Wednesday, December 11, 2019

Emerging Issues in the Financial Crimes †Myassignmenthelp.Com

Question: What Is The Emerging Issues In Financial Crimes? Answer: Introduction At its September 2000, meeting the International Monetary and Financial Committee (IMFC), asked that the Fund put together a joint paper with the World Bank on their respective roles in fighting cash laundering and economic crime, and in protecting the international financial approach. Moreover, the fund was particularly expected to explore the incorporating operation on the financial systems and abuse, especially with respect to the international effort of fighting the financial crimes into distinctive activities. Therefore, the primary purpose of this paper is to present the main context of emerging issues in the financial sector in the current work, this intends to explain undoubtedly the trend that is currently facing the financial sector under the international Monetary Fund and Work Bank. The paper will explore the context relating to the financial crimes in relation to reports presented by different researchers, in the financial and economic sector in the world. According toRyder 2017, financial crime over the last three decades has increasingly become the primary concern to Federal and independent governments throughout the world. The concern is accelerating from the variety of issues since the impact of the financial crimes is considered to be distinctive in a different context(Ryder, 2017). On the other hand, Fors 2017, currently, it is known that theeconomicprevalence motivates financial crime in many nations, this relates to the economic environment a country lies(Fors, 2017). The International Monetary and Financial Committee (IMFC) understands that the Fund has to play a critical role in protecting the integrity of the international financial systems and governance from any abuse through its jurisdictions(Gottschalk, 2016). The purpose of the International Monetary and Financial Committee (IMFC) is to promote the financial integrity through sound and recognizable financial systems. On the other hand, World Bank has decisively ensured that its mandate of in assisting countries to operate under the international financial reforms, they extensively ensure that they implement on the capacity of building the legal reforms as well as the judicial reforms thatguidesthe financial activities in the international financial market(Clemens Kremer, 2016). Consequently, it seems that there is the broadest context of the financial crime: these are money laundering, corruption, tax evasion andterrenceof insurance fraud, the financial abuse and crime are far less detailed and sometimes even be used to cover all other negative financial issues affecting the financial sectors(Didimo, et al., 2014). The paper is trying to bring out the substantial understanding of financial crimes in relation to the original context of money laundering, tax evasion and Circumvention of exchange restrictions. The functionality of the financial crimes indicates that it means to different occasions as per the present study. It is important to understand the important factors that contribute to the financial crimes and abuse, according to Peel 2006, as poor regulatory and supervisory frameworks, as well as weak tax system, are the factors that encourage the financial crimes(Peel, 2006). Therefore, it is important to authoritatively understand the incentives that encourage the emerging financial crimes, by understanding these factors the relevant organization such as World Bank and International Monetary Committee are able to develop policies and measures that will be used to eradicate and reduce the impact of these financial crimes(Masciandaro, 2004). Money Laundering According toDidimo, Liotta, and Montecchiani 2014, financial crime is interpreted as any illegal activity that potentially reflected to affect thefinancial systems as well as the legal operation that exploit objectionable features of tax and regulatory measures(Didimo, et al., 2014).Kannan,and Somasundaram 2014stated that there is no acceptable definition that explains the financial crime, and rather the term expresses different concepts depending on the recognized jurisdiction based on the relevant organizations(Kannan Somasundaram, 2017). They perceive the definition of financial crimes to be broadest since it carries illegal factors that affect the financial operations and performance in the economic market. Bryans 2014, stated that money laundering is part of the financial crime that illegal all over the world, World Bank and International Monetary Committee has the jurisdiction of ensuring that the applicable systems are measured are but in place to eradicate money laundering and reduce its impact to the world economic developing(Bryans, 2014). In 1999, Walker conducted a research about money laundering and how it affects the economy in different context, money laundering leads to microeconomic effects where the volatility of exchange rates and interest are experienced due to anticipated fund transactions, it also leads to increase in criminal issues where launders who involves themselves in performing the illegal activities keepownmaking more profits(Walker, 1999). According to Freilich, Chermak, Belli, Gruenewald, and Parkin 2014, financial institutions are continuing to implement on decisive systems which are used in discovering and preventing the money laundering process (Freilich, et al., 2014). The study reveals that the money laundering process takes a complex process which includes, placement, layering, and integration.(Khoyini, et al., 2016). Process of money laundering According to Unger 2014, placement is the basis of money laundering, this is where the activities are generated from the cash incentives. The massive amount of money as well as the hard currencies are got from the criminal activities such as human and drug trafficking, and selling of firearms(Unger, 2014). Khoyini, Sarayi, and Kabiri 2016confirmsthat the layering is the next process of money laundering, it implies that launderer will make attempts of undisclossing the origin of their funds, this is by explaining about rage and layers of financial transactions which are developed and designed cover the audit trail.(Khoyini, et al., 2016). The research done by Khoyini, Sarayi, and Kabiri indicates that, the layers of financial transactions are created by the launderers from the dissociating the illegal activities from the sources of the crime. Some of the activities that they involve themselves to disassociate fund from their sources comprise buying promoting belongs and transfer of prohibited business and bills. The conclusion of money laundering process is confirmed by the research done by Mathers 2004, he stated that, after layering process, the illegal monies are reversed to the financial system as the payment for the services to be rendered(Mathers, 2004). This is the stage that mak es the money launders to feel satisfied with their usual business activities, this indicates that the illegal funds are returned back to the economy are used as the authentic income. Terrorism Financing Terrorism is currently a factor that has contributed to the economic dormancy in different parts of the word. Abadie and Gardeazabal 2008, observed the reaction of the terrorism groups such as Al-Qaeda, ISIS and Al-Shabab while they default peace in many countries, they stated that in 2010 the ISIS group in Syria had started developing and their impact was steel below the current pressure despite the involvement of giant nation like the United States(Sullivan, et al., 2016). Al-Qaeda, ISIS and Al-Shabab are considered to be examples of the terrorism groups which are financed by different global companies, some of these companies are owned by specific terrorism group(Abadie Gardeazabal, 2008). Al-Qaeda is the largest group which is considered as the parent to the other Islamic groups. Terrorist financing comprises the process of solicitation, provision and collection of budget with the intention that they will be used to guide terrorist groups and related activities. According to Freilich LaFree 2016, s person is said to commit the terrorims financial crime if that person directl, willingfuly gives and collect funs with an aim of using them to perfom the terrorism activities.(Freilich LaFree, 2016). The number one intention of people or entities involved inside the financing of terrorism is consequently not always to conceal the sources of the money however to conceal each the financing and the character of the financed interest. Reducing and preventing terrorism financing In the year 2016, Rahman and Rahman conducted a research in Malaysia about how to combat with the financial crimes, it was discovered that currently money laundering is also an incentive that encourages the terrorism activities, and this confirms the research done by Unger 2014 about illegal activities that defines the financial crime as the broadest economic term(Rahman Rahman, 2016). According to Gottschalk 2016, essential element of management needs to be installed by the relevant international bodies while trying to prevent and reduce the existing terrorism financing and other related activities(Gottschalk, 2016). Freilich and LaFree 2016, supports the conclusion of Gottschalk 2016 and Unger 2014 by confirming that, the international community is should consider uniform and applicable measures of reducing the terrorism financing, implementing of anti-money laundering (AML) procedure which will reduced the money transacts to terrorism accounts of those people perceive to receive bulk and anticipated amount of money to their accounts(Freilich LaFree, 2016). The institutions who are the main stakeholders in the financial markets and sectors should ensure that they comply with the polices and regulation in order to protect the integrity as well as the stability of the international financial systems, moreover, the organizations should ascertain that they cur-off all sources and resources which are available for the terrorist and as well making them difficult to operate in crime to profit criminal activities(Ryder, 2016). Cyber financial crime Cyber financial crime is one of the most fatal financial crime that has currently encouraged the economic default in the world. According to PwC's Academy 2017, in 2016, the Cybercrimes was rated as the second most reported economic crime. The cybercrime is contributed by the digital economic crimes that affects and damages the financial reputation and nature of the financial sector in the current world(PwC's, 2017). According to the survey that was done by PwC's Academy 2017, in the next 3-5 years 34% more out 32% business enterprises will be affected by the cyber financial crimes, especially when 1-3 business organizations are affected without the knowledge of their management and related organizational departments. The research also indicates that despite the fact that many business organization have effective technological coverage, it is only 37% that works under the cyber response strategy(PwC's, 2017). According to Paul Henninger 2013, cyber financial crime has majorly affected the activities if many business organizations, many date are lost because of un-noticeable data lose experience by the company department(Henninger, 2013). The research indicates that hackers have damaged many business data by hacking them out of the business database, this affects the decisional making process of an operating business institutions. Computer crime is defined as the act performed by a computer expert, sometimes this person may be nasty and could decide to corrupt the computer data and files, this could lead to data loss. In 2013, five men hacked some data and fraud over $300 million, these men hacked Visa Inc. licensee, J.C. Penney Co, and Nasdaq, with the loss of $300 million it is concluded that hacking the organizational or the personal data has currently affected the activities of a business firm in the current business market. Due to the technological dilution process in the market, Rant ala 2008 confirmed that many organization have decided to perform cloud saving where they store their essential data in the internet. The internet crime is an illegal online activity that is committed on the internet, it is one of the basic element of the financial cybercrime where companies store their financial data and other data analysis aspects that are used while making providing solution to issues affecting the organizations(Rantala, 20056). Reducing the Cyber financial crime According to Corbet, and Gurdgiev 2017, many business organization does not have adequate policies to prepare and either understand the risk that faces and those that anticipate to negatively influence their business activities(Corbet Gurdgiev, 2017). In 2000 Speer, DL stated that it is important for the organizational management to confirm the integrity of their operation by ascertaining effective business activities, the management are advocated to incorporate cyber financial crime are their normal routine while running the business organization. In order to operate effectively, the management are also encouraged to understand and planned for the cyber financial crime like any other business risk like the employee turnover and legal business risk(Speer, 2000). According to FICO Blog 2017, it organizational management are advocated to comply with the cyber security defenses in order to operate without any inconvenience, they will be able to make appropriate decision and provide better solution to the anticipated issues(FICO, 2017). It is also important for the management to educate their employees, they are encouraged to implement on the training and development programs that will ensure that employee are having relevant skills to use while operating on the computers. Moitra 2005 recommended for the regular audit to the company systems, this is to ascertain the effectiveness, efficiency as well as the accuracy and the state of the computer systems within the organizations(Moitra, 2005). Conclusion Financial crime is explained as any illegal activity that will not comply with the integrity of the international financial disclosures and systems. The financial crime are considered to affect the world economic development since it reduces the attractiveness of the financial system presented by World Bank and International Monetary Committee. In the current financial market, many issues relating to the financial crimes are emerging. Cyber financial risk, tax evasion, money laundering and terrorism financing are the emerging issues relating to the financial crimes. The paper has quantified that financial institutions plays a key role neither in bringing back the sense of improving the financial system or otherwise defaulting the financial growth. The International Monetary Committee, World Bank and organizational top management are advocated to ensure that they promote the integrity and competitiveness of the financial systems. They need to spell on the measures that reduces the cyber financial crime, terrorism financing, money laundering, tax evasion and intentional frauds made by insurance companies. References Abadie, A. Gardeazabal, J., 2008. Terrorism and the world economy. In: s.l.:European Economic Review, pp. 1-27. Bryans, D., 2014. Bitcoin and money laundering: mining for an effective solution. IND: s.n. Clemens, M. A. Kremer, M., 2016. The New Role for the World Bank.. The Journal of Economic Perspectives, 30(1), pp. 53-76. Corbet, S. Gurdgiev, C., 2017. Financial Digital Disruptors and Cyber-Security Risks: Paired and Systemic. s.l.:s.n. Didimo, W., Liotta, G. Montecchiani, 2014. Network visualization for financial crime detection.. Journal of Visual Languages Computing, 25(4), pp. 433-451. FICO, 2017. Bavioral Analytics Attack Fraud, Cyber and Financial Crime. s.l.:s.n. Fors, G., 2017. Cost model evolution of custody.. Journal of Securities Operations Custody, 9(1), pp. 30-37. Freilich, J. D., Chermak, S. M., Belli, R. Gruenewa, 2014. Introducing the United States extremis crime database (ECDB). Terrorism and Political Violence. In: s.l.:s.n., pp. 372-384. Freilich, J. D. LaFree, G., 2016. Measurement Issues in the Study of Terrorism: Introducing the Special Issue. Studies in Conflict and Terrorism. s.l.:s.n. Gottschalk, P., 2016. Investigation and prevention of financial crime: Knowledge management, intelligence strategy and executive leadership.. s.l.:CRC Press. Henninger, P., 2013. Cyber Crime and Financial Crime: The Two Become One. [Online] [Accessed 15 NOV 2013]. Kannan, S. Somasundaram, K., 2017. Autoregressive-based outlier algorithm to detect money laundering activities.. Journal of Money Laundering Control.. Khoyini, G., Sarayi, H. M. Kabiri, s., 2016. Money Laundering in Iran's Law and International Document.. In: s.l.:J. Pol. L, p. 257. Masciandaro, d. e., 2004. Global financial crime: Terrorism, money laundering, and off shore centres.. In: s.l.:Ashgate Publishing, Ltd. Mathers, C., 2004. Crime school: Money laundering: True crime meets the world of business and finance.. s.l.:Firefly Books. Moitra, S., 2005. Developing policies for cybercrime.. European Journal of Crime Criminal Law and Criminal Justice, 13(2), p. 435. Peel, M., 2006. Nigeria-related financial crime and its links with Britain.. In: London: Chatham House. PwC's, 2017. AML and Cyber Financial Crime. [Online] Available at: [Accessed 20 FEB 2017]. Rahman, A. A. Rahman, A. A., 2016. Anti-money laundering law: a new legal regime to combat financial crime in Malaysia?. Journal of Financial Crime, 23(3), pp. 533-541. Rantala, R. ,., 20056. Cybercrime against businesses organization 15(14), p.9.. s.l.:s.n. Ryder, 2017. The financial crisis and financial crime in the United Kingdom: A critical analysis of the response by Financial Regulatory Agencies. The Company Lawyer. In: s.l.:s.n., pp. 4-14. Ryder, N., 2016. Financial crime and the latest trends.. s.l.:s.n. Speer, D., 2000. Redefining borders: The challenges of cybercrime. Crime, Law and Social Change, 34(3). In: s.l.:s.n., pp. 259-273. Sullivan, B. A., Freilich, J. D. Chermak, S. M., 2016. Financial Terror: Financial Crime Schemes Involving Extremists Linked to the American Far Right and al?Qaeda and Affiliated Movements. The Handbook of the Criminology of Terrorism, p.420.. s.l.:s.n. Unger, B., 2014. Money Laundering. In Encyclopedia of Criminology and Criminal Justice. s.l.:Springer New York.. Walker, J., 1999. How big is global money laundering?. Journal of Money Laundering Control, 3(1), pp. 25-37.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.