Journal of Money Laundering Control

To what extent is the UK's anti-money laundering and asset recovery regime used against organised crime? : Table of Contents

Peter A. Sproat — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – Politicians justified the introduction of the illiberal and liberal parts of the UK's anti-money laundering and asset recovery regime by reference to the extra-ordinary threat posed by organised crime. This paper attempts to evaluate the extent to which the financial measures contained in the Proceeds of Crime Act (POCA) 2002 and the Serious and Organised Crime and Policing Act 2005 are actually used against this threat. Design/methodology/approach – The objective is achieved by reference to four distinct datasets found on the use of these measures. The first consists of the regular, usually monthly, bulletins on the Proceeds of Crime produced by the Assets Recovery Agency (ARA). The second – which reveals the length of sentences given to those convicted of money laundering offences under the POCA – was gathered from the Financial Action Task Force, the Home Office and Justice Office in Scotland. The third consists of the value of the cases which had been, and which were being, dealt with by the ARA at the time the National Audit Office produced it's report on the institution. The fourth is the number of financial reporting orders which have been imposed upon criminals, follows the discovery of an earlier version whilst examining parliamentary records. Findings – The triangulated results suggest that the POCA powers – originally used by use against organised crime – were used against this alleged threat only on a small minority and number of occasions. Research limitations/implications – This infrequent use raises major questions of either the ability of the policing agencies including the Serious and Organised Crime Agency to take on organised crime and/or the credibility of those who exaggerated a threat of organised crime to justify the (often illiberal) powers. Originality/value – This paper questions whether the POCA will achieve one of its original aims. It will interest politicians and practitioners concerned with the combating of organised crime and/or anti-money laundering and asset recovery as well as criminologists and those interested in civil liberties.

The costs of implementing the anti-money laundering regulations in Sweden : Table of Contents

Dan Magnusson — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – The aim of this paper is to estimate the costs of implementing the anti-money laundering regulations in Sweden. Design/methodology/approach – The banks are the central institutions in this respect and the paper shows that the costs of the banks in Sweden amount to 400 million SEK yearly. The paper is based upon interviews with a sample of banks and bank statistics. Findings – There are big deficiencies in the Swedish legal regulations. For example, banks have no right to freeze the money in suspicious transactions. There are also deficiencies in the legal regulation systems that make it possible for unserious companies to transfer money on behalf of criminals by using the normal retail banking system. The resources of the supervising authorities are insufficient. The results of the regulations are meagre seen in relation to the costs of the banks for the implementation of the regulations. One argument against this assertion about inefficiency is that the regulations have preventive effects. There is nothing in this project that gives evidence for any noteworthy preventive effects of the regulations upon the original criminality or terrorism. Why should accept a system that costs substantial sums of money and has other negative effects just because it might have some uncertain positive effects? It seems to be a better strategy to develop a system whose effects are measurable. Originality/value – Very little research about the costs of the anti-money laundering regulations has been done so far and this paper is entering a new field of research.

Not only banks: Criminological models on the infiltration of public contracts by Italian organized crime : Table of Contents

Stefano Caneppele, Francesco Calderoni, Sara Martocchia — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – The paper aims at expanding knowledge on the presence of organized criminal groups in public contract procurement in the south of Italy. It seeks to highlight how the capabilities of law enforcement agencies could be enhanced by means of criminological models. Design/methodology/approach – The paper sets out a criminological model with which to assess the general and specific risks of the infiltration of public procurement in the south of Italy by organized crime (OC). Findings – According to the geographical risk assessment, infiltration by OC of public procurement seems to be widespread in some areas of south Italy, especially Sicily, Calabria and Campania. On the other hand, the specific risk may increase according to certain features of the company and its representatives, the value of the contract, the low specialization of the activities required by the public contract. Originality/value – The paper describes a criminological model with which to assess the general and specific risk of infiltration by OC of public procurement in south Italy.

The search for crime money – debunking the myth: facts versus imagery : Table of Contents

Jackie Harvey — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – The purpose of this paper evolves from a seminar that look place in July 2008 aimed at uncovering the issues facing agencies tackling criminal money management and money laundering policy and compliance. The event brought representatives from financial firms and law enforcement agencies together to debate issues with academics. Design/methodology/approach – The paper rehearses the main arguments arising from the seminar underpinned by appropriate literature prior to introducing the other papers included in the special edition. Findings – The objective is to draw attention to the importance of establishing evidence-based building blocks of facts, rather than threats and imagery that should be used to inform policy makers. Practical implications – Policy makers need to pay attention to the findings of objective empirical research and use theses to inform policy making. Originality/value – The special edition is of value to academics and policy makers, bringing together, as it does, research that is taking place across Europe.

Hot money, hot stones and hot air: crime-money threat, real estate and real concern : Table of Contents

Petrus C. van Duyne, Melvin R.J. Soudijn — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – The purpose of this paper is to generally express concern about the threat of crime-money to the real estate sector and the lack of evidence coming forward from research and law enforcement. Design/methodology/approach – In addition to a review of the literature, this research project analysed the confiscation database of the Dutch prosecution office. From this base, the real estate confiscations from 2000 onwards were selected and analysed. The database management of the prosecution office proved to be extremely negligent. Findings – The results could not substantiate the general concern that the crime-money from the “underworld” was a real threat to the real estate market. Criminals did spend money on buying houses, sometimes big villas and a few of them had more property which was let. But this small financial criminal elite was widely spread over time and space. Research limitations/implications – This research has to be continued on a cross-country comparative basis, for which the first steps have been taken. In addition, the database analysis has to be complemented with an in-depth criminal file analysis. This has started as a follow-up study too. Practical implications – The first practical outcome is that more must happen to lift “evidence based policy making” from its state of empty rhetoric: with the present database management there is no such a thing as “evidence base policy making”. The second practical implication is that crime-money and laundering as a cross-border phenomenon remains hardly understood as long data comparison are impossible due to the lack of common databases, which in addition are internationally polluted. Originality/value – The paper is really new as there are no precedents thus far. This is regrettable, as research needs a stimulating surrounding. However, few scholars step forward while the law enforcement agencies are most reluctant to share data, even if anonymised.

Ten myths about terrorist financing : Table of Contents

W.A. Tupman — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – The purpose of this paper is to present ten myths of terrorist financing policy. Design/methodology/approach – It is argued that post 9/11 literature on terrorism misunderstands the relationship between the component parts of a political movement with an armed wing and thus misrepresents the nature of terrorist financing applies the literature on crime as a business to policy on terrorist financing and concludes that there are loosely-organised networks that engage in the fund-raising processes of the political movement as a whole as well as its armed wing. Findings – Financing methods vary with type of group and over time. That terrorist/paramilitary funding increasingly parallels the business of organised crime and that what is claimed to be known about terrorist funding is mostly erroneous. That funds seized have not been primarily for terrorist financing and that the seizure has done more harm than good. Practical implications – Thought needs to be given to the impact of funding seizures more that simply in terms of newspaper headlines. Originality/value – More effective impact can be made upon terrorist financing if a more complex approach is taken, rather than perpetuating the existing myths, which alienate more communities than they deter terrorists.

Compliance and AML in Belgium: a booming sector with growing pains : Table of Contents

Antoinette Verhage — Sun May 10 14:15:05 BST 2009

Abstract:
Purpose – The purpose of this paper is twofold: first, the paper will map Belgian compliance officers' practices and challenges, and second, it makes an attempt to assess the effectiveness of their input in the anti-money laundering (AML) chain in Belgium: what are actual results of the fight against money laundering? Design/methodology/approach – The research starts from a criminological point of view, studying the preventive AML-policy by focusing on the compliance function in banks. In order to study this preventive approach more concretely, a survey was sent to Belgian compliance officers, asking about their practices. Second, the available statistics on 13 years of AML in Belgium were studied. Findings – The function of compliance officer implies a number of challenges or “growing pains”; problematic access to information, lack of feedback from the authorities, limited investigative means. Furthermore, although the investments of private organisations in AML have been substantial, the outcome of the AML chain seems modest. Research limitations/implications – This paper reflects the first phase of an on-going research (2006-2009). The results presented here are therefore preliminary. Originality/value – Belgium implemented a regulatory framework in 2001, obliging the installment of a compliance function within banks. The value of this research lies in the fact that this booming professional group has never been subject of research before, even though they play a crucial role in AML in particular and crime fighting in general. It is therefore of great importance to study compliance officers' views, practices, and opinions in order to get a grip on this new type of “policing”.