Global Criminal Networks: The Hidden Threat to Our Economy
A complex web of criminal organizations has been operating across the globe, using digital technology to evade detection and wreak havoc on our financial systems. Financial crime compliance experts warn that these networks are linked to violent crime and even terrorism.
The Scope of the Problem
The scope of the problem is staggering. Stolen funds can cross borders, both physical and virtual, before reaching their final destination. The impact is not limited to economic losses; it also compromises national security and undermines trust in our financial institutions.
Combatting the Threat
To combat this threat, governments and regulatory bodies have established Financial Crime Compliance (FCC) departments. These teams work tirelessly to identify, assess, advise, monitor, and report on the financial crime risk faced by organizations.
What is Financial Crime Compliance?
Financial crime compliance looks at three key aspects:
- Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT): The process by which criminals conceal the true origin and ownership of proceeds from illegal activities.
- Sanctions: Economic and political measures designed to protect national security interests, defend against threats to international peace and security, and enforce international law.
- Anti-Bribery and Corruption (AB&C): The offering or accepting of advantages for illegal or unethical actions, and the abuse of public or private office for personal gain.
Money Laundering
Money laundering is the process by which criminals conceal the true origin and ownership of proceeds from illegal activities. It’s a complex web of transactions designed to disguise the source of funds.
Definition
The Prevention of Money Laundering Act defines money laundering as “the conversion, transfer, or disposition of property knowing or suspecting that such property is derived directly or indirectly from criminal activity.”
Financing Terrorism
Terrorist financing involves the solicitation, collection, or provision of funds with the intention of supporting terrorist acts or organizations. This can come from both legal and illegal sources.
Definition
The International Convention for the Suppression of the Financing of Terrorism defines the crime as providing or collecting funds “with the intention that they should be used… in order to carry out an offense within the scope of the Convention.”
Sanctions
International sanctions are economic and political measures designed to protect national security interests, defend against threats to international peace and security, and enforce international law.
Governance in Malta
In Malta, sanctions are governed by the National Interest (Enabling Powers) Act and monitored by the Sanctions Monitoring Board. All sanctions issued by the European Union, the United Nations Security Council, and the Sanctions Monitoring Board are directly applicable in Malta.
Bribery and Corruption
Bribery refers to the offering or accepting of advantages for illegal or unethical actions. Corruption is the abuse of public or private office for personal gain, often through bribery.
Forms of Bribery and Corruption
The forms of bribery and corruption are numerous, including:
- Kickbacks
- Secret commissions
- Facilitation payments
- Influence peddling
- Electoral bribery
- Embezzlement
- Extortion
Conclusion
Financial crime compliance is a critical component in our fight against organized criminal networks. By understanding the complexities of money laundering, terrorist financing, sanctions, and bribery and corruption, we can better equip ourselves to combat these threats and protect our economy from harm.