Illicit financial flows: HSBC case study

Naheem, Mohammed Ahmad

doi:10.1108/jmlc-08-2015-0036

Cited by 22 publications

(6 citation statements)

References 21 publications

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“…The governments through the implementation of strong regulation and supervision in financial institutions have denied criminals that want to establish anonymous businesses the opportunity of doing so (Perez et al , 2012; OECD, 2014; Naheem, 2018; Bohoslavsky, 2018). Financial institutions that have strengthened their customer due diligence procedure by profiling and verifying the identities of clients, determining whether a client is a politically exposed person and understanding their sources of wealth have successfully immunised the institution from illicit flows (OECD, 2014; Naheem, 2018; Bohoslavsky, 2018). Governments that are establishing registries of beneficial ownership details on entities, banks have details of true beneficial owners of most accounts in their financial institutions (Cobham, 2014; OECD, 2014; AU/ECA, 2015; Naheem, 2018; Bohoslavsky, 2018; GFI, 2019; Rapanyane and Ngoepe, 2019).…”

Section: Discussion and Resultsmentioning

confidence: 99%

“…Financial institutions that have strengthened their customer due diligence procedure by profiling and verifying the identities of clients, determining whether a client is a politically exposed person and understanding their sources of wealth have successfully immunised the institution from illicit flows (OECD, 2014; Naheem, 2018; Bohoslavsky, 2018). Governments that are establishing registries of beneficial ownership details on entities, banks have details of true beneficial owners of most accounts in their financial institutions (Cobham, 2014; OECD, 2014; AU/ECA, 2015; Naheem, 2018; Bohoslavsky, 2018; GFI, 2019; Rapanyane and Ngoepe, 2019). This is in line with FATF guideline 24 that is about transparency and beneficial ownership of legal persons, whereas recommendation 25 is about transparency and beneficial ownership of legal arrangements (FATF, 2012/2019).…”

Section: Discussion and Resultsmentioning

confidence: 99%

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Strategies for preventing illicit financial flows in developing countries

Ibrahim

Abu

Mohammed

2020

JMLC

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Purpose This paper aims to critically review the strategies for prevention of illicit financial flows to and from developing countries with a view of ascertaining the most effective strategies to be selected and implemented by developing countries to stem the scourge. Design/methodology/approach The peer-reviewed journal articles were studied; those that discussed illicit financial flows were selected and reviewed critically using the systematic quantitative assessment techniques together with an output table. Findings The critical review deduced that enacting effective trade laws, trade regulations, creating a beneficial ownership registry, multinational companies disclosing information on business, automatic exchange of information on tax issues, the Financial Action Task Force 40 guidelines on anti-money laundering and countering financing of terrorism and domestic and international cooperation are the most reliable strategies that should be implemented by developing countries. Research limitations/implications The wide geographic scope of developing countries, use of only high-quality databases that restricted the use of other articles and use of public sector perspective are the limitations for this paper. Originality/value This study is amongst the limited works to discuss the most reliable and effective strategies to prevent illicit financial flows in developing countries.

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Section: Discussion and Resultsmentioning

confidence: 99%

Section: Discussion and Resultsmentioning

confidence: 99%

Strategies for preventing illicit financial flows in developing countries

Ibrahim

Abu

Mohammed

2020

JMLC

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“…Mezentceva and Mezentceva (2015) pursued to establish a correlation analysis between the stock market index and financial outflow to measure ML, however, he found it weak. Later, Naheem (2018) found that illicit financial flows may occur through any formal channel in the financial system and it could be more likely in the "securities market". Another study by Muhammad (2014) also gave the general evidence for the effectiveness of AML regulations and discussed the determinants of ML risks which belong to individuals closely related to the banking sector.…”

Section: Existing Studiesmentioning

confidence: 99%

Prevalence of money laundering and terrorism financing through stock market: a comprehensive conceptual review paper

Akram

Ramakrishnan

Naveed

2022

JMLC

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Purpose This paper aims to provide a comprehensive conceptual framework and strong arguments with an intent to examine the stock market variables (predictors) indicating the money laundering (ML) and terrorism financing (FT) proceeds. Design/methodology/approach This paper provides a comprehensive review of ML/FT through the stock market across developed, developing and emerging jurisdictions, sheds light on the existing literature and critically evaluates the gap in the relevant studies. Moving forward, this paper develops the conceptual framework and formulates hypotheses to explore the empirical relationship. Findings This paper advocates and finds a basis to carry out much-needed empirical research between the ML/FT and stock market keeping in view the growing criminal cases in the developing countries. This paper suggests mining proxies from the publically available stock market data and the results of existing seminal research as variables of the study. These data and results carry information about the ML determinants. After developing hypothetical research providing concepts, this paper also finds that using a suitable methodology, preferable Bayesian logistic and linear regression models, it is possible to find the typologies and factors that can indicate and endorse the use of the stock market for ML/FT. Broadly, it is found that the significance of this study will be two-pronged: empirical development and policy implications. Research limitations/implications This paper mainly focuses on the developing region, a newly emerging market and, peculiarly, a grey-listed region by the Financial Action Task Force (FATF). Practical implications In light of the existing literature and to the best of the researchers’ knowledge, this study will bring into focus the new age of the action research on the ML regime in the securities markets of the developing countries, hence, the emerging markets. Moreover, this research shall have a sheer significance for the policy measures on FATF recommendations on ML and FT, especially for the countries listed as “grey”. Social implications The research based on comprehensive review will help in controlling the social behaviours aiding the proceeds of ML. Originality/value This research is extremely novel to the best of the researcher's knowledge.

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“…In particular, one leading conceptual problem that has dominated the academic literature over a long time refers to the impact of illicit financial flows on the macroeconomic situation. Based on the HSBC Swiss bank's case study, Naheem (2018) demonstrated how banking institutions were connected to illicit financial flow movements through their clients. In this case, financial intermediaries could facilitate different types of illegal financial activities such as money laundering, tax evasion, corruption, bribery, capital flight, and financial resources movement out of economies through illicit financial flows.…”

Section: Literature Reviewmentioning

confidence: 99%