The aim of the article is to study the problems/shortcomings, current challenges and opportunities in order to ensure an efficient and comprehensive approach to improving the system of financial ...monitoring in Ukrainian banks and, further on, assessing compliance risks. Based on the carried out analysis of scientific works of a number of scholars, normative legal acts of the National Bank of Ukraine, taking into account international practice, ways to improve the system of financial monitoring in Ukrainian banks, and assessment of compliance risks were considered. The article identifies the prerequisites that are of driving nature and require continuous improvement of the system of financial monitoring and compliance risks; the problems of prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction are analyzed, its difficulties and shortcomings are identified; the importance of effective interaction between the State bodies is emphasized; the measures of the State regulator – the National Bank of Ukraine – in the sphere of financial monitoring are analyzed; the principles that should be followed in the assessment of compliance risks are described; the external and internal factors that determine the efficiency of compliance are indicated. The necessity of improving the system of financial monitoring in the banks of Ukraine along with assessment of compliance risks is substantiated. Measures to improve the system of financial monitoring, including the assessment of compliance risks, are proposed, recommendations for the regulatory activities of the National Bank of Ukraine are presented. Prospects for further research in this direction are the improvement of: the system of financial monitoring and assessment of compliance risks, which can occur by amending the regulations in force in Ukraine, while taking into account international practice; the internal banking system for preventing and combating legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction in banks.
Almost half of the Romanian companies have been victims of economic crime in the last two years, and over 50% of the economic crimes committed globally were caused by the inefficiency of internal ...control mechanisms, according to a PwC Report of May 2018. Under these conditions, it was necessary for economic entities to develop procedures that prevent, combat, but also report fraudulent behavior. The financial auditor has an important role to play in this direction, both for assessing the risk of fraud, in general, and for assessing the risks of money laundering and terrorist financing, in particular. In this regard, recent changes were made to regulations issued at European and national level on the obligations of financial auditors for the establishment of measures to prevent and combat money laundering and terrorist financing in the missions in which they are involved. This article aims, on the one hand, to highlight the financial audit procedures for assessing the risks of money laundering and terrorist financing identified in the audit missions of companies listed on the BSE, and on the other, to test the influence these risks on the reporting by the financial auditors of the suspicious transactions, but also on the audit opinion.
Aware of the danger that the risk of money laundering and terroist financing has on the whole society, and with the aim of increasing awareness of the effective fight against the same risk in Bosnia ...and Herzegovina (BiH), the paper deals with the research of mechanisms for managing the risk of money laundering and terrorist financing activities.
The research of this work will be focused on determining the degree of application of the requirements of the legislative and institutional framework for the fight against money laundering and terrorist financing by those obliged to apply law. Also, the paper points to the cooperation of state institutions with entities of the BiH, and examines the degree of compliance of the BiH system with international standards related to the fight against money laundering and terrorist financing. In order to assess the management of this risk as efficiently as possible, the paper will cover financial and non-financial money transfer systems, and indicate the level of measures taken in this fight by the competent institutions. For the purposes of research in the paper, the data published by the competent institutions through their reports/publications will be used, with a special focus on the data published by the Banking Agency of the Federation of Bosnia and Herzegovina as the legal entity that reported the largest number of suspicious transactions in the analyzed period. The results of the research indicate that there is no concern regarding the management of the risks of money laundering and terrorist financing in BiH, and that the risk can be quantified in the category of moderate risk.
The ongoing changes in the legal regulations for banks to conduct financial monitoring make the research on the risk-oriented approach implementation in the Ukrainian banking sector relevant. The ...declining share of information bearing the signs of internal financial monitoring in the total amount of information provided by banks highlights the need to further improve the methods used to assess suspicious financial transactions conducted by banks and the risks associated with them, given the effectiveness of their detection and depth of consequences. The article is aimed to improve the risk-oriented approach in the primary financial monitoring by banks through the substantiated elements composing the system of significant risks associated with money laundering and terrorist financing. While substantiating the elements composing the system of significant risks associated with money laundering and terrorist financing, it is crucial to consider the international risk management standards based on the assessment of threats, vulnerability to threats and their consequences for the bank and national security at all levels. Implementing the following steps: threat identification considering the type and jurisdiction of customers and types of financial transactions and channels for their implementation, justification of banks’ vulnerability to middle and high level threats, significant consequences of money laundering and terrorist financing risks allowed presenting in detail the areas of interest for the bank risk management. The research determined financial transactions subject to the recommendation to use high, increased and traditional prudence while identifying and verifying transactions. The proposed banks’ prudence areas built in reliance on the analysis of the legal framework for combating money laundering and terrorist financing, statistics provided by the State Financial Monitoring Service and the NBU allow banking institutions to focus on the risks posed by money laundering and terrorist financing, which have a significant impact on their activities. Further research should focus on forming a mathematical tool for assessing the bank’s risks in the financial monitoring of money laundering and terrorist financing.
Keywords: risk, bank, financial monitoring, money laundering, terrorist financing.
Formulas: 1; fig.: 5; tabl.: 3; bibl.: 20.
Bitcoin was created in 2008 to serve as an alternative payment mechanism for both the under-banked and un-banked, or those in regions where the formal financial system suffers from broad corruption ...and efficient regulation. However, criminals and terrorists quickly exploited Bitcoin's unique properties, namely its peer-to-peer nature and pseudo-anonymity, to facilitate extensive terrorist financing and money laundering schemes. Government reactions to safeguard national security interests have been extremely varied, ranging from outright bans to passive tolerance. This inconsistency stems from how to effectively classify Bitcoin. On one side are those who argue Bitcoin is a currency, and on the other are those who claim it is a type of asset. In the US alone, these discrepancies have led to a bureaucratic turf war between different regulatory bodies, namely the Financial Crimes Enforcement Network, the Commodity Futures Trading Association, the Securities and Exchange Commission, and the Internal Revenue Service. This study seeks to move beyond the existing legal frameworks, arguing that Bitcoin should be classified as a technology and regulation should rest with private sector technology companies.
How do terrorist groups control their members? Do the tools groups use to monitor their operatives and enforce discipline create security vulnerabilities that governments can exploit?The Terrorist's ...Dilemmais the first book to systematically examine the great variation in how terrorist groups are structured. Employing a broad range of agency theory, historical case studies, and terrorists' own internal documents, Jacob Shapiro provocatively discusses the core managerial challenges that terrorists face and illustrates how their political goals interact with the operational environment to push them to organize in particular ways.
Shapiro provides a historically informed explanation for why some groups have little hierarchy, while others resemble miniature firms, complete with line charts and written disciplinary codes. Looking at groups in Africa, Asia, Europe, and North America, he highlights how consistent and widespread the terrorist's dilemma--balancing the desire to maintain control with the need for secrecy--has been since the 1880s. Through an analysis of more than a hundred terrorist autobiographies he shows how prevalent bureaucracy has been, and he utilizes a cache of internal documents from al-Qa'ida in Iraq to outline why this deadly group used so much paperwork to handle its people. Tracing the strategic interaction between terrorist leaders and their operatives, Shapiro closes with a series of comparative case studies, indicating that the differences in how groups in the same conflict approach their dilemmas are consistent with an agency theory perspective.
The Terrorist's Dilemmademonstrates the management constraints inherent to terrorist groups and sheds light on specific organizational details that can be exploited to more efficiently combat terrorist activity.
In order to prevent and fight terrorism, a new research area has developed called terrorist financing. An important aspect is the financing of terrorism by Non-Profit Organization (NPO), through ...transfer funds, terrorist alliances, abuse of NPOs, terrorist recruitment, and false NPOs and agents. Therefore, the NPO counter-terrorist financing strategy was established, considering four major aspects: warning information indicators, internal management mechanisms, international cooperation and information sharing, and counter-terrorist Financing legislation. This paper provides a new way to supervise the terrorist financing of NPOs. First, actual cases should be collected, and viable warning indicators for regulatory agencies and NPOs should be established. Second, internal management mechanisms should be strengthened to actively prevent terrorist activities within NPOs. Third, given the global activity of NPOs and terrorist organizations, information-led international cooperation must be emphasized. Fourth, from the angle of independent counter-terrorist Financing legislation, the gap should be filled in NPO counter-terrorist Financing legislation.
Complex linkages between violent extremist and organized criminal groups are a defining feature of contemporary African security. As comparisons across the Sahel-Sahara, Lake Chad Basin, and Horn of ...Africa attest, the interactions of these groups vary in terms of how intentional, proactive, and formal they are, and how much they develop on the organizational or individual level. These realities, which express themselves differently across contexts, must all be considered to accurately situate cases on the spectrum of coexistence, cooperation, and convergence that is frequently used in Africa-focused discussions about policy response. The comparisons illustrate two aspects of variation within the spectrum's established categories of cooperation and convergence that deserve further attention: (i) the extent to which cooperation occurs organizationally versus individually, and (ii) the extent to which convergence happens across multiple criminal markets when it occurs. Tracking these aspects of linkage can facilitate classifications of the linkages between violent extremism and organized crime that are based on a more precise and contextualized articulation of the mechanisms through which cooperation or convergence may be in play.
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