An Ethical Approach To Anti Money Laundering Regulations A Framework For Organisation Of Islamic Cooperation Countries

This study presents a new ethical framework for anti-money laundering (AML) that can be possible by combining Islamic system and experience, that offers a holistic, consistent, and comprehensive framework in the fight against money laundering with the global experience in this field. Although today, there are many standards and units against crimes through the fight against money laundering, this struggle has not been fully integrated with the ontological reality of the human beings and their ethical system. The contemporary world does not say much in the context of the fight against money laundering, whether good and evil are merely epiphenomenal feelings or whether they are strongly tied to a fundamental reality. As a natural consequence of this, contemporary anti-money laundering activities are mainly limited to law enforcement and intelligence activities; and this structure cannot present a holistic framework in terms of combating money laundering and thus crime by using instruments in fields that concern all aspects of life, such as economic policies, moral teaching, and academic studies. This study demonstrates how Islam provides a framework for combating money laundering, integrating the intellectual, economic, financial, ethical, and other related fields, and based on the original and ontological reality of man. To achieve this objective, the study delves into secondary literature, conducts a survey involving professionals in the field of anti-money laundering (AML), and performs a gap analysis comparing the modern AML framework with the Islamic ethical system. It also identifies areas where potential improvements can be made, where both the Organization of Islamic Cooperation (OIC) countries and other countries can support each other in reaching a higher level in the fight against money laundering. Based on these analyses, the study proposes a new framework in the fight against money laundering and concludes that both OIC and non-OIC countries have a lot to learn from each other and from the core teachings of Islam.

Anti-Money Laundering is the definitive reference on money laundering and practice. First an outline will be given of the general approach taken by supra-national organisations like the United Nations and the European Council. Next the approach taken by international organisations and initiatives on the basis of the supra-national initiatives will be outlined by senior members of those organisations. A number of countries will then describe their specific prevention legislation. Countries involved will all be member-countries of the FATF (Financial Action Task Force on Money Laundering). Finally there will be an overview to enable the reader to make a comparison between the most important topics of money laundering legislation and rules in the different countries.

The money laundering (ML) and terrorist financing (TF) risks associated with conventional finance are generally well identified and understood by the relevant national authorities. There is, however, no common understanding of ML/TF risks associated with Islamic finance. Some are likely to be the same as in conventional finance, but there may also be different risks. This is notably due to: (i) the complexity of some Islamic finance products; and (ii) the nature of the relationship between the institutions and their clients. The limited capacity and experience in the supervision of Islamic finance, especially in jurisdictions that face higher ML/TF risk factors represents an additional vulnerability. The Financial Action Task Force (FATF) standards are implemented without any form of tailoring to the specificities of Islamic finance. The FATF, the Islamic finance standard-setters, and the national regulators should seek a greater understanding of the specific ML/TF risks that may arise in Islamic finance and develop an appropriate response.

A detailed assessment report on Anti-Money Laundering and Combating the Financing of Terrorism for Mauritius is discussed. Mauritius is well placed to capitalize on its national strategy to diversify its economy into global financial services by taking advantage of its linkages with both African and long-standing arrangements with the larger Asian economies. Additionally, Mauritius intends to offer new products in Islamic financial services and wealth management. The investigative and prosecutorial authorities have the necessary powers to execute their respective functions.

This report provides a summary of the anti-money laundering/combating the financing of terrorism (AML/CFT) measures in place in the People’s Republic of China (China)1 as at the date of the onsite visit (July 9–27, 2018). It analyzes the level of compliance with the Financial Action Task Force (FATF) 40 Recommendations and the level of effectiveness of China’s AML/CFT system and provides recommendations on how the system could be strengthened. China has undertaken a number of initiatives since 2002 that have contributed positively to its understanding of ML/TF risk, although some important gaps remain. Its framework for domestic AML/CFT cooperation and coordination is well established.

This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.

Gibraltar’s Detailed Assessment Report on Anti-Money Laundering (AML) and Combating the Financing of Terrorism is reviewed. The principal AML risk to Gibraltar is lodged in its professional sector, which is likely to be involved in the layering and integration of proceeds of crime. There is also some risk to Gibraltar at the placement stage, in connection with drug trafficking, migrant smuggling, and organized crime in southern Spain. The Financial Services Commission in Gibraltar has established a strong, risk-based framework for financial institutions for AML.