Financial Crime Threatens Global Security
In today’s digital age, financial crime has evolved to pose a significant threat to global security. The rapid advancement of technology has enabled criminal gangs to operate transnationally and evade detection, with far-reaching consequences that impact not only individuals but also global stability.
Financial Crime Compliance: A Critical Role in Prevention
Financial Crime Compliance plays a vital role in preventing the flow of illicit funds and combating terrorism financing. This crucial function ensures that organizations comply with local and EU regulations, thereby minimizing the risk of money laundering, terrorist financing, and sanctions evasion.
Money Laundering: The Concealment of Criminal Proceeds
Money laundering is a serious threat to national security, as it allows criminals to conceal the origin and ownership of illegal proceeds. This process involves converting or transferring funds derived from criminal activities into seemingly legitimate assets.
- Definition: According to the Prevention of Money Laundering Act, money laundering is “the conversion of transfer of property knowing or suspecting that such property is derived directly or indirectly from, or the proceeds of, criminal activity…”
- Examples: This can include currency, cash deposits, accounts, and even land or other assets.
Terrorist Financing: Supporting Violent Extremism
Terrorist financing involves providing funds to support terrorist acts or organizations. This can come from legal or illegal sources, and is often used to fuel violent extremism.
- Definition: The International Convention for the Suppression of the Financing of Terrorism defines this crime as “providing or collecting funds with the intention that they should be used… in order to carry out” an offense.
- Examples: This can include funding terrorist activities, supporting extremist groups, and promoting hate speech.
Sanctions: Economic Pressure Against Threats to Peace
International sanctions are a key tool in diplomatic efforts to protect national security interests, international law, and defend against threats to global peace. These measures can include financial and economic sanctions, diplomatic sanctions, military sanctions, sports sanctions, and environmental sanctions.
- Examples: Sanctions can be imposed on individuals, organizations, or countries that engage in activities deemed harmful to global stability.
- Regulation: In Malta, sanctions are governed by the National Interest (Enabling Powers) Act, which requires organizations conducting relevant activities or financial business to adhere to applicable sanctions and conduct necessary checks to ensure compliance.
Bribery & Corruption: Abuse of Power for Personal Gain
Bribery and corruption threaten the integrity of institutions and undermine trust in governments. Bribery involves offering or accepting an advantage for illegal or unethical actions, while corruption is defined as dishonest or fraudulent behavior by those in positions of power.
- Types:
- Kickbacks
- Secret commissions
- Facilitation payments
- Influence peddling
- Electoral bribery
- Embezzlement
- Extortion
Conclusion
Financial crime poses a significant threat to global security, requiring concerted efforts to combat money laundering, terrorist financing, sanctions evasion, and bribery & corruption. Financial Crime Compliance plays a vital role in preventing the flow of illicit funds and ensuring that organizations comply with regulations. It is essential for individuals and organizations to be aware of these threats and take proactive steps to prevent financial crime from undermining global stability.