An INTERNATIONAL Assessment of the Consistency of Findings of VARIOUS Anti-Money Laundering and Anti-Corruption Initiatives

OBJECTIVES This research seeks to: assess the consistency (or similarity) of findings of various anti-money laundering and anti-corruption initiatives inquire into the existence of a consistency of relationship (or pattern in the relationship) between: the results of anti-money laundering and anti- corruption initiatives of countries and countries economic wellbeing

OBJECTIVES Assessing the consistency (similarity) of findings of various anti- money laundering and anti-corruption initiatives The search for Consistency of Findings to derive from a consideration of the results of: The Financial Action Task Force’s (FAFT’s) 4th round of mutual evaluations (commenced 2014 and to extend beyond 2023) Transparency Internationals 2016 Corruption Perception Index The United States Department of State, Bureau for International Narcotics and Law Enforcement Affairs, International Narcotics Control Strategy Report, March 2017

countries economic wellbeing OBJECTIVES Inquiry into the existence of a consistency of/pattern in the relationship between: the results of anti-money laundering and anti- corruption initiatives of countries and countries economic wellbeing The World Banks Gross National Income per Capita Country Classifications, March 2017, are to be further introduced into the comparisons

FOUR DIFFERENT DATA SOURCES Financial Action Task Force - approximately 200 countries in the fatf global network TRANSPARENCY INTERNATIONAL – 2017 Corruption Perception Index includes results for 176 countries United States Department of State, Bureau for International Narcotics and Law Enforcement Affairs –identifies 88 major money laundering countries/jurisdictions of primary concern WORLD BANK – Assigns the worlds economies into 4 income groups: High, Upper middle, Lower middle, Low

FOUR DIFFERENT DATA SOURCES

Money Laundering Corruption Organised Crime Economic Wellbeing DEFINITIONS Money Laundering Corruption Organised Crime Economic Wellbeing

Money Laundering DEFINITIONS Source United Nations 2000 Convention Against Transnational Organized Crime, also known as the Palermo Convention Three part definition – Money Laundering is: “The conversion or transfer of property, knowing it is derived from a criminal offense, for the purpose of concealing or disguising its illicit origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of his actions”. “The concealment or disguising of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property knowing that it is derived from a criminal offense”. “The acquisition, possession or use of property, knowing at the time of its receipt that it was derived from a criminal offense or from participation in a crime”

Articles 15-22 of the United Nations Convention Against Corruption DEFINITIONS Corruption Source: Articles 15-22 of the United Nations Convention Against Corruption the active and passive bribery of domestic and foreign public officials as well as officials from international organisations, the embezzlement or diversion of public property by a public official, trading in influence or illicit enrichment by public officials, and bribery and embezzlement in the private sector

Van Dijk, 2007 quoting Kenney and Finckenauer 1995; Levi 2002 DEFINITIONS Organised Crime Source: Van Dijk, 2007 quoting Kenney and Finckenauer 1995; Levi 2002 Organized crime refers to criminal activities for material benefit by groups that engage in extreme violence, corruption of public officials, including law enforcement and judicial officers, penetration of the legitimate economy (e.g. through racketeering and money- laundering) and interference in the political process

Economic Wellbeing DEFINITIONS Gross National Income per Capita refers to the value of the income claims that are generated by production in a country, as adjusted for a country’s population count Gross National Income per Capita is used as a proxy for economic wellbeing for the purpose of this dissertation. Gross National Income per Capita is utilized for convenience, deriving from the production of the statistic by the World Bank, on an annual basis, for all World Bank recognised countries or jurisdictions Use of Gross National Income per capita therefore allows the anti-money laundering efforts of various countries to be evaluated against the same standard or a consistent methodology. This supports effective comparison

Research Problem Money Laundering - threat to the international financial system Controlling Money Laundering – Difficult because: Money laundering occurs in the underground economy – not directly observable Differences in anti-money laundering initiatives across countries allow for jurisdictional arbitrage (Unger, 2007)

Motivation for the study Financial Action Task Force (FATF) – principal player in the global fight against money laundering A 2017 Research Finding ‘Do countries consistently engage in misinforming the international community about their efforts to combat money laundering? Evidence using Benford’s Law – Deleanu (2017) Deleanu applies Benford’s Law to the work of the FATF Delenanu cannot reject his hypothesis

Justification FOR the study Deleanu’s research findings do not bolster confidence in the results of the work of the FATF with respect to the FATF’S pronouncements on the effectiveness of countries anti-money laundering initiatives Central to Deleanu’s research methodology is the use of Benford’s Law. The researcher seeks to use an alternative theory and methodology to evaluate the work of the FATF. The researcher seeks to garner evidence to establish the accuracy of FATF’s findings, by establishing whether there is consistency (or similarity) in the findings of the FATF with findings deriving from other anti-money laundering and anti-corruption initiatives The researcher seeks to base her methodology in the Philosophical Theories of Truth. The researcher seeks to find evidence that supports a decision on the accuracy of the work of the FATF using the Correspondence, Coherence and Consensus Theories of Truth.

RESEARCH QUESTIONS The researcher seeks to explore double research questions as follows: Is there a similarity of finding or a similarity in the conclusion deriving from the work of various bodies with respect to the results or outcome of anti-money laundering initiatives of countries? Is there a pattern in the relationship between the level of success of a country’s anti-money laundering/anti-corruption effort and the country’s level of economic wellbeing? To restate this question, is there consistency between the level of success of countries anti-money laundering initiatives and the country’s Gross National Income per capita, per category as determined by the World Bank?

Methodology In an effort to answer research questions, the researcher will utilize the results or findings of existing studies, as conducted by the FATF, Transparency International and the United States Bureau for International Narcotics and Law Enforcement Affairs These research findings are qualitative in nature. The researcher will code these research findings, for the purpose of converting the findings into quantitative data. The researcher will apply quantitative data as input into multivariate statistical models for the purpose of deriving conclusions

Concluding Remarks A decision is yet to be made with respect to the specific multivariate statistical technique that will be employed. Findings of previous research works, which were derived largely by the use of qualitative methodologies will now be subjected to quantitative testing in a search for consistency in findings. The writer of this dissertation is of the view that the superiority of a mixed methods approach derives from its pragmatism. It is therefore contemplated that a quantitative enquiry may now produce findings which may need to be contextualized using a qualitative approach.