Is tackling Trade Based Money Laundering (TBML) through stricter reporting regulation the most effective response?

Mohammed Ahmad Naheem

Journal of Money Laundering Control, 2018, vol. 21, issue 3, 345-357

Abstract: Purpose - This paper (written in August 2015) aims to discuss the regulatory approach to detecting and preventing trade-based money laundering (TBML) by using the example of Financial Crimes Enforcement Network (FinCEN) and its use of geographic targeting orders. Design/methodology/approach - The paper uses both theoretical and empirical reports on TBML to explore whether increased regulation will ultimately achieve the ends it claims to offer. Findings - The main findings from the analysis are that increased regulation has been found to have a negative impact on improving TBML detection. There is evidence that it causes an over-defensive response from banks that leads to a decrease in useful information to financial intelligence units. Research limitations/implications - The research topic is very new and an emerging topic; therefore, analysis papers and other academic writing on this topic are limited. Practical implications - This paper has implications for both the regulatory and the banking/financial service sectors. Originality/value - The originality of this paper is the deeper analysis of a specific TBML case, and the focus is on both the theoretical and empirical implications of the approach being used.

Keywords: Beneficial ownership; Customer due diligence; Trade-based money laundering; Banking and financial services; Geographic targeting order; Money laundering regulation (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-08-2015-0034

DOI: 10.1108/JMLC-08-2015-0034

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