Controlling the flow of money or satisfying the regulators?

Harvey, Jackie (2005) Controlling the flow of money or satisfying the regulators? In: The Organised Crime Economy: Managing crime markets in Europe. Wolf Legal Publishers, Nijmegen, The Netherlands, pp. 43-64. ISBN 978-9058501448

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Official URL: http://www.wolfpublishers.com/book.php?id=164

Abstract

Money laundering has been in existence for a very long time. It involves "the processing of criminal proceeds to disguise their association with criminal activities (Boorman and Ingves, 2001: 3). Concern over money laundering (heightened by its association with financing terrorism) arises because it is seen as facilitating illegal activity: in theory, cutting off access to the funds, combined with the legal seizure of the proceeds of criminal activity, removes the financial incentive to commit organised crime.

A major problem for researchers within the field is that limited data and the resultant lack of understanding of the criminal fraternity, hamper the development of academic analysis of the true extent of money-laundering activity. In consequence, the ‘alarmist’ notion of it being of major significance cannot be objectively challenged. Unable to measure the true extent of money laundering means that it is equally difficult to determine the effectiveness of policy measures advocated to deter money launderers. It is proposed that there has been a shift away from reducing opportunities for money laundering (and predicate crime) towards an emphasis on the demonstration of compliance with systems and procedures (the ‘tick-box’ culture) put in place with the expectation that they will prevent money laundering from occurring.

Internationally, the fight to contain money laundering has focused attention on countries identified as ‘weak links’, primarily because of their inability (whether or not voluntary) to demonstrate internationally acceptable standards of compliance. This chapter considers the impact and cost of money laundering regulation and looks at the rationale and implication of the focus on ‘weak links’ in the international financial system. In particular, a preliminary investigation is carried out into the specific characteristics of countries that have been targeted by the international community.

For the purposes of this research, information has been compiled from a range of recognised international sources for some 224 countries and territories for which data was available. Within this, countries have been grouped into three different classifications according to whether they have been identified as: ‘opaque’; as an identified money laundering country; or, as neither of these. Various economic, financial and political characteristics of these groupings are then considered in order to identify common features. It is recognised that this is very much an initial survey and that the level of analysis remains superficial; however, the intention is to identify areas that might warrant more detailed investigation in the future.

Item Type: Book Section
Subjects: N200 Management studies
Department: Faculties > Business and Law > Newcastle Business School > Accounting and Finance
Related URLs:
Depositing User: Jackie Harvey
Date Deposited: 30 Jan 2015 15:08
Last Modified: 22 Dec 2016 09:35
URI: http://nrl.northumbria.ac.uk/id/eprint/21275

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