Page 58 - Aug Sept 2016
P. 58
The Washing Machine - Fighting Money Laundering in the Middle East
but a major concern is whether internal * Financial intelligence units have been
auditors have sufficient experience created in accordance with international
and knowledge to perform this testing standards, but some of them lack adequate
efficiently. Moreover, reviews often organization, expertise and independence.
take place infrequently and sometime
after the event. * There are deficiencies in monitoring the
operations of local charities abroad.
Challenges at the National Level
*The presence of underground banking
The governments in the Middle East (Hawala) presents a potential means for
are taking steps towards enforcing laundering funds.
AML/counter-terrorism financing laws, * It is difficult to find a balance between
regulations and guidelines. However, the privacy of individuals’ rights versus
there are several deficiencies in the
legal and financial systems which need the need to protect society against
to be addressed: criminals and terrorists.
Recommendations for Improvement:
* Although money laundering is a
criminal offense, terrorist financing * Implement a nationwide awareness
is not specifically prohibited in some campaign about the risk of money
countries. laundering and terrorism financing. Such
campaigns must be able to send a strong,
* There is often an overreliance on
suspicious transaction reporting convincing message to the public at large
to generate money laundering that financial institutions are implementing
“know your customer” programs with the
investigations
objective of safeguarding the country and
* A large informal cash economy exists, soundness of the financial system from
and many financial transactions do not terrorists or criminals.
enter the banking system.
* Improve the efficiency and independence
of financial intelligence units and
* Cash reporting requirements are
not consistently enforced and some encourage them to provide feedback on
countries do not have currency suspicious transaction reports to reporting
institutions as well as sharing information
reporting requirements for individuals with foreign financial intelligence units.
leaving the country.
58
