How effective are financial sanctions against individuals?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Qualitative Content Analysis ◽  
Content Type ◽  
Political Processes ◽  
Compliance Officers ◽  
Improve Compliance ◽  
Larger Sample ◽  
Practical Implications

Purpose The purpose of this paper is to discuss the role of money laundering methods in circumventing sanctions against individuals. In particular, it shows how politically exposed persons can circumvent sanctions through money laundering mechanisms. Design/methodology/approach A total of 70 expert interviews were conducted, comprising 35 formal interviews with prevention experts and 35 informal interviews with money launderers. By subjecting their responses to qualitative content analysis, concrete ways of circumventing sanctions are identified. Findings Financial sanctions against individuals are highly ineffective, as they can be easily circumvented. To successfully influence political processes, alternative mechanisms are necessary. Research limitations/implications This study’s findings are limited to the perspectives of 70 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time could have yielded different results. Practical implications Identifying the gaps in anti-money-laundering mechanisms should provide compliance officers and legislators with valuable insights into why the current prevention schemes are ineffective and how sanctions against individuals can be circumvented. The findings, thus, highlight the scope to improve compliance mechanisms and the need for other tools to influence political processes. Originality/value The current sanctions against individuals are found to be ineffective means of influencing politics, as they can be easily circumvented. Hence, alternative mechanisms and tools are needed.

How useful are anti-money-laundering efforts in combating bribery?

2020 ◽  
Vol 23 (2) ◽  
pp. 309-314
Author(s):  
Fabian Maximilian Johannes Teichmann
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Expert Interviews ◽  
Content Type ◽  
Compliance Officers ◽  
Larger Sample ◽  
Practical Implications

Purpose The purpose of this paper is to discuss the role of anti-money-laundering mechanisms in combating bribery. In particular, it shows how parties receiving bribes can circumvent the mechanisms currently in place to launder the money they receive for their services. Design/methodology/approach Through analysis of 25 formal expert interviews with prevention experts and 25 informal expert interviews with money launderers from Europe, concrete ways of laundering bribes were found. Consequently, it is suggested that alternative mechanisms are necessary to successfully fight corruption. Findings A combination of more severe punishments and anti-bribery incentives could help to eliminate corruption. Research limitations/implications This study’s findings are limited to the perspectives of 50 interviewees. Hence, a study with a larger sample conducted in different countries or at a different time could yield different results. Practical implications By identifying gaps in existing anti-money-laundering mechanisms, this paper aims to provide compliance officers and legislators with valuable insights into why the current prevention schemes are ineffective and how corruption could be more effectively tackled. Originality/value The findings demonstrate that current anti-money-laundering mechanisms are unhelpful in fighting bribery. Hence, alternative anti-bribery mechanisms are needed.

Methods of bribery in multinational corporations

2019 ◽  
Vol 26 (4) ◽  
pp. 1078-1084
Author(s):  
Fabian Maximilian Johannes Teichmann
Keyword(s):  
Multinational Corporations ◽  
Design Methodology ◽  
White Collar Crime ◽  
Qualitative Content Analysis ◽  
Criminal Activity ◽  
Content Type ◽  
Compliance Officers ◽  
Prior Literature ◽  
Larger Sample ◽  
Practical Implications

Purpose This paper aims to investigate how bribery is conducted in multinational corporations. In particular, sources of funding and methods of transferring bribes are investigated. Design/methodology/approach In all, 100 interviews were conducted with criminals and white-collar crime prevention experts, and responses were subjected to qualitative content analysis. Findings The interviews and survey revealed concrete techniques for creating funds for bribery and transferring bribes to counterparties. The results indicate that the compliance mechanisms aimed at preventing bribery in multinational corporations can be easily circumvented. Research limitations/implications This study’s findings were limited to the perspectives of 100 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time could have yielded different results. Practical implications Identifying the concrete methods of funding and transferring bribes should provide both compliance officers and legislators with valuable insights into criminal activity. By better understanding the specific steps taken by criminals, compliance officers should be able to more effectively combat bribery. Originality/value Whereas the prior literature has focused on the organizations and mechanisms involved in combating bribery, this paper instead explores how criminals avoid detection by taking into account existing compliance mechanisms and criminal perspectives.

An agency theory approach towards bribery

2019 ◽  
Vol 27 (2) ◽  
pp. 160-168
Author(s):  
Fabian Maximilian Johannes Teichmann
Keyword(s):  
Agency Theory ◽  
Multinational Corporations ◽  
Theory Approach ◽  
Content Type ◽  
Compliance Officers ◽  
Improve Compliance ◽  
The Right ◽  
Larger Sample ◽  
Practical Implications

Purpose This paper aims to discuss the role of agency theory in combatting bribery in multinational corporations. It is shown how a combination of bonus and malus payments could help to create the right incentives for agency. Design/methodology/approach Based on the analysis of 15 formal and 15 informal expert interviews with both prevention experts and corrupt individuals, concrete ways of more effectively combatting bribery have been developed. Findings As a result, it is suggested that matrix systems could help to adjust incentives systems to take compliance issues into account. It is found that multinational corporations should eliminate. Research limitations/implications This study’s findings are limited to the perspectives of 30 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time would have led to different results. Practical implications The identification of the potential role of incentive systems in compliance mechanisms is meant to provide compliance officers and legislators with valuable insights into why the current prevention schemes are ineffective. This can help to both improve compliance mechanisms. Originality/value While the empirical findings are based in Europe, the results could be applied globally.

Money laundering through raw diamonds

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
German Speaking ◽  
Three Stages ◽  
Practical Implications ◽  
Combat Money Laundering

Purpose This paper aims to illustrate how illegally obtained funds are laundered through raw diamonds in Austria, Germany, Liechtenstein and Switzerland. Design/methodology/approach To identify specific money laundering techniques involving raw diamonds, this study used a qualitative content analysis of data collected from 60 semi-standardized interviews with both criminals and prevention experts and a quantitative survey of 200 compliance officers. Findings Raw diamonds are extraordinarily suitable for money laundering in European German-speaking countries. In particular, they may be used in all three stages of the laundering process, namely, placement, layering and integration. Research limitations/implications Because the qualitative findings are based on semi-standardized interviews, their insights are limited to the perspectives of the 60 interviewees. Practical implications Identifying gaps in existing anti-money laundering mechanisms should provide compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate. Originality/value While prior studies focus on the methods used by organizations to combat money laundering and how to improve anti-money laundering measures, this paper investigates how money launderers operate to avoid detection, thereby illustrating authentic experiences. Its findings provide valuable insights into the minds of money launderers and combines criminal perspective with that of prevention experts.

Money laundering through exchange offices

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Qualitative Study ◽  
Money Laundering ◽  
Quantitative Research ◽  
Design Methodology ◽  
Prevention Measures ◽  
Content Type ◽  
Compliance Officers ◽  
Research Gap ◽  
Practical Implications ◽  
Insight Into

Purpose The purpose of this paper is to illustrate how money launderers circumvent compliance measures by using exchange offices to launder incriminated funds. Design/methodology/approach The three-step process entailed carrying out unofficial interviews with money launderers, which gave first insight into the issue, followed by expert interviews that were reviewed by means of a qualitative study. The findings of the qualitative study were processed during the subsequent quantitative research. Findings Although exchange offices are a known threat to anti-money laundering efforts, they continue to be highly applicable. As exchange offices are responsible for their own compliance measures, compliance officers employed by other institutions do not encounter money laundering through exchange offices regularly. Research limitations/implications The findings of the study are limited to the experiences of the interviewed experts, which, naturally, are highly subjective. Further, they are geographically limited, as certain areas were not represented in the study. Practical implications During the literature review, a research gap was identified. The present study attempts to partially fill the same. The illustrated findings aimed at facilitating an improvement of anti-money laundering measures. The insights into the minds of money launderers provide valuable information for legislators, compliance officers and authorities. Originality/value Presently, the majority of the literature focuses on the issue of money laundering from a compliance perspective. However, accurately understanding how money launderers circumvent the existing prevention measures requires an exploration of their approaches. To effectively inhibit money laundering, it is necessary to gain a holistic overview of the issue, which entails the observation of both perspectives.

Anti-money laundering and moral intensity in suspicious activity reporting

2018 ◽  
Vol 21 (4) ◽  
pp. 520-533
Author(s):  
Brett Coombs-Goodfellow ◽  
Mark Eshwar Lokanan
Keyword(s):  
Decision Making ◽  
Money Laundering ◽  
Design Methodology ◽  
Moral Intensity ◽  
Content Type ◽  
Compliance Officers ◽  
Moral Intent ◽  
Practical Implications ◽  
Activity Report ◽  
Suspicious Activity

PurposeThis paper aims to examine the influence Jones’ Moral Intensity Model (1991) has on the decision-making process of anti-money laundering (AML) compliance officers charged with reporting suspicious money laundering transactions in Jersey.Design/methodology/approachTen interviews were conducted to elicit participants’ views on the six dimensions of moral intensity and their influence on the compliance officers’ decision to submit a suspicious activity report (SAR) of potential money laundering.FindingsThe findings indicate that the officers’ moral intensity to submit a SAR seems to be heavily influenced by issue-specific contextual factors. Contexts (legal and legislative mandates) seem to have more of an effect on the moral intent and actions of the officers rather than directly affecting the decision to submit a report of a suspicious money laundering transaction.Research limitations/implicationsThe paper lays the groundwork for further work in this area and calls on researchers to develop instruments that can enhance the measurements of the dimensions of moral intensity.Practical implicationsThe setting (AML in the financial sector) is both timely and extremely interesting to keep studying, particularly in Jersey because of its dubious sensitive particularities.Originality/valueThe study is the first to examine Jersey AML sector through the lens of moral intensity. In this sense, the paper poses interesting questions, namely, to explore the dynamic complexities experienced by compliance officers in Jersey to detect and report suspicious money laundering activities and the decision-making criteria of actually submitting a SAR.

2016 FINRA analysis: a record-breaking year for fines

2017 ◽  
Vol 18 (2) ◽  
pp. 1-8
Author(s):  
Brian Rubin ◽  
Adam Pollet
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Disciplinary Actions ◽  
Variable Annuities ◽  
Content Type ◽  
Compliance Officers ◽  
Expert Analysis ◽  
Key Issues ◽  
To Receive ◽  
Practical Implications

Purpose To analyze FINRA’s 2016 sanctions and cases, the issues that resulted in the most significant fines, emerging enforcement trends, and make predictions about key issues for FINRA for 2017 and beyond. Design/methodology/approach Discusses the sanctions and disciplinary actions in 2016 and prior years; details the top 2016 enforcement issues measured by total fines assessed, including anti-money laundering, variable annuities, trade reporting, books and records, and unregistered securities; explains current enforcement trends, including fines of $1 million or more, sanctions against compliance officers, and suitability cases; and analyzes three enforcement topics that will likely continue to receive heightened attention from FINRA in 2017 and beyond: restitution, cybersecurity, and senior investors. Findings The fines ordered by FINRA in 2016 reached an all-time high while the amount of restitution ordered and the number of disciplinary actions remained on par with prior years. Practical implications Firms and their representatives should heed the trends in both the substantial fines FINRA is ordering and the related enforcement issues in the cases FINRA has brought. Originality/value Expert analysis and guidance from experienced securities enforcement lawyers.

The financial intelligence unit and money laundering control in Tanzania

2019 ◽  
Vol 22 (3) ◽  
pp. 543-562
Author(s):  
Eugene E. Mniwasa
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Research Approach ◽  
Institutional Reforms ◽  
Content Type ◽  
Essential Component ◽  
The Law ◽  
Financial Intelligence ◽  
Practical Implications

Purpose This paper aims to explore the role of the financial intelligence unit in Tanzania in fighting against money laundering and its predicate offences, examine its potential in controlling the problem and describe factors that undermine its efficacy. Design/methodology/approach The doctrinal research approach is used to analyse Tanzania’s anti-money laundering law and appraise its effectiveness in facilitating operations of the financial intelligence unit in fighting against money laundering and its predicate offences. The law-in-context approach is applied to interrogate the anti-money laundering law and describe non-law factors that impinge on the efficiency of Tanzania’s financial intelligence unit. Findings The law vests the financial intelligence unit with powers to perform a number of functions that are significant in fighting against money laundering and its predicate offences in Tanzania. The unit has been instrumental in curbing money laundering. The efficacy of this anti-money laundering agency, which is at its infancy stage, is emasculated by law-related, institutional and non-law factors. These factors undercut the potency of the agency. Practical implications There is a need for Tanzania to undertake policy, legislative and institutional reforms to augment the efficacy of the financial intelligence unit. The reforms should be implemented concurrently with other measures, which will enhance the country’s anti-money money laundering regime. Originality/value This paper applies the legal and non-law perspectives to evaluate the effectiveness of the financial intelligence unit as an essential component of Tanzania’s anti-money laundering regime. It proposes law-related and non-law approaches to augment the efficiency of the unit and the country’s anti-money laundering regime in general.

Anti-bribery compliance incentives

2018 ◽  
Vol 25 (4) ◽  
pp. 1105-1110 ◽  
Author(s):  
Fabian Maximilian Johannes Teichmann
Keyword(s):  
Multinational Corporations ◽  
Design Methodology ◽  
Expert Interviews ◽  
Incentive Systems ◽  
Content Type ◽  
Performance Matrix ◽  
Compliance Officers ◽  
The Right ◽  
Larger Sample ◽  
Practical Implications

Purpose This paper aims to discuss an innovative approach to eliminating bribery in multinational corporations. In particular, the concept of using incentive systems to fight corruption is assessed. Design/methodology/approach Based on the analysis of ten formal and ten informal expert interviews with both prevention experts and corrupt employees, a combination of bonus-malus payments is developed. Findings A performance matrix could be used to incentivize both compliance and productivity. Research limitations/implications This study’s findings are limited to the perspectives of 20 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time would have led to different results. Practical implications The identification of gaps in existing anti-bribery compliance mechanisms is meant to provide compliance officers and legislators with valuable insights into how undesirable behavior could be prevented. Originality/value It is found that eliminating the wrong incentives and establishing the right ones could make significant strides in advancing the fight against bribery.

Money laundering through consulting companies

2020 ◽  
Vol 28 (3) ◽  
pp. 485-500 ◽  
Author(s):  
Fabian Maximilian Teichmann ◽  
Marie-Christin Falker
Keyword(s):  
Law Enforcement ◽  
Money Laundering ◽  
Qualitative Content Analysis ◽  
Law Enforcement Agencies ◽  
Content Type ◽  
Compliance Officers ◽  
German Speaking ◽  
Practical Implications ◽  
Combat Money Laundering ◽  
Consulting Companies

Purpose The purpose of this paper is to illustrate how illegally obtained funds are laundered by employment of consulting companies in Austria, Germany, Liechtenstein and Switzerland. Design/methodology/approach A qualitative content analysis of 28 semi-standardized expert interviews with both criminals and prevention experts, and a quantitative survey of 200 compliance officers led to the identification of concrete money-laundering techniques involving the employment of consulting companies. Findings Consulting companies continue to be used for money laundering in European German-speaking countries, especially in the layering and integration stages of the money laundering process, during which the origins of funds are concealed, and the money is integrated into the legal economy. Research limitations/implications Qualitative findings from the analysis of semi-standardized interviews are limited to the 28 interviewees’ perspectives. Practical implications Identification of gaps in existing anti-money-laundering mechanisms provides compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate. Originality/value The existing literature focuses on organizations that combat money laundering and the improvement of anti-money-laundering measures. This paper outlines how money launderers avoid detection. Both preventative and criminal perspectives are considered.

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