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Article
Publication date: 1 July 2006

Antonello Biagioli

The purpose of this paper is to develop reflections on the contribution that innovative research and proper methodology can give to the fight against financial and economic crime…

345

Abstract

Purpose

The purpose of this paper is to develop reflections on the contribution that innovative research and proper methodology can give to the fight against financial and economic crime, mentioning some potential instances of concrete application deriving from the Italian financial intelligence unit's experience and know‐how.

Design/methodology/approach

The paper sketches the Italian system's main feature and the UIC's main aim, which is not to run after the single criminal, but rather to find out how a pathology reveals itself because this may be the starting point for further investigative actions. It shows how over time UIC focused on developing special abilities and proper instruments, to search for significant clues of money laundering and terrorist financing phenomena, which deserve the enforcement's attention. Meeting this challenge requires commitment, and a continuous effort of research and methodological refinement.

Findings

Just reacting to financial crime (through the traditional means of investigation, information exchange, international co‐operation, punishment, etc.) is not enough. We need to prevent it, preserving the system from its threat. A better knowledge will allow us to model, simulate and forecast criminal action more accurately, and to intervene more properly to prevent it. Collecting and crossing information from different aspects and approaches allow the transformation of information into systemic knowledge, which in turn we can use for developing further information.

Research limitations/implications

The computing power and speed, the use of “intelligent” search engines and the application of statistical methodologies interact to derive meaningful pictures, to give shape to decisive conditions and descriptive indications. Different, complementary approaches have been worked out by aiming at modelling illicit behaviour directly.

Practical implications

Synergies are essential in this regard. For these goals to be achieved, the contribution from everyone's expertise and knowledge is precious and may prove crucial. Co‐operative relationships have to be developed with similar qualified national and international research centres.

Originality/value

The paper addresses regulators, enforcers and academics, showing how they can take advantage of developing synergies between innovative methodology and their specific expertise in the field of anti‐money‐laundering and anti‐terrorism‐financing action.

Details

Journal of Financial Crime, vol. 13 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 15 May 2007

Antonello Biagioli and Massimo Nardo

The paper aims to address regulators, enforcers and the academy, presenting reflections on some research‐driven innovative approaches, strategies and tools in the fight against…

673

Abstract

Purpose

The paper aims to address regulators, enforcers and the academy, presenting reflections on some research‐driven innovative approaches, strategies and tools in the fight against financial and economic crime, with reference to some instances of concrete application deriving from the Italian FIU's experience and know‐how.

Design/methodology/approach

The paper focuses on the need for a systemic approach both in considering the problems of the regulatory/operational apparatus for combating financial crime (including evaluation issues) and in identifying solutions devised to improve such apparatus and its results. This approach cannot be detached from a methodological attitude based on synergies between the various parts involved.

Findings

In the light of such systemic approach, new perspectives and innovative ideas are put forward with reference to some major topics of the strategies for combating financial crime. These refer to themes such as measuring AML/CTF costs and benefits, bridging regulatory and professional frontiers, modelling and monitoring the status of the financial system and the behaviour therein, developing prevention tools, integrating interdisciplinary knowledge, and profiting from research.

Research limitations/implications

A systemic approach in understanding and fighting financial crime and its complex issues implies pooling together knowledge and expertise gathered under different complementary disciplines. This may provide information on the manifold sides and tinges of the phenomenon. By the same token, it is essential to take into consideration the systemic effects that specific action undertaken by the authorities may entail due to the subsequent reactions from other parts in the system.

Practical implications

Data provided by the system offer a privileged practical basis in order to model the system's structure and understand its dynamics and its reactions to endogenous and exogenous impulses.

Originality/value

The paper explores themes and issues to which the international community is becoming increasingly sensitive, and which would certainly benefit from innovative vision and approach. The ideas and solutions expressed surely need further development, test and discussion, but they are bound to become part of the most significant prospective challenges in the combat against economic and financial crime.

Details

Journal of Financial Crime, vol. 14 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 4 January 2008

Antonello Biagioli

The aim of this paper is to stimulate a reflection on some issues concerning the measurement of the magnitude of money laundering.

1429

Abstract

Purpose

The aim of this paper is to stimulate a reflection on some issues concerning the measurement of the magnitude of money laundering.

Design/methodology/approach

A survey of various research works devoted to the measurement of the volume of laundered funds is presented. Focussing mainly on quantitative approaches based on statistical methodologies, the paper provides hints on the modelling techniques used to estimate money laundering. Specific attention is paid to the relationship between criminal proceeds, laundered funds and asset seizure, unifying in the same stream of thought the whole process that goes from the perpetration of an offence to the repression of crimes through AML and CTF measures.

Findings

The paper takes the move from empirical considerations and findings, and develops wider reflections on the effectiveness of AML and CTF actions. Following a cost/benefit approach, the paper focuses on the possibility and meaning of testing and rating both the weight of laundered funds within the legal economy and the successfulness of AML/CTF measures in terms of frozen and seized assets. The relationship between the seriousness and intensity of a crime and the burden imposed on the society (in terms of compliance and limitations to freedom) is also questioned.

Research limitations/implications

The paper tends to concentrate on the factors that may influence the estimation of laundered funds when quantitative measurement techniques are used. Reference is made to some sectors of economic and financial activity that might be more prone to criminal infiltration and considerations of qualitative character are also part of the author's speculations. Yet, purposely, the potential contributions from other disciplines (such as, criminology and economics) are only mentioned and not fully explored.

Practical implications

The paper openly revives practical questions concerning the estimation of phenomena of financial crime and highlights clearly how the quantification of money laundering may be relevant in terms of the potential impact of the flow of illegal funds on the legal economy, the assessment of risk in the financial sector and the definition of effective and proportionate countermeasures.

Originality/value

The paper addresses questions that have long attracted international attention and interest regarding the costs and benefits of the system of control of and fight against phenomena of money laundering and terrorism financing; as well as the need of revamping empirical research along new, more efficient, shared methodologies. The author underlines explicitly how quantitative estimations may influence the perception of the relevance of such phenomena, as well as the adoption of prevention and repression measures. An original argument is developed regarding either a risk of underestimating financial crime, with a consequent reduction of the effort devoted to its fight and prevention, or the risk of overestimating the phenomenon, which in turn might impose unnecessary burdens on the society.

Details

Journal of Money Laundering Control, vol. 11 no. 1
Type: Research Article
ISSN: 1368-5201

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