Director ARI HICoE: AML-CFT for DNFBPs - Accountants and Lawyers

Wednesday, November 7, 2012

AML-CFT for DNFBPs - Accountants and Lawyers

As a result of stringent legislative frameworks to combat Money Laundering (ML) and Terrorist Financing (TF) in several countries, particularly those involving global financial institutions, money launderers have resorted to the nonfinancial sector to try to conceal laundered proceeds and revenues of crimes. Thus, the risks related to this sector lie in the potential misuse for Money Laundering and Terrorism Financing. They found that these businesses and professions comprise real estate agents, accountants, lawyers, casinos, dealers in automobiles and boats and horse races. Non-financial businesses and professions (DNFBPs)designated were: casinos, real estate agents, dealers in precious metals, dealers in precious stones, lawyers, notaries, other independent legal professionals and accountants, trusts and company service providers. Some of the risks involved may include accountants and lawyers involved in the following activities: (1) the establishment of companies or other complex legal arrangements (like trusts), as such services may conceal the link between the proceeds of the crimes and the criminals; (2) buying and selling of real estates, as the transfer of the real estate ownership is used to cover the illicit funds transfer (layering phase of ML)2 or the final investment of the proceeds passed through laundering operations (integration phase); (3) execution of financial operations on behalf of customers, like cash deposit or withdrawal, foreign currency exchange operations, sale and purchase of shares, sending and receiving international money transfers and (4) filing of fictitious lawsuits to obtain a judgment to legitimize the funds. Research to measure the level of awareness of these DNFBPs towards AML-CFT risks is needed...

Welcome

The creation of this blog is an effort to provide latest update and information about ARI. As a director to ARI, I want to share my personal vision and perhaps invite those who visit this blog to give ideas and constructive comments on how to continuously improve ARI from time to time. ARI is a centre of excellence under the Ministry of Higher Education, Malaysia. Personally, I believe that it can go very far. Plans are underway for ARI to participate at international platforms.

As a Higher Institutions' Centre of Excellence (HICoE), ARI is to drive a niche research in Islamic Financial Criminology (IFC). Essentially there are two main research thrusts within IFC: (i) Islamic Accounting & Muamalat and (ii) Financial Criminology. The focus on IFC is in tandem with the government's aspiration of making Malaysia, the global hub is Islamic Finance. In view of this vision, fundamental research in financial criminology is important so that new policies or system can be developed to mitigate and prevent financial crime within the Islamic Finance industry and other economic sectors.

ARI's research in Islamic Financial Criminology is divided into three phases. In Phase One, IFC research projects will focus on both local and regional issues. As such, ARI will forge a lot smart research collaborations with other research centres, professional bodies, government agencies, regulatory & enforcement agencies, universities and the private sectors. The Phase One projects aim to identify specific IFC issues that necessitate the development of new poducts, models, framework or policies. ARI will collaborate with agencies such as JAKIM, IKIM, IBFIM, INCEIF, ISRA, PDRM, RMC, FIU, BNM, MACC, IIM, UIA, USIM, USM etc. In term of deliverables, at least fifty publications will be produced by Phase One initiatives.

Premised on specific issues identified in Phase One projects, Phase Two focuses on working on specific IFC products, models, framework and/or policies related to IFC. ARI invites international partners who are experts in their own fields to participate in Phase Two research projects. Several international players from Australia, USA, UK, New Zealand, Japan, Taiwan, Korea and Singapore have indicated their interest to participate.

In Phase Three, IFC products, models, policies are further enhanced. The main aim of Phase Three is to isolate elements of technology transfer and the development of systems into IFC products, models, framework or policies. Upon completion of Phase Three, IFC products will be launched and ARI hopes to become a leading research centre globally focusing on its niche "Islamic Financial Criminology".

Director ARI HICoE

Wednesday, November 7, 2012

AML-CFT for DNFBPs - Accountants and Lawyers

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