A critical analysis of the cross-border financial crime risks inherent in the African continental free trade area

Ehi Eric Esoimeme

Journal of Financial Crime, 2023, vol. 31, issue 5, 1067-1081

Abstract: Purpose - This paper aims to provide authorities managing free trade zones, business enterprises, financial institutions and dedicated free zone customs, police and immigration command assigned to deal with aspects of movement of goods and persons in and out of the free zones with a clear understanding of the cross-border financial crime risks associated with the African Continental Free Trade Area and the risk control measures that combines human intelligence with advanced technology to combat cross-border financial crimes in the African Continental Free Trade Area. Design/methodology/approach - A range of research activities would be used in this study. In addition to a sweeping literature review of academic, official studies and media writings, the main focus is on critically evaluating and analysing primary data by searching and collecting statutes, court cases, administrative rules and regulations and policy documents. Findings - This paper identified bribery and corruption; modern slavery; and trade-based money laundering as the financial crime risks that are of priority concern to African Continental Free Trade Areas and demonstrated how countries can assess and mitigate these risks through adequate policies, procedures and controls including appropriate compliance management arrangement and adequate screening procedures to ensure high standards when hiring employees; corporate transparency; training on managing incidents of modern slavery, forced labour and third-party exploitation; and appropriate monitoring framework for trade-based money laundering activities. Originality/value - While many authors have written research papers on intra-African trade, none of those research papers explained how countries can assess and mitigate financial crime risks in free trade zones. This research paper describes the ways in which cross-border financial crime risks can be assessed and adequately addressed by the authorities managing free trade zones. This research paper analyses the risk assessment topic in line with the African Continental Free Trade Area with a focus on free trade zones in Nigeria. This research paper would help authorities managing free trade zones, commercial organisations and business enterprises to identify, prevent and mitigate cross-border financial crime risks. Zone managements and business enterprises that implement the risk-based approach, in line with the guidance given in this research paper, will be well-placed to avoid the consequences of inappropriate de-risking behaviour.

Keywords: The African continental free trade area; Free trade zones; Bribery and corruption; Modern slavery; Trade-based money laundering; Risk mitigation; New technology (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-08-2023-0208

DOI: 10.1108/JFC-08-2023-0208

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