The concept of financial monitoring as a set of measures carried out by the entities of primary and state financial monitoring in the field of prevention and counteraction to separatist funding ...(article 110-2 of the Criminal Code of Ukraine), legalization (laundering) of criminally obtained property (article 209 of the Criminal Code of Ukraine), and terrorism funding (article 258-5 of the Criminal Code of Ukraine) is developed and proved.
The relationship between the categories of «terrorism» and «finance» is determined in the following areas: money paid to terrorists for refusing to commit violence acts; covert funding of terrorist organizations by certain states, non-governmental organizations, and criminal groups; «money laundering» and its introduction into legal circulation; creation of own groups in commercial, credit and financial institutions by terrorist organizations; ‘launderingof money’ obtained as a result of criminal activity.
The risks in the system of prevention of terrorism and counteraction to legalization of criminally obtained proceedsare outlined. They were defined as the following: non-transparent funding of political parties; the share of cash resources addressed to the mentioned criminal activity; «outflow» of capital; absence of a clearly defined sectoral risk assessment of the entities of primary financial monitoring in the field of prevention and counteraction to legalization (laundering) of criminally obtained proceeds.
It is offered to include the risk of terrorism and separatism funding through deposit-taking corporations tobanking risks.
An attempt has been made to accumulate the majority of the latest achievements (as legislative, theoretical and research aswell as applied ones) on the issues of legal regulation of the studied procedural, financial and legal relations, on the basis of which scientific views are proved and proposals for improving regulations in this area are worked out.
Keywords: monitoring, banks, covert investigative actions, bank accounts monitoring, terrorism funding, banking risks, financial and legal relations.
JEL Classification E42, E52, G28, K13, K14
Formulas: 0; fig.: 1; tabl.: 0; bibl.: 16.
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
This study aims to determine the performance of the Pakistani financial intelligence unit in combating money laundering/terrorist financing in local and global contexts.
...Design/methodology/approach
The study used a qualitative research design. The objective is achieved by critically examining the Anti-money Laundering Act and its relevant clauses concerning the financial monitoring unit and other related legislation. Further, empirical data was collected through semi-structured interviews with chief compliance officers from regulated entities, regulators and premier law enforcer.
Findings
The performance of the financial monitoring unit has severe issues concerning the dissemination of financial intelligence due to its time taking behaviour, non-sharing of feedback with reporting agencies, dearth of international cooperation, lack of trained and relevant personnel and financial constraints.
Originality/value
To the best of the authors’ knowledge, this is a maiden study concerning financial monitoring unit in Pakistan.
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.
The objective of this paper is to conduct a critical analysis of whether there is, or could be an incremental use of cyber in the raising and transfer of terrorism finance, compared against ...traditional terrorism finance practices already in place. Data was collected through semi-structured interviews with subject matter experts. They were initially dismissive of any significant use of cyber within terrorism finance, whilst acknowledging that the lack of quality data means that there may be more terrorism finance activity within the cyber domain than is empirically known. Some participants offered examples of how cyber might be utilised by providing impromptu 'what if' scenarios. We suggest that this may be symbolic of how primitive the thought process around the current and future use of cyber in terrorism finance is. It was also acknowledged that the current gap in empirical data might be addressed through bespoke training of both security services personnel and wider organisations in identifying terrorism finance 'red flag' indicators.
Purpose
This paper aims to inform the readers about the preferred type of financial intelligence for early detection of terrorist financing activities.
Design/methodology/approach
Literature review ...methodology was adopted to find the existing approaches of financial intelligence and logical reasoning was applied to sort out what type of financial intelligence is more preferable for early detection of terrorist financing activities.
Findings
It was found that proactive financial intelligence executed through financial intelligence tools is the most preferred type of financial intelligence for early detection of terrorist financing activities.
Research limitations/implications
The research will pave the way for further research on how to design financial intelligence tools for the early detection of terrorist financing activities.
Practical implications
The financial intelligence units will use the preferred type of financial intelligence for the early detection of terrorist financing activities.
Social implications
It will help to establish peace in the society by thwarting terrorist conspiracies because early detection of terrorist financing through financial intelligence tools will stop the flow of funds to and from terrorists.
Originality/value
The originality of the paper lies in distinguishing proactive financial intelligence from reactive financial intelligence.
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.
En este artículo se va a analizar el intercambio de información entre la Unión Europea y los Estados Unidos para luchar contra la financiación del terrorismo dentro del acuerdo TFTP: “Acuerdo entre ...la Unión Europea y los Estados Unidos de América relativo al tratamiento y la transferencia de datos de mensajería financiera de la Unión Europea a los Estados Unidos a efectos del Programa de seguimiento de la financiación del terrorismo”. Así pues, en primer lugar, se hará una pequeña introducción de la situación actual de la lucha contra la financiación del terrorismo en Europa. En segundo lugar, analizaremos los acuerdos de intercambio de información entre Europa y Estados Unidos. En tercer lugar, nos detendremos en el proyecto en ciernes del sistema europeo de seguimiento de la financiación del terrorismo (TFTS), y, ya, por último, en las conclusiones intentaremos realizar un análisis crítico de la situación actual y cómo creemos que se desarrollará este intercambio de información dentro del marco del TFTP y del TFTS en un futuro próximo.
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