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Eastern and Southern Africa Anti-Money Laundering Group
The Initial Problem
Introduction: The problem that is money laundering, corruption and terrorism
Money laundering, corruption and terrorism are rife in East and Southern Africa. This unfortunate phenomenon is largely attributed to the abject poverty that at times seems to be endemic in this region of the world. The aforementioned problems only aggravate an already awry situation hence they further consign the region and its inhabitants into unspeakable squalor. This dissertation proposal seeks authority to undertake a research into ways and means of combating money laundering, terrorism and corruption in this region so for its wellbeing as well as that of the international community.
International obligation towards money laundering
Terrorist activities have been on the increase in the recent past the world over hence surveys have to be carried out in order to combat financial money laundering. A key objective of the study is to figure out the merit of the BSC to this sector.
International policies and legislations
Nations all over the world are striving to implement policies and legislations that are aimed to discourage money laundering, terrorism and corruption. In the United States for instance there is the US patriot Act that is intended to boost the nations guard against terrorism. They also have the money laundering provisions that aim the financial make-up of terrorist groups and those of criminal organizations.
Creation of ESAAMLG
ESAAMLG came about with the sole purpose of combating money laundering that is prevalent in Eastern and Southern Africa. The plan was to formulate policies that are going to strengthen the guards of member countries against money launderers who are running riot in the said countries.
FATF forty recommendations
The Financial Action Task Force recommends the integration of East and Southern African countries policies in their attempts to combat money laundering.
Purpose of dissertation
Against this background, this dissertation sets out to find out more about money laundering, corruption and terrorism financing. This dissertation seeks to explore how the said vices are perpetrated and subsequently how to guard against them. Ideal measures and practices necessary for combating money laundering, terrorism financing and corruption will be identified as a result of this research leading to contribution to this field of knowledge.
ESAAMLG Performance
Introduction
Success of ESAAMLG
Sadly, there is little to write home about the success of the ESAAMLG when it comes to the success that they have realized in fighting money laundering in Eastern and Southern African countries. If any thing, money launderers have shored up their activities in these regions; a clear indication that these countries are losing the war to the money launderers. The reason these countries have had little success in fighting money laundering in their respective nations can be attributed to a lot of factors most of which have been highlighted in the other sections of this research.
FATF Implementation by Governments
Financial Action Task Force has not been fully implemented by ESAAMLG governments or where they have been implemented they are not accomplishing their intended purpose. There are a number of reasons as to why this is so but the most prominent one is the fact that these governments are ridden with extreme corruption from top to bottom (Fatf, np).
Measures and practices of individual States
There are those nations that are members of ESAAMLG that have done an exemplary job in their efforts to fight money laundering relative to their counterparts. A case in point is Kenya; this country recently inaugurated a new constitution that will go a long way towards aiding the fight against money laundering.
Strategy in addressing money laundering issues
Most of the perpetrators of money laundering are foreigners. Therefore, the first strategy that is used by most nations is implementing policies that are going to restrict the access of foreigners to financial services. This has proven to be very effective in the countries that have implemented them such as the United States.
Effects of money laundering on developing states
The adverse effects of money laundering cannot be overemphasized.
But by far the most devastating effects of money laundering to any nation apart from developing nations is the erosion of the value of that nations currency. This has the domino effect of making this particular country unable to afford imports since it has a weak currency.
Example of Money Laundering
A good example of money laundering is passing off money that has been illegally acquired as legit by way of opening a casino and letting people gamble for such kind of money. The end result is obvious because as the saying goes the house always wins.
Challenges in implementation by ESAAMLG
The challenges that ESAAMLGs encounter are well known. Rampant corruption within government ranks is the principal impediment. There are also weak institutions that do not help much in the fight against money laundering.
Corruption
Corruption is the number one impediment when it comes to combating money laundering since the beneficiaries of this illicit activity are the same people who are expected to mount a campaign against the vice.
Abuse of global financial network
The abuse of global financial networks is also another way of perpetrating money laundering. This is also done by government officials in high places who have access to funds from global financial networks such as the international monetary fund.
Effects on financial institutions
Financial institutions are very critical in terms of either fighting or abetting money laundering. This is because they are the conduits that launderers use to carry out their activities. There are some financial institutions that are set up for the sole reason of laundering money that has been acquired illegally.
Impact of financial sectors in developing economies
As earlier indicated, the fight against money laundering can considerably benefit or suffer as a result of the actions of financial institutions. The bottom line though is the fact that financial institutions can be extremely instrumental in dealing with money laundering.
Contribution to knowledge
Extensive research has been carried out in the past with regard to Anti Money Laundering, Anti Corruption and Counter-Terrorism Financing activities in developing countries. This was prompted by the fact that international communities were becoming increasingly concerned with the growing incidence of organized crime, corruption, and terrorism and the devastating effect these problems have on peace, security and development.
ESAAMLGS Impacts
Introduction
ESAAMLGS were instituted to deal with the money launderers who were having a field day in the countries that have been mentioned. This research sets out to establish whether their formation of this body has had any impact with regard to containing the spread of money laundering.
Institutional and structural problems in the ESAAMLG
The ESAAMLG has encountered a number of challenges with institutional and structural problems being among those challenges. These came about because the member countries implemented divergent policies in their attempts to get rid of money laundering in their respective countries.
Measures and practices that these governments need to implement
The governments of member states need to consider adopting or implementing similar policies that will make their fight against money laundering easier.
What operational tools should these countries deploy?
These governments should first of all streamline and strengthen the institutions that are charged with the responsibility of fighting money laundering.
Roles played by bureaucracy in the governments of the developing countries
Bureaucracy hampers the fight against money laundering in developing countries in that, in order to implement a policy to be used to fight against money laundering, one has to pass through a lot of red tape hence wasting time while the money-launderers get ahead of the system and the officials, making it hard to apprehend them.
How do the perpetrators of money laundering use their organizational capabilities?
Money launderers have got extensive connections with all the relevant players involved in money laundering. These players range from prominent business people, politicians and workers of financial institutions. With this vast network of well placed people, money launderers can pull their strings from anywhere and whenever so long as they have greased these peoples palms making their work very easy.
Problems and challenges bedeviling governments
There are several problems and challenges bedeviling governments and among the chief constraints in the fight against the aforementioned vices is extreme poverty that seems to be endemic in the regions where these vices are most prevalent. Extreme poverty leads to a situation that makes the residents easy targets of the perpetrators of the vices of corruption, money laundering and terrorism.
Where poverty is rampant illiteracy levels are equally high. Institutions that have been established in these countries to fight these crimes are extremely weak. Weak judicial systems give perpetrators an easy time to carry out their gory activities.
Operational tools at the governments disposal
The operational tools at the disposal of these governments will also be analyzed to determine their potency and find out if there is need for the deployment of additional tools to effectively combat the relevant problems.
Methodology
The fundamental methodology used in this research is to gather empirical data, use secondary sources of information as well as primary of the developing countries response to terrorism, money laundering and corruption based on previous studies as well as publications that explore the experiences of the developing countries in their attempt to deal with problems and issues occasioned by terrorism, money laundering and corruption.
Empirical data
Empirical data is also going to be among the information that will inform the findings of the research.
Secondary sources of information
The secondary sources of information to be used in conducting this research will include private as well as public documents among others that may contain information regarding the topic at hand.
Primary data
Primary sources of information that are going to form part of the sources that information with regard to undertaking this research will be derived from. In this research the principal sources of primary information will be questionnaires and interviews of inhabitants in the affected area. Residents residing in areas where terrorism, money laundering and corruption are prevalent will be interviewed.
The questionnaires intended to be used in conducting the research will contain a certain set of questions that will seek to establish whether there are any accomplices of these crimes in high places hence the ease with which these crimes are perpetrated in the aforementioned countries.
Demonstration of new knowledge
Perpetrators of money laundering, financing of terrorism and corruption keep inventing novel and ingenious ways of carrying out their insidious activities. Research carried out in the past may at some point be rendered irrelevant on account of being overtaken by events. This is why it is necessary for researchers to keep carrying out researchers constantly so that they acquaint themselves with new developments in their respective fields of study. This research will therefore serve to add more knowledge to the one that exists currently.
Importance of efforts to solve money laundering
The importance of the efforts to address the problems associated with money laundering, terrorism and corruption cannot be stressed enough. Money laundering and terrorist financing undermine national financial systems. Unreliable sources of investment capital such as illegal establishments or financial assets enhance business risks. Increased risks lead to increase in barriers to economic activity and development. An example; money laundering destabilizes national economies by increasing demand for cash, accentuating volatility of interest as well as exchange rates.
Reasons for fighting terrorism
They aim to fight corruption in their financial sector as well as improving the investment climate so as to attract potential investors. These countries would also like their economies to increase access to world financial markets. As a result, it is in their best interest to strive to conform to international codes that aim to eradicate the abuse of the global financial network. A strong financial sector is an important ingredient for countries that harbor aspirations to be members of the global financial community.
Findings and recommendations
Potential findings
As a result of the research I expect to determine what governments of developing countries are doing or are not doing right in their effort to fight terrorism, corruption and money laundering.
Weak anti money laundering legislations
Weak anti money laundering legislations are an impediment to the fight against the vices. Robust legislations need to be enacted to enhance the fight against the aforementioned vices. Adopting a comprehensive legal framework will go a long way towards containing corruption, money laundering and financing of terrorism. The Anti Money Laundering, Anti Corruption and Counter-Terrorism Financing law needs to explicitly define money laundering and terrorist financing as predicate offenses as well as expand the scope of covered institutions. The law should allow the authorities to punish the criminal act.
Importance of collaboration in the war against terrorism
All parties are required to understand the importance of collaboration and should be willing to cooperate if the war against terrorism, money laundering and corruption is to succeed.
Whether dissertation will be guided by a theoretical framework
The dissertation will be guided by a theoretical framework and this proposal intends to find out the challenges and problems faced by these governments while trying to implement policies designed to address the problems posed by money laundering, terrorism and corruption.
Statement about the research
The research intended to be carried out will set out to establish whether the fight against money laundering, terrorism financing and corruption has been successful. Ways and means of enhancing the fight the three vices will also be explored.
This proposal focuses on three key questions with regard to developing countries response to terrorism:
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What are the institutional and structural problems that developing countries have to contend with in their effort of effectively and efficiently combating terrorism, money laundering and corruption?
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What measures and practices that these governments need to implement that will enhance their effectiveness and efficiency in addressing the problems posed by terrorism, corruption and money laundering?
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What operational tools should these countries deploy in the war on terror, money laundering and corruption? While attempting to answer these three fundamental questions, other subsidiary questions emerge:
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What were the roles played by bureaucracy in the governments of the developing countries versus their national policies to fight terrorism, corruption and money laundering?
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How do the perpetrators of terrorism, money laundering and corruption use their organizational capabilities of ideology, leadership and recruitment and operational tools of command, control, training and logistics in carrying out their insidious activities?
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What are the capabilities of governments of developing countries and the practices they need to adopt to heighten their chance of effectively and efficiently dealing with corruption, terrorism and money laundering?
Summary and conclusion
The devastating effects of money laundering to any nation cannot be over emphasized. They can even lead to the collapse of a country if not taken care of at the initial stages.
This is why countries the world over go to great lengths to alleviate this insidious activity from not only their country but also assist other countries does the same as well because of the spill over effect that this vice has.
It is evident that in order to succeed in eliminating or controlling this vice, there has to be a concerted effort from all fronts of the nation. Where the effort is fragmented like its being witnessed in Eastern and Southern Africa, the efforts that will have been used in trying to combat the crime will count for nothing. This is so because of the organized nature of the money launderers. If there is any slackness in the system they will not hesitate to exploit it.
Time scale
The research is set to commence from 2nd January 2012. In this day the researcher will commence analyzing all the relevant secondary material that he can find. This process is expected to last for a week.
After the analysis of secondary materials on 9th January, the researcher will embark on interviewing people residing in the areas that form the subject of the research. This exercise is also expected last a week.
On 16th January the handing of questionnaires to respondents so that they can fill them will go underway and its also expected to last just about the same time as the previous exercises.
On 23rd January, the researcher will be expected to have collected all the relevant information and should by now analyze it to draw inferences with respect to the information he will have obtained. This process is expected to last for two weeks after which he shall prepare the final research document based on the information he has at that point in time.
Works Cited
Fatf. Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG). FATF-GAFI. 2009. Web.
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