Sample Essay on Reaction and Approaches to Anti-Money Laundering Regulations

Reaction and approaches to anti-money laundering regulations

In order to eradicate the incidences of money laundering practices in the world today, it would be imperative to approach and react to anti-money laundering (AML) regulations in a uniform way. However, this is not the case because different countries approach and react to these regulations differently.[1] Some countries use their cultural and religious traditions in approaching these regulations while other countries use their colonial experiences on the same.[2] This essay with the help of Saudi Arabia that will act as a case study will demonstrate why some countries as well as regions have different approaches and reactions to AML regulations.

To start with, anti-money laundering regulations are well-elaborated guidelines that seek to stop generation of income through illegal means.[3] The guidelines may be regional or national depending on their scope.[4] The following are some of the reasons that affect the way some countries approach and react to AML regulations. First, some countries depend on their religious practices and beliefs as they approach and react to AML regulations. Such countries especially those in the Middle East hold firmly to their religious practices and because of this, they rarely or never violate their religious practices for the sake of implementing AML regulations.[5] For example, in relation to Islamic practices in the Middle East, majority of the countries in this region accept nominee ownership of properties and bank accounts among other things. This means that another person can hold a bank account or do anything else on behalf of another person. As this takes place, it becomes difficult to regulate money-laundering practices in the Middle East. This practice is very prominent in Saudi Arabia because Islamic practices are part of the law in the country.

Second, the dominance of cash transactions in some countries is also another factor that affects the approaches and reactions to AML regulations. With regard to this issue, majority of the AML regulations in the world presume that money-laundering practices can only take place through credit means or through banks. For this reason, AML regulations require banks to report cash transactions that exceed a certain limit.[6] However, because cash transactions are more prominent in some countries, the way such countries approach and react to AML regulations is different. This happens because cash transactions that are prominent in some of these countries do not provide electronic records to track and report money laundering practices taking place through cash transactions. Saudi Arabia is among the countries in Middle East that rely heavily on cash transactions.[7] As such, the way the country approaches and reacts to AML regulations is different from the western way of approaching and reacting to those regulations.

Third, structural issues are also other factors that affect the way countries approach and react to AML regulations. In this case, structural issues include the level of corruption, institutional capacities to detect and prosecute money laundering practices and economic status in a country. For a country to be effective in implementing AML regulations that country should have strong judicial systems, robust regulatory frameworks and an acceptable culture of compliance.[8] Currently, some countries in the world have high levels of corruption, their institutions do not have the capacity to detect and prosecute money-laundering practices, and some of these countries suffer from economic instabilities. Given this fact, some countries approach and react to AML regulations in a quite distinct way.

Fourth, the level of criminality in a country is also another factor that affects the way countries approach and react to AML regulations. For example, the high level of terrorism practices in Saudi Arabia affect the way the Saudi government approaches and reacts to AML regulations because the government is interested in protecting its citizens.[9] Other factors include the dominant business practices in a country, waves of colonization and regional issues among other factors.[10

Bibliography

Boon, Kristen, Huq, Aziz and Lovelace, Douglas. Terrorism: documents of international and local control. Dobbs Ferry, N.Y.: Oceana Publications, 1979.

Cordesman, Anthony H. Saudi Arabia enters the twenty-first century. Westport, Conn: Praeger, 2003.

Dorn, Nicholas, & Levi, Michael. East Meets West in Anti-Money Laundering and Anti-Terrorist Finance: Policy Dialogue and Differentiation on Security, the Timber Trade and ‘Alternative’ Banking, Asian criminology, 3; 91-110, 2008.

Essvale Corporation. Business knowledge for IT in private wealth management a complete handbook for IT professionals. London: Essvale Corp, 2009.

Eterno, John, and Dilip K. Das. Police practices in global perspective. Lanham: Rowman & Littlefield Publishers, 2010.

Masciandaro, Donato, Elod Takats, and Brigitte Unger. Black finance: the economics of money laundering. Cheltenham: Edward Elgar, 2007.

Moore, Jonathon. A practical guide to international philanthropy. Cambridge: Cambridge University Press, 2010.

Muller, Wouter H., Christian Kalin, and John G. Goldsmith. Anti-money laundering international law and practice. Chichester, England: John Wiley & Sons, 2007.

Oxford Business Group. The Report: emerging Saudi Arabia 2007. London: Oxford Business Group, 2007.

Unger, B. The economic and legal effectiveness of the European Union’s anti-money laundering policy. Cheltenham: Edward Elgar, 2014.

[1] Eterno, John, and Dilip K. Das. Police practices in global perspective. (Lanham: Rowman & Littlefield Publishers, 2010), 209.

[2] Essvale Corporation. Business knowledge for IT in private wealth management a complete handbook for IT professionals. (London: Essvale Corp, 2009), 58.

[3] Muller, Wouter, Christian Kalin, and John Goldsmith. Anti-money laundering international law and practice. (Chichester, England: John Wiley & Sons, 2007), 722.

[4] Unger, B. The economic and legal effectiveness of the European Union’s anti-money laundering policy. (Cheltenham: Edward Elgar, 2014), 51.

[5] Moore, Jonathon. A practical guide to international philanthropy. (Cambridge: Cambridge University Press, 2010), 272.

[6] Masciandaro, Donato, Elod Takats, and Brigitte Unger. Black finance: the economics of money laundering. (Cheltenham: Edward Elgar, 2007), 38.

[7] Boon, Kristen, Huq, Aziz and Lovelace, Douglas. 1979. Terrorism: documents of international and local control. (Dobbs Ferry, N.Y.: Oceana Publications, 1979), 181.

[8] Cordesman, Anthony. Saudi Arabia enters the twenty-first century. Westport, Conn: Praeger, 2003), 218.

[9] Oxford Business Group. The Report: emerging Saudi Arabia 2007. (London: Oxford Business Group, 2007), 45.

[10] Dorn, Nicholas, and Levi, Michael. East Meets West in Anti-Money Laundering and Anti-Terrorist Finance: Policy Dialogue and Differentiation on Security, the Timber Trade and ‘Alternative’ Banking, (Asian criminology, 3; 91-110, 2008), 92.