Anti-Money Laundering by Group-Aware Deep Graph Learning

In the context of increasing challenges in the fight against financial crime, this paper analyzes the significance of forensic accounting in identifying suspicious transactions within the financial sector, with the aim of strengthening efforts to combat money laundering in Bosnia and Herzegovina (BiH). Money laundering is a complex form of financial crime that can be committed by individuals or large organizations. This form of financial crime is known from individuals to large organizations, and over time, different methodologies for carrying it out have developed. The detection and prevention of money laundering and the financing of terrorist activities in BiH are regulated by the Law on the Prevention of Money Laundering and Financing of Terrorist Activities (“Official Gazette of BiH,” No. 13/24), as well as the Rulebook on the Implementation of the Law on the Prevention of Money Laundering and Financing of Terrorist Activities (“Official Gazette of BiH,” No. 41/15 and 24/23). This paper aims to identify weaknesses in the financial and regulatory oversight systems in BiH. It also explores the level of understanding of forensic accounting techniques and money laundering mechanisms within organizations in the country, and assesses their impact on the overall effectiveness of anti-money laundering efforts.

It is well known that with money laundering activities, offender can hide the origin of money or property proceeds of crime, and thus they can enjoy and use the proceeds of the crime freely. Money laundering actors always try to avoid tracking their crime proceeds by various means, including taking advantage of the weaknesses of existing laws and regulations. Efforts to eradicate the crime of money laundering still have obstacles that cause pros and cons within the law enforcement environment itself. Are the Corruption Crimes investigators and the Prosecutor's Office able to uncover the Corruption Crime of Money Laundering that occurred and how is the investigation model for the Crime of Money Laundering able to confiscate the assets of the perpetrators in the corruption case? Until now, investigations into the crime of money laundering have not found a genuine model as a step forward in eradicating money laundering crimes. Prevention of money laundering must involve all existing components, namely the superstructure (government), infrastructure (institutions/institutions dealing with money laundering), and sub-structure (society and non-governmental institutions).

Banks and other financial institutions are required by law to comply with AML requirements to guarantee they do not facilitate money laundering. However, financial institutions are exceptionally susceptible to money laundering activities in Malaysia. With this concern, this project aimed to identify the determinants which contribute to money laundering activities among commercial banks in Malaysia. Since there are only a few studies have analysed various factors that influence money laundering, this study intends to achieve the aim of the study which is to figure out the level of influence that the factors identified as independent variables on the dependent variable, money laundering. In this study, technology, legal framework, income, and ethical behaviour are acknowledged as the independent variables. A total of 102 survey questionnaires were delivered to commercial bank employees via a convenience sample strategy. Descriptive and inferential statistics were compiled by entering the replies of a total of 102 respondents one by one into SPSS. The results revealed that there is a positive relationship and correlation between all four independent variables; technology, legal framework, income and ethical behaviour towards the dependent variable, money laundering. Consequently, the null hypothesis formulated for this research has been disproved, however, the alternative hypotheses have all been accepted and validated by the data analysis conducted. In addition, this research is claimed to be capable of resolving money laundering difficulties and educating commercial banks on how to identify and prevent money laundering in their organisations.

Purpose The purpose of this paper is to decipher the law relating to cybercrimes regulation and benchmarking best practices that could be adopted to address regulatory weaknesses in some countries. In many countries, cybercrimes regulation is undermined by a lack of robust regulatory regimes. The few regimes that are available are fragmented with no coherent global strategy to deal with these offences across countries and regions. There is a lot of scholarly literature to corroborate the fact that lack of requisite laws on cyber and financial crimes has rendered states lame ducks when faced with well-organized and resourced criminal organizations. Design/methodology/approach This paper articulates intricacies of regulating money laundering and cybercrimes using data from selected African countries and beyond. Generic issues on financial crimes, cybercrimes, case law and policy documents drawn from different jurisdictions have been examined based on the objectives of the study. Cybercrime activities and anti-money laundering (AML) regulatory models have been evaluated drawing on experiences of selected countries in Africa and other countries. Questions whether suspicious activity reports are appropriate as a model to counter incidences of cybercrime activities or whether other options should be considered were also examined. Most notably, the risk-based assessment model such as profiling of high-risk clients rather than reporting every transaction will be compared and possibly suggested as a suitable alternative in financial crimes regulation. The authors have evaluated the data and AML regulatory approaches and other policy measures to curtail the foregoing threats. There is a possibility that AML tools used by financial institutions and banking activities could be used to prevent the growing threat of cybercrimes. The paper has also been enriched by case studies of tenuous legal systems and fragmentation of laws on cybercrimes and financial crimes and how these gaps have been exploited to fuel incidences of illicit criminal activities around the globe. The paper has also used empirical data including visits to banks and financial institutions on the nexus between the threat of cybercrimes and money laundering prevention. The authors have been selective, evaluating cases from 2000s to date. This timeline was particularly important because of the increased incidences of computers and money laundering threats globally. After analysing the data, the authors were able to delineate that there is a close connection between the foregoing two crimes, how they operate in practice, differences and similarities in the counter-measures used to mitigate their negative effect globally. Thus, in the authors’ contention, this is a novel study that is likely to spur farther research on law and policy against cyber and AML crimes not only in Uganda but also in other jurisdictions. At the same time, the findings of the study could complement, and perhaps also complete, the work of scholars who have written papers on cybercrimes to advocate for regulatory changes fight against these offences. The study will also complement the work of other researchers who have challenged the segregation of cybercrimes and financial crimes in local and international regulatory discourses. This research aims to make a significant contribution to the study of cybercrimes and how they are regulated in international law. Findings The findings of the paper have confirmed that the high incidences of money laundering and cybercrimes today are partly fuelled by inherent weaknesses in the global regulatory system and partly fuelled by weaknesses at an individual state level. Many countries have enacted a raft of anti-cyber and AML legislation but this notwithstanding, these laws have not been used to stem cross-border crimes globally. This is partly explained by the fact that many enforcement institutions lack the requisite capacity to institute measures through which to implement engendered laws and policies easily. The regulatory capacity of many countries has been eviscerated by deficiencies in infrastructure and systems.

PurposeDue to their particular nature, virtual assets (VA) are vulnerable to financial crimes such as money laundering and if the appropriate legal mechanisms are not established, this may result in the financial collapse of various economies. To this effect, best practices and standards have been published by some international organisations such as the Financial Action Task Force and IMF which are now domesticated in the national laws of several countries. Therefore, the purpose of this study is to analyse the anti-money laundering (AML) legislative framework in the context of VA in three countries, namely, Mauritius, Japan and South Africa.Design/methodology/approachTo achieve the research objective, the Mauritian AML laws in the context of VA were compared with the corresponding laws of some other countries, namely, Japan and South Africa. As such, a qualitative research method was adopted. In particular, the black letter approach was used to examine the relevant laws of these countries. A comparative analysis was conducted concerning the relevance of AML laws for each country when dealing with VA with the view of suggesting recommendations for Mauritian stakeholders to adopt to enhance the existing AML legal and regulatory framework.FindingsThe comparative study conducted has revealed that there are both similarities and divergences among the AML framework of the three countries further to which this research recommends that the Mauritian laws must be amended concerning the duration of information storage on VA, the definition of VA, advertisement by VA service providers and the electronic submission of annual reports. The Mauritian regulatory bodies also need to play a more active role in their joint collaboration to monitor suspicious VA transactions to combat money laundering.Originality/valueAt present, this study will be among the first academic writings on the efficiency of AML laws in the context of VA in Mauritius and also, because existing literature is quite scarce on assessing the adequacy of AML legislation in developing countries, this research aims at filling in the gap in literature. This 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.

Money laundering is a global threat to financial institutions especially the banking industry since it may weaken and expose the institutions to serious risks such as operational, legal and reputational risks. Against this background, the objectives of the study are to analyse the current practice on the prevention of money laundering in selected banks in Malaysia, to investigate the barriers to the implementation of effective Anti-Money Laundering (AML) regulations and to identify the ways to improve the implementation of AML in Malaysia. The study was conducted using qualitative method via interviews with 6 respondents from 6 Islamic & Conventional banks in Malaysia. The preliminary findings showed that the banking institutions’ current practice is fully complying with AML regulations under the AMLA 2001. The findings also demonstrated that the barriers to effective implementation of AML regulations are in line with those of previous study, which are lack of expert staff as the top factor together with an additional factor, which is lack of customers’ education and awareness on money laundering. Hence, to improve the implementation of AML in Malaysia, this study suggested to firstly strengthen the collaboration with government and relevant authorities to ensure strong enforcement action is taken against the criminals. Secondly, collaboration of BNM with banks and local media to increase public awareness and education on financial crime. Thirdly, to invest on employee training, upgrading system management as well as sufficient resources in compliance unit and finally to intensify the “Three Lines of Defence” in Bank Risk Management.

Trade-based Money Laundering, a new form of money laundering using international trade as a signboard, always appears along with speculative capital movement which has been accepted as the most concerned and consensus incentive giving rise to the collapse of the financial market. Unfortunately, preventing money laundering is very difficult since money laundering always has a plausible trade characterization. To reach this goal, supervision for regulator and financial institutions aims to effectively monitor micro entities’ behavior in financial markets. The main purpose of this paper is to establish a monitoring method including accurate recognition and classified supervision for Trade-based Money Laundering by means of knowledge-driven multi-class classification algorithms associated with macro and micro prudential regulation, such that the model can forecast the predicted class from the concerned management areas. Based on empirical data from China, we demonstrate the application and explain how the monitor method can help to improve management efficiency in the financial market.

Purpose – This paper aims to highlight present strategies to prevent money laundering in Dubai. Design/methodology/approach – Thirty semi-structured interviews were conducted with Anti Money Laundering Suspicion Cases Unit (AMLSCU), Anti Organized Crime Department (AOCD) and Central Bank employees. Findings – This paper shows that AMLSCU, AOCD and Central Bank employees are aware that future strategies to prevent money laundering are needed. Research limitations/implications – Limited available secondary data and cases of money laundering. Originality/value – Interviews with key personnel in main organisations tasked with preventing money laundering in Dubai.

Objective: to increase the effectiveness of countering the use of typical criminal money laundering schemes by identifying the technological and legal vulnerabilities of the DeFi infrastructure: decentralized exchanges, blockchain bridges, decentralized wallets, and privacy-enhanced currencies.Methods: general scientific (analysis and synthesis, induction and deduction, theoretical modeling, legal interpretation) and special methods of scientific cognition (structural-functional, constructive, situational, innovative, target-oriented, program-target, and risk-oriented).Results: the main trends in the development of money laundering using decentralized finance were outlined; the determinative significance of DeFi technological characteristics in the genesis of money laundering was revealed; the main types of money laundering using decentralized finance were identified; the schemes of committing crimes were studied and the criminogenic potential of DeFi infrastructure (decentralized exchanges, blockchain bridges, mixers, privacy-enhanced tokens, etc.) was assessed.Scientific novelty: it is proposed to consider money laundering using DeFi as a special type of digital financial crime. The article proposes the author’s typology of money laundering, substantiates the idea that the matrix of traditional financial regulation and AML standards cannot be applied to decentralized finance. It is argued that prevention of money laundering using decentralized finance should be carried out in close connection with the identification of risk indicators and the development of effective control measures at the points of entry of criminal incomes to centralized exchanges.Practical significance: the analysis of typical mechanisms of money laundering using DeFi allows a systematic approach to the organization of early crime prevention and can potentially become the basis to develop recommendations for financial intelligence and monitoring services.

After the analysis, the authors of the study suggest their interpretation of “economic security”. They also view Latvian banks as one of the most important elements of state financial and economic security. The article focuses on the fight against money laundering. The article shows the use of Latvian normative acts on the prevention of criminal schemes for money laundering. The authors propose mechanisms for effective blocking of suspicious accounts in commercial banks in Latvia and suggest methods for their implementation in practice. As a result of these methods, criminal communities will not be able to bypass the blocking of accounts in commercial banks established by the law enforcement agencies. The arrested funds will be able to replenish the budget of the Republic of Latvia.

This study explores the transformative role of artificial intelligence (AI), particularly machine learning (ML), in enhancing the detection and prevention of money laundering and fraud within the U.S. financial industry. The study aims to analyze how AI-driven techniques can significantly improve the accuracy, efficiency, and scalability of fraud detection systems. The study focuses on examining various machine learning algorithms, including supervised techniques like logistic regression and decision trees, as well as unsupervised methods such as clustering and anomaly detection. These techniques are utilized to analyze historical data, detect patterns, and identify suspicious transactions or fraudulent behaviors in real-time. The research method includes a comprehensive review of existing case studies and literature on AI applications in fraud detection, highlighting successful implementations of ML models in financial institutions. The findings reveal that machine learning models, such as random forests and support vector machines, have proven effective in detecting and preventing fraudulent activities with high precision and recall rates. Furthermore, the integration of AI with real-time data analysis capabilities enables continuous monitoring and immediate detection of irregularities. The study concludes that financial institutions in the U.S. must leverage AI advancements to enhance risk management systems, improve fraud detection, and mitigate the risks of money laundering. By adopting machine learning algorithms, financial organizations can stay ahead of emerging threats, ensuring the security of their operations and customer assets. Keywords: Artificial Intelligence, Machine Learning, Money Laundering, Fraud Detection, U.S. Financial Industry.

Artificial Intelligence (AI) is one of the leading technologies that has begun to attract attention in the financial sector across various regions worldwide, including Southeast Asia. One potential application of AI is its ability to automatically detect specific data or situations within an electronic system, which can be utilized to identify money laundering activities. However, this cutting-edge technology may also result in certain unintended legal implications. The purpose of this study is to explore the potential and legal challenges in utilizing AI for the detection and prevention of money laundering. This research employs a normative legal research method to examine the legal implications of AI utilization in efforts to prevent and combat money laundering. The analysis reveals that significant normative issues persist regarding the legal certainty of AI applications in general, which poses complex challenges when coupled with specific legal implications, such as consumer protection and the safeguarding of privacy and data rights. This study proposes a legal development model that emphasizes balancing the efforts to prevent and combat money laundering with the rights of financial service users to maintain the integrity of the financial system.

PurposeThis study aims to investigate the impact of FinTech on money laundering within the context of Nigeria. The motivation stems from observations suggesting that FinTech platforms might be used for illicit money transfers, particularly from developed to developing economies. While existing literature predominantly highlights the positive aspects of FinTech, there's a dearth of studies addressing its potential association with money laundering. Current understanding of this relationship relies heavily on anecdotal evidence derived from reported or convicted cases. Thus, the primary goal of this study is to analyze the influence of FinTech on money laundering while also considering the moderating effects of financial regulation and financial literacy as perceived by users. The research delves into regulatory perspectives concerning money laundering and FinTech.Design/methodology/approachTo fulfill the study's objectives, a quantitative research design is used. A survey of 248 FinTech users in Nigeria is conducted using structured questionnaires. Data collected from the questionnaires is analyzed using partial least square structural equation modeling (PLS-SEM).FindingsThe quantitative analysis revealed a significant relationship between FinTech and money laundering and that financial regulation moderates the relationship between FinTech and money laundering in Nigeria, but such was not established with respect to financial literacy. The results of the quantitative approach that uses secondary data are consistent with the qualitative approach. FinTech the results indicate the presence of technology induced money laundering in Nigeria. Regulating technology-based anti-money laundering poses serious challenges for developing countries due to the absence of specific laws that mitigate the threats.Research limitations/implicationsThe paper focuses on Nigeria as a case study, which may limit the generalizability of the findings to other countries with different FinTech ecosystems, regulatory frameworks and financial literacy levels.Practical implicationsThe finding is useful in developing guidelines and regulations by policymakers and strategies by practitioners in relation to FinTech, money laundering, financial regulation and financial literacy. On the basis of the above, the authors recommend regulation at the national and industry level to mitigate the adverse effect of technology on money laundering. Thus, multilateral partnerships can help in tackling tech-induced money laundering through strengthened cooperation.Social implicationsMoney laundering risks: The study highlights that FinTech, while beneficial, also poses significant risks for money laundering activities, especially in developing countries like Nigeria. Regulatory Importance: It emphasizes the critical role of financial regulations in mitigating the risks associated with FinTech and money laundering. Financial Literacy: The paper suggests that financial literacy does not significantly moderate the relationship between FinTech and money laundering, indicating the need for stronger regulatory measures rather than relying solely on financial literacy. Policy Formulation: The findings are crucial for policymakers to formulate strategies that balance the benefits of FinTech with the need to prevent money laundering and ensure financial system integrity.Originality/valueThis research presents a novel approach to methodology, specifically focusing on the qualitative research design, addressing population, sampling techniques and data collection methods. It emphasizes techniques aimed at ensuring measurement quality and achieving research objectives. Data collection used survey questionnaires, while analysis involved both statistical package for social science (SPSS) and PLS-SEM. SPSS facilitated descriptive and preliminary analyses, while PLS-SEM confirmed measurement quality and tested hypotheses. Ethical considerations were paramount throughout the research process, underscoring the commitment to maintaining originality in research endeavors.

The state of anti-fraud and AML measures in the banking industry

<em>The Notary's participation in preventing money laundering is to report to PPATK when they know of suspicious financial transactions related to the deed they made. The Notary's position as a whistleblower in the event of suspected suspicious financial transactions as an effort to prevent money laundering has not violated the principle of confidentiality of position. Instead, the Notary must apply the precautionary principle. Notary as the reporting party is an implementation of its obligations stipulated in Article 16 paragraph (1) point an of UUJN, namely acting trustfully and honestly. The State appoints notaries to serve the public in civil Law. Therefore Notaries must also take care not to let the State be harmed by attempts to disguise money from criminal acts. Notaries with this submit to higher interests. This is so that Notaries do not get involved in money laundering cases because they are considered to help carry out a criminal act</em>