Skip to main content
SpringerLink
Log in

Background of the AML Environment

  • Chapter
  • First Online:
Improving Anti-Money Laundering Compliance

Part of the book series: Palgrave Studies in Risk, Crime and Society ((PSRCS))

  • 884 Accesses

Abstract

This chapter provides a background and context for the book. The chapter is, therefore, not meant to be a literature review of the substantive area, but a brief summary of the anti-money laundering (AML) environment. It starts with the history of AML compliance, tracing the first formal regulation on AML compliance to the current system of risk-based approach, which is the current system of operation in the United Kingdom (UK). Accordingly, the legal framework for AML in the UK is discussed. The role of international organisations in the development of AML will also be highlighted before focusing on the UK regulatory environment as the focus of the study. Finally, the role of money laundering reporting officers (MLROs) is discussed in relation to AML compliance since the book is about finding out the main concern of MLROs and how they are resolving it.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 119.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 159.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 159.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Araujo, R. A. (2008). Assessing the efficiency of the anti-money laundering regulation: An incentive-based approach. Journal of Money Laundering Control, 11(1), 67–75.

    Article  Google Scholar 

  • Arvai, J. L. (2007). Rethinking of risk communication: Lessons from the decision sciences. Tree Genetics & Genomes, 3(2), 173–185.

    Article  Google Scholar 

  • Aristoteles. (1893). The Nicomachean Ethics. p. 359.

    Google Scholar 

  • Barone, R., & Masciandaro, D. (2011). Organized crime, money laundering and legal economy: Theory and simulations. European Journal of Law and Economics, 32(1), 115–142.

    Article  Google Scholar 

  • Basel. (1988). Prevention of criminal use of the banking system for the purpose of money-Laundering. http://www.bis.org/list/bcbs/tid_32/index.htm

  • Basel. (2001). Customer due diligence for banks. Basel: Bank of International Settlements.

    Google Scholar 

  • Basel. (2004). Consolidated KYC risk management. Bank of International Settlements.

    Google Scholar 

  • Bergstrom, M., Helgesson, K. S., & Morth, U. (2011). A new role for for profit actors? The case of anti money laundering and risk management. JCMS: Journal of Common Market Studies, 49(5), 1043–1064.

    Google Scholar 

  • Bosworth-Davies, R. (1998). Living with the law: A survey of money-laundering reporting officers and their attitudes towards the money-laundering regulations. Journal of Money Laundering Control, 1(3), 245–253.

    Article  Google Scholar 

  • Canhoto, A. I. (2008). Barriers to segmentation implementation in money laundering detection. The Marketing Review, 8(2), 163–163.

    Article  Google Scholar 

  • CPS. (2010, 15/09/10). Proceeds Of Crime Act 2002. http://www.cps.gov.uk/legal/p_to_r/proceeds_of_crime_money_laundering/

  • de Koker, L. (2009). Identifying and managing low money laundering risk. Journal of Financial Crime, 16(4), 334–352.

    Article  Google Scholar 

  • de Wit, J. (2007). A risk-based approach to AML: A controversy between financial institutions and regulators: A controversy between financial institutions and regulators. Journal of Financial Regulation and Compliance, 15(2), 156–165.

    Article  Google Scholar 

  • Demetis, D. S., & Angell, I. O. (2007). The risk-based approach to AML: Representation, paradox, and the 3rd directive. Journal of Money Laundering Control, 10(4), 412–428.

    Article  Google Scholar 

  • Dolar, B., & Shughart II, W. F. (2011). Enforcement of the USA Patriot Act’s anti-money laundering provisions: Have regulators followed a risk-based approach? Global Finance Journal, 22(1), 19–31.

    Article  Google Scholar 

  • Edwards, J., & Wolfe, S. (2005). Compliance: A review. Journal of Financial Regulation and Compliance, 13(1), 48–59.

    Article  Google Scholar 

  • Egmont Group. (2000). FIUs in action: 100 cases from the Egmont Group. Canada. Egmount Group.

    Google Scholar 

  • Egmont Group. (2012). 2011–2012 Annual Report. Canada. Egmont Group

    Google Scholar 

  • European Union. (1991). Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1991:166:0077:0082:EN:PDF.

  • European Union. (2001). Directive 2001/97/EC of The European Parliament and of the Council of 4 December 2001 amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:344:0076:0081:EN:PDF.

  • European Union. (2005). Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:309:0015:0036:EN:PDF.

  • European Union. (2013). Money Laundering in Europe. Luxembourg. European Union.

    Google Scholar 

  • European Union. (2015). Directive (EU) 2015/849 of the European Parliament and of the Council. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32015L0849

  • FATF. (1990). The Forty Recommendations. Paris. Financial Action Task Force.

    Google Scholar 

  • FATF. (2005). FATF Annual Report 2004–2005. Paris. Financial Action Task Force.

    Google Scholar 

  • FATF. (2007a). FATF Annual Report 2006–2007. Paris. Financial Action Task Force.

    Google Scholar 

  • FATF. (2007b). Guidance on the risk-based approach to combating money laundering and terrorist financing: High level principles and procedures. Paris: Financial Action Task Force.

    Google Scholar 

  • FATF. (2007c). Third mutual evaluation report—Anti-money laundering and combating the financing of terrorism, The United Kingdom of Great Britain and Northern Ireland. Paris. Financial Action Task Force.

    Google Scholar 

  • FATF. (2012). FATF Recommendations. Paris. Financial Action Task Force.

    Google Scholar 

  • FATF. (2013a). FATF Annual Report 2012–2013. Paris. Financial Action Task Force.

    Google Scholar 

  • FATF. (2013b). FATF Public Statement—21 June 2013. http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/public-statement-june-2013.html

  • FATF. (2013c). What do we do. http://www.fatf-gafi.org/pages/aboutus/whatwedo/

  • Favarel-Garrigues, G., Godefroy, T., & Lascoumes, P. (2008). Sentinels in the banking industry: Private actors and the fight against money laundering in France. British Journal of Criminology, 48(1), 1–19.

    Article  Google Scholar 

  • Favarel-Garrigues, G., Godefroy, T., & Lascoumes, P. (2011). Reluctant partners? Banks in the fight against money laundering and terrorism financing in France. Security Dialogue, 42(2), 179–196.

    Article  Google Scholar 

  • Financial Conduct Authority. (2013a). Anti-money laundering annual report 2012/2013. https://www.fca.org.uk/publication/corporate/anti-money-laundering-report.pdf

  • Financial Conduct Authority. (2013b). Handbook: SYSC. http://fshandbook.info/FS/html/FCA/.

  • Financial Service Authority. (2012b). Final Notice: Habib Bank AG Zurich. http://www.fsa.gov.uk/static/pubs/final/habib-bank.pdf

  • Financial Services Authority. (2011). Financial conduct authority: Approach to regulation. http://www.fsa.gov.uk/pubs/events/fca_approach.pdf

  • Financial Services Authority. (2012). Final Notice: Habib b Bank AG Zurich. Financial Services Authority.

    Google Scholar 

  • Geiger, H., & Wuensch, O. (2007). The fight against money laundering: An economic analysis of a cost-benefit paradoxon. Journal of Money Laundering Control, 10(1), 91–105.

    Article  Google Scholar 

  • Gibbs, C., Gore, M. L., McGarrell, E. F., & Rivers, L., III. (2010). Introducing conservation criminology: Towards interdisciplinary scholarship on environmental crimes and risks.(Author abstract). British Journal of Criminology, 50(1), 124.

    Article  Google Scholar 

  • Guerron-Quintana, P. A. (2012). Risk and uncertainty. Business Review (Federal Reserve Bank of Philadelphia), 10, Q1, 2012.

    Google Scholar 

  • The Money Laundering Regulation 2007, No. 2157 C.F.R. (2007).

    Google Scholar 

  • Haimes, Y. Y. (2009). On the complex definition of risk: A systems-based approach. Risk Analysis, 29(12), 1647–1654. doi:10.1111/j.1539-6924.2009.01310.x

    Article  Google Scholar 

  • Harvey, J. (2008). Just how effective is money laundering legislation? Security Journal, 21(3), 189–211.

    Article  Google Scholar 

  • Harvey, J. (2009). The search for crime money-debunking the myth: Facts versus imagery. Journal of Money Laundering Control, 12(2), 97–100.

    Article  Google Scholar 

  • Harvey, J., & Lau, S. F. (2009). Crime-money, reputation and reporting. Crime, Law and Social Change, 52(1), 57–72.

    Article  Google Scholar 

  • Hinterseer, K. (2001). The Wolfsberg anti-money laundering principles. Journal of Money Laundering Control, 5(1), 25.

    Article  Google Scholar 

  • Jackson, A. (2000). Recognising and reporting money laundering: How well should you know your customer? Journal of Money Laundering Control, 3(4), 317–324.

    Article  Google Scholar 

  • JMLSG. (2011). Guidance for the UK financial sector: Part I. http://www.jmlsg.org.uk/industry-guidance/article/guidance

  • JMLSG. (2014). What is JMLSG? http://www.jmlsg.org.uk/what-is-jmlsg

  • Killick, M., & Parody, D. (2007). Implementing AML/CFT measures that address the risks and not tick boxes. Journal of Financial Regulation and Compliance, 15(2), 210–216.

    Article  Google Scholar 

  • Levi, M., & Reuter, P. (2006). Money laundering. Crime and Justice—A Review of Research, 34(34), 289–375. <Go to ISI>://000260691400006

    Article  Google Scholar 

  • Marshall, P. (2004). Part 7 of the Proceeds of Crime Act 2002: Double criminality, legal certainty, proportionality and trouble ahead. Journal of Financial Crime, 11(2), 111–126.

    Article  Google Scholar 

  • Masciandaro, D. (1999). Money laundering: The economics of regulation. European Journal of Law and Economics, 7(3), 225–240.

    Article  Google Scholar 

  • Masciandaro, D., & Barone, R. (2008). Worldwide anti-money laundering regulation: Estimating the costs and benefits. Global Business & Economics Review, 10(3), 243–264. doi:10.1504/GBER.2008.019983

    Article  Google Scholar 

  • Masters, J. L. (2008). Fraud and money laundering: The evolving criminalization of corporate non-compliance. Journal of Money Laundering Control, 11(2), 103–122.

    Article  Google Scholar 

  • Mitsilegas, V., & Gilmore, B. (2007). The EU legislative framework against money laundering and terrorist finance: A critical analysis in the light of evolving global standards. International and Comparative Law Quarterly, 56(1), 119.

    Article  Google Scholar 

  • National Crime Agency. (2013a). About us. http://www.nationalcrimeagency.gov.uk/about-us

  • National Crime Agency. (2013b). Obtaining consent from the NCA under Part 7 of the Proceeds of Crime Act (POCA) 2002 or under Part 3 of the Terrorism Act (TACT) 2000. http://www.nationalcrimeagency.gov.uk/publications/24-obtaining-consent-from-the-nca/file

  • National Crime Agency. (2013c). Submitting A Suspicious Activity Report (SAR) within the Regulated Sector. http://www.nationalcrimeagency.gov.uk/publications/61-submitting-a-sar/file

  • National Crime Agency. (2014). SARs legal basis for reporting. http://www.nationalcrimeagency.gov.uk/about-us/what-we-do/specialist-capabilities/ukfiu/legal-basis-for-reporting

  • Proceeds of Crime Act (2002).

    Google Scholar 

  • Reuter, P., & Truman, E. M. (2004). Chasing dirty money: The fight against money laundering. Washington, DC: Peterson Institute.

    Google Scholar 

  • Rhodes, R., & Palastrand, S. (2004). A guide to money laundering legislation. Journal of Money Laundering Control, 8(1), 9.

    Article  Google Scholar 

  • Ross, S., & Hannan, M. (2007). Money laundering regulation and risk-based decision-making. Journal of Money Laundering Control, 10(1), 106–115.

    Article  Google Scholar 

  • Ryder, N. (2008). The financial services authority and money laundering a game of cat and mouse. The Cambridge Law Journal, 67(3), 635–653. doi:10.1017/S0008197308000706

    Article  Google Scholar 

  • Ryder, N. (2012). Money laundering: An endless cycle. Abingdon: Routledge.

    Google Scholar 

  • Sathye, M., & Islam, J. (2011). Adopting a risk-based approach to AMLCTF compliance: The Australian case. Journal of Financial Crime, 18(2), 169–182.

    Article  Google Scholar 

  • Schneider, F., & Windischbauer, U. (2008). Money laundering: Some facts. European Journal of Law and Economics, 26(3), 387–404. doi:10.1007/s10657-008-9070-x

    Article  Google Scholar 

  • Schott, P. A. (2006). Reference guide to anti-money laundering and combating the financing of terrorism. Washington, DC.

    Google Scholar 

  • Schroeder, W. R. (2001). ‘Money laundering’ a global threat and the international community’s response. Washington DC: FBI Law Enforcement Bulletin.

    Google Scholar 

  • Sharman, J. C. (2008). Power and discourse in policy diffusion: Anti-money laundering in developing states. International Studies Quarterly, 52(3), 635–656. doi:10.1111/j.1468-2478.2008.00518.x

    Article  Google Scholar 

  • Shehu, A. Y. (2005). International initiatives against corruption and money laundering: An overview. Journal of Financial Crime, 12(3), 221–245.

    Article  Google Scholar 

  • Sproat, P. A. (2007). An evaluation of the UK’s anti-money laundering and asset recovery regime. Crime, Law and Social Change, 47(3), 169–184.

    Article  Google Scholar 

  • Stessens, G. (2000). Money laundering: A new international law enforcement model. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Takats, E. (2011). A theory of ‘crying wolf’: The economics of money laundering enforcement. Journal of Law, Economics & Organization, 27(1), 32–78.

    Article  Google Scholar 

  • Tanzi, V. (1996). Money laundering and the international financial system. Washington, DC.

    Google Scholar 

  • Treasury, H. M. (2007). The Money Laundering Regulation 2007. UK: The Stationery Office.

    Google Scholar 

  • Unger, B. (2013a). The history of money laundering. In B. Unger & D. van der Linde (Eds.), Research handbook on money laundering (pp. 19–34). Cheltenham: Edward Elgar Publishing.

    Chapter  Google Scholar 

  • Unger, B. (2013b). Introduction. In B. Unger & D. van der Linde (Eds.), Research handbook on money laundering (pp. 3–18). Cheltenham:  Edward Elgar Publishing.

    Chapter  Google Scholar 

  • Unger, B., & Busuioc, E. M. (2007). The scale and impacts of money laundering. Cheltenham: Edward Elgar.

    Book  Google Scholar 

  • Unger, B., & van der Linde, D. (2013). Research handbook on money laundering. Cheltenham: Edward Elgar Publishing, Incorporated.

    Book  Google Scholar 

  • United Nations. (2004). United nations convention against corruption New York: United Nations. https://www.unodc.org/unodc/en/treaties/CAC/.

    Google Scholar 

  • UNODC. (2013a). GPML Mandate. http://www.unodc.org/documents/money-laundering/GPML-Mandate.pdf

  • UNODC. (2013b). International Money-Laundering Information Network (IMoLIN)/Anti-Money-Laundering International Database (AMLID). http://www.unodc.org/unodc/en/money-laundering/imolin-amlid.html?ref=menuside

  • UNODC. (2013c). UN instruments and other relevant international standards on money-laundering and terrorist financing. http://www.unodc.org/unodc/en/money-laundering/Instruments-Standards.html?ref=menuside

  • van den Broek, M. (2011). The EU’s preventive AML/CFT policy: Asymmetrical harmonisation. Journal of Money Laundering Control, 14(2), 170–182.

    Article  Google Scholar 

  • Walker, J., & Unger, B. (2009). Measuring global money laundering: ‘The walker gravity model’. Review of Law & Economics, 5(2), 1418–1418.

    Article  Google Scholar 

  • Webb, L. (2004). A survey of money laundering reporting officers and their attitudes towards money laundering regulations. Journal of Money Laundering Control, 7(4), 367–375.

    Article  Google Scholar 

  • Williams, C. A. (1966). Attitudes toward speculative risks as an indicator of attitudes toward pure risks. The Journal of Risk and Insurance, 33(4), 577–586. doi:10.2307/251231

    Article  Google Scholar 

  • Wolfsberg Group. (2012). Wolfsberg anti-money laundering principles for private banking. Geneva: The Wolfsberg Group.

    Google Scholar 

  • Wolfsberg Group. (2014). Global banks: Global standards. http://www.wolfsberg-principles.com/index.html

  • Woods, M. (2012). Why bankers are more scared of New York than London. Financial Times. August 23, 2012. http://www.ft.com/home/uk

  • Yan, L., Ai, L., & Tang, J. (2011). Risk-based AML regulation on internet payment services in China. Journal of Money Laundering Control, 14(1), 93–101.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Forensic Accounting and Financial Investigation, Economic and Financial Crimes Commission, Abuja, Nigeria

    Abdullahi Usman Bello

Authors
  1. Abdullahi Usman Bello
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

© 2016 The Author(s)

About this chapter

Cite this chapter

Bello, A.U. (2016). Background of the AML Environment. In: Improving Anti-Money Laundering Compliance. Palgrave Studies in Risk, Crime and Society. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-43264-9_2

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-43264-9_2

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-319-43263-2

  • Online ISBN: 978-3-319-43264-9

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

Publish with us

Policies and ethics

Search

Navigation