PurposeThe purpose of this paper is to examine the divers and facilitators of money laundering in Ethiopia. Specifically, it looks at the risk factors that existed in the country’s economic and political system, which provide an appealing environment for money laundering to grow.Design/methodology/approachThis qualitative study relies on primary data generated from interviewees drawn from the National Bank of Ethiopia, Ethiopian Financial Intelligence Center, Ethiopian Customs Commission, selected financial institutions and certain non-financial businesses and professions and law enforcement agencies, as well as secondary data from government reports, media press, statutes and other online and offline sources.FindingsThis study finds that the risk factors for the growth of money laundering in Ethiopia are highly reliant on the country’s economic and political system. Accordingly, the nature of Ethiopia’s economy, which is cash-intensive, loosely regulated economic growth and the raise associated criminality, the development of underground banking activities, scarcity of foreign currency reserves and the existence of societal demand for illicit goods and services are all risk factors for the growth of money laundering. The raise of an elite cartel model type of systematic corruption, limited institutional capacity to prevent and suppress money laundering and the absence of a national identity card system are also identified as risk factors for the rife of money laundering in Ethiopia. Moreover, the geopolitical location of the country, its porous borders, limited cross-border cooperation and information sharing add further fuel to the vulnerability of the country to money laundering and associated predicate offense.Originality/valueTo the best of the author’s knowledge, this paper provides a first-of-its-kind analytical perspective on the risk factors for the raise of money laundering in Ethiopia.

PurposeThis paper aims to examine the validity of a state’s prohibition on virtual assets in the context of its global commitment to battle against money laundering.Design/methodology/approachThis was empirical legal research exploring how a general lack of expertise to apply a risk-based approach in anti-money laundering strategies might have implications for invoking the Financial Action Task Force (FATF) exclusion provisions in virtual asset regulation.FindingsInvoking the exclusion provisions for banning virtual assets without meeting the prerequisites may put the financial system at risk and make a jurisdiction’s legal obligations appear breached.Research limitations/implicationsAnti-money laundering (AML) policymakers will take precautions and avoid misuse of the liberties they enjoy under FATF exclusion clauses/provisions.Practical implicationsThe results of this study will help ensure more informed decision-making on the legal status and regulation of virtual assets.Originality/valueThe study helps ascertain the limits of privileges accorded to states under FATF exclusion provisions in applying global standards against money laundering.

PurposeThis study aims to apply the modified Walker-Unger model to show the degree of attractiveness of a country for Mexican-based money launderers to send their illicit funds for the 2000–2015 time period.Design/methodology/approachThe modified Walker-Unger model is used to conduct the analysis, as it combines several independent variables related to an illicit financial activity. These allow the researcher to investigate the attractiveness of a market to money launderers and the possible economic effects of money laundering. In total, 13 categories of indicators were used, namely, gross national product per capita; banking secrecy; government attitude; society for worldwide interbank financial telecommunication membership; financial deposits; conflict; corruption; Egmont group membership; language; trade; culture, colonial background; and physical distance.FindingsModel results suggest the preferred destinations for Mexican-based money launderers from 2000 to 2015 were Bermuda (i.e. from 2000–2004), Canada (i.e. in 2005 and 2006) and Monaco (i.e. from 2007–2015).Research limitations/implicationsTiming and availability of reliable data after 2015.Practical implicationsAids in continuing to empirically validate the Walker-Unger model. There is little literature on models that quantify money laundering activity.Social implicationsMay aid policymakers in targeting anti-money laundering policy to more relevant countries.Originality/valueThe first empirical investigation that looks to quantify money launderer activity in Mexico. Contributes to the limited literature of quantitative investigations on money laundering.

Purpose This study aims to examine the direct and indirect effects of professional commitment, customer risk and independence pressure on money laundering risk judgment among bank analysts. Design/methodology/approach This study uses a within-subjects experimental research design and collects primary data via a questionnaire distributed to bank analysts in banking institutions in Malaysia. Findings Results show that professional commitment, customer risk and independence pressure significantly influence money laundering risk judgment (i.e. customer due diligence and money laundering reporting). The results also show significant interaction effects between customer risk and independence pressure in influencing money laundering risk judgment. Practical implications Professional commitment and situational factors are crucial in putting pressure on bank analysts responsible for performing a thorough check and due diligence to minimize money laundering risk to the bank. Social implications As money laundering is lifeblood of crimes, understanding the factors influencing money laundering risk judgment would assist the affected institutions to manage the risk better and contribute towards the fight against crimes. Originality/value This study focuses on money laundering risk judgment. It contributes to understanding the competency of the gatekeepers, such as bank analysts, in practicing professional commitment and dealing with situational factors.

Purpose This paper aims to analyse the anti-money laundering (AML) obligations imposed on bankers as the main reporting entities under the AML regime in Malaysia. Apart from discussing the relevant provisions, several court cases were also examined to identify the problems which arise in the implementation of the law and the risk of dismissal that bankers may face. Design/methodology/approach This paper mainly relies on statutes and court cases as its primary sources of information. It is supported by secondary data to justify the analysis. This paper also uses an analytical descriptive approach to analyse relevant provisions from statutes and to examine current court cases regarding the implementation of the AML obligations on bankers. Findings It is submitted that the AML legislation imposes a significant burden of reporting requirements on the bankers, failure of which may justify the dismissal or termination of their services. In other words, the law has not only altered the way bankers deal with their customers but also poses substantial legal risks to their security of tenure. Indeed, getting the right balance between the need to combat money laundering and the interests of bankers is a difficult exercise. Originality/value This paper provides an analysis of the liability of bankers under Malaysian AML laws. It is hoped that the content of this paper can provide some insight into this particular area for bankers, enforcement authorities, practitioners, academics, policymakers and legal advisers, not only in Malaysia but also elsewhere. The findings of this paper also highlight the risks that bankers may face for non-compliance with the reporting obligations under the AML laws.

Purpose The purpose of this paper is to study the impact of the model of an financial intelligence unit (FIU) and the availability of resources of an FIU on the strength of the anti-money laundering and countering the financing of terrorism (AML/CFT) legal framework and the overall effectiveness of the AML/CFT regime. Design/methodology/approach The authors use FIU specific characteristics to measure the impact on the developed AML/CFT Compliance Index (Jayasekara, 2020a) and AML/CFT Effectiveness Index (Jayasekara, 2020b) in measuring the overall effectiveness of an AML/CFT regime. In addition, the impact of an AML/CFT regime on the cost to exports and gross domestic product are modeled. Findings The empirical results suggest that the model of an FIU is an important determinant of an effective AML/CFT regime. The administrative model of FIU shows a negative relationship with the overall effectiveness of the AML/CFT regime. The availability of resources which was measured in terms of human resources at FIUs shows a significant positive relationship with the effectiveness. However, the model of an FIU and the availability of resources of an FIU are not significant determinants of a sound AML/CFT legal framework. The results further reveal that effective AML/CFT regimes promote economic growth and also international trade by reducing the cost of exports. Therefore, policymakers are required to reassess the administrative model FIU of the country and have to adopt a suitable model which has been assigned more power to implement the regime. Practical implications This study was initially designed to capture more FIU specific variables using a questionnaire to widen the scope of the study. However, the low response rate to the questionnaire forced us to rely on publicly available data on FIU characteristics. Therefore, appropriate FIU specific variables may be developed in future research based on this foundation. Originality/value This paper is an original work done by the author that discusses the FIU specific characteristics on the overall strength and effectiveness of AML/CFT regimes and further extends the use of originally designed AML/CFT Compliance Index and AML/CFT Effectiveness Index.

PurposeThis study aims to define how countries can implement a risk-based approach (RBA) for non-profit organisations (NPOs) by measuring how well certain countries have complied with the Financial Action Task Force’s (FATF) “Recommendation 8, criterion 1” (recommendation [8.1]).Design/methodology/approachThis study combines a comparative analysis methodology with a descriptive analytical approach to compare three member countries of FATF and FATF-Style Regional Bodies (FSRBs). It uses secondary data sources, namely, FATF guidelines on the subject and FATF reports on mutual evaluation reports.FindingsThis study examines the variations in compliance with the FATF recommendation (8.1) among three countries recently assessed by the FATF: the UK, Bahrain and the Russian Federation. Although the UK has completely fulfilled these recommendations, Bahrain and Russia have largely fulfilled them. These variations in compliance are mainly attributed to the uneven level of preparedness in the countries’ commitment to the legislative requirements before the process of mutual evaluation.Originality/valueThis paper offers insight into the progress of legislation and mechanisms (technical compliance) in the three countries with respect to recommendation (8.1). This paper also discusses the evolution of implementing and adopting the RBA among NPOs. This paper concludes with suggestions to other countries in developing a plan that meets the FATF recommendations by considering key factors such as comprehensive assessment of threats to NPOs, periodic reassessment and sharing of success stories.

PurposeThis paper aims to provide a review of Anti-Money-Laundering (AML) after the latest amendments, i.e. Anti-Money Laundering Act of 2020 in Pakistan.Design/methodology/approachThis paper performs a detailed review of AML and related laws and amendments to record notable changes and improvements in the recent amendments and drew a comparison among these legal amendments.FindingsThis paper finds that recent amendments are essential and judiciously crafted to cover the legal clinches, ensuring effective implementation of AML laws and positive expected outcomes for Pakistan.Originality/valueThis paper is unique in the context of the ongoing struggle against money laundering (ML) in Pakistan; covering the legal progress of Pakistan regarding ML, corruption and terrorism financing.

Purpose This paper aims to explore the potential of computer-assisted qualitative data analysis software (CAQDAS) to be used as a corruption investigation tool to help investigators in carrying out their investigative works. Design/methodology/approach By reviewing the literature on qualitative research and fraud investigation, this exploratory study identifies similarities between the two types of inquiries and thus proposing the use of CAQDAS as an innovation in the field of corruption investigation. To demonstrate how a QDA application can support corruption investigators, NVivo is used as a case study from which various key analytical tools are discussed to highlight their potential in supporting a corruption investigation. Findings As a fundamental part of anti-corruption practice in a country, corruption investigation must be planned and executed professionally and adequately. This paper highlights various stages in fraud investigation to identify areas that can be improved with the use of a CAQDAS. Based on the discussion in this paper, the author concludes that the capability of a CAQDAS to assist users in data reduction and data display has the potential to increase the effectiveness and efficiency in various stages of a corruption investigation. Research limitations/implications Based on a self-funded study, this paper only uses a simulation case with a fictitious company to illustrate how a CAQDAS application can be used to support a corruption investigation process. Future studies may benefit from using actual corruption cases in illustrating how such an application can support the investigation process. Practical implications This paper contributes to the innovation in anti-corruption practice by proposing a new framework and tool to develop corruption investigation capacity. Originality/value This paper brings a new perspective into the field of anti-corruption to stimulate innovation in the area of corruption investigation.