AML and ATF policies. Whilst it is possible to mediate the first two challenges laid out herein, it is the third hurdle that proves insurmountable. Ultimately, tolerating hawala banking passively counteracts any active effort made by implementing AML and ATF policies.
Originality/value
Whilst the existing literature sufficiently connects hawala banking to terrorist financing, this study details how existing compliance measures are circumvented and the implications on the perceived commitment of Switzerland against financial crime.
