Islamic Finance and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)

Kyriakos-Saad, Nadim; Vasquez, Manuel; Khoury, Chady El; Murr, Arz El

doi:10.2139/ssrn.2754948

Cited by 2 publications

(1 citation statement)

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“…Islamic banks have been penalised for failure to comply with AML regulations (Abdul latif and Abdul- Rahman, 2018). Therefore, it is necessary to have specific AML regulations for Islamic banking (Nadim, 2016) to avoid misconceptions about ML/TF associated with Islamic finance.…”

Section: Customer Due Diligence In Pakistanmentioning

confidence: 99%

Challenges for financial institutes in implementing robust customer due diligence in Pakistan

Sultan

Mohamed²

2022

JMLC

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Purpose This study aims to investigates the challenges faced by Pakistani financial institutes (FIs) and regulators in implementing robust customer due diligence measures. Design/methodology/approach The study adopted a qualitative technique. Twenty-five semi-structured interviews with chief compliance officers and regulators were conducted. Findings The study concluded that the main challenges are name screening, obsolete nature and quality of databases and undocumented, unregistered and unregulated portions of the economy and society. In addition, identification and verification of high-profile customers and beneficial owners, lack of specialised staff and cost of compliance are the significant challenges faced by FIs in Pakistan. Originality/value The Pakistani financial sector is less researched on anti-money laundering front, especially concerning customer due diligence. Further, the social, cultural and economic norms of the Indian sub-continent are more or less the same. Therefore, the study findings could be generalised to the region.

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Section: Customer Due Diligence In Pakistanmentioning

confidence: 99%

Challenges for financial institutes in implementing robust customer due diligence in Pakistan

Sultan

Mohamed²

2022

JMLC

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Cleanliness is next to godliness: can money laundering be sharia-compliant?

Alenazi,

Chazi,

M Alotaibi

et al. 2024

JFC

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Purpose The purpose of this paper is to extend the current research to create a conceptual framework for the Islamic perspective on money-laundering (ML) activities. Design/methodology/approach The authors use a qualitative research approach through an analysis of texts from the Holy Quran, the traditions of the Prophet Muhammad (PBUH) and Islamic scholars’ jurisprudence, as well as a literature review of the research regarding money laundering within the scope of Sharia law. Findings The authors document three examples of “grey areas” remaining for consideration within the context of anti-money laundering (AML) policy at Islamic banks and Islamic insurance companies: the proceeds of the secular predicate crimes of tax evasion, grey and black-market employment and inheritance issues. Research limitations/implications The authors open new avenues for future research to examine the ML and other financial crimes by comparing different legal jurisdictions to Sharia laws, i.e. country-by-country analysis. Future research can also further grain the Sharia perspective of ML and other financial processes by examining the detailed views of different Islamic schools of thought (i.e. Hanafi, Maliki, Shafi’i and Hanbali) or by considering additional ML typologies in light of Sharia law. Practical implications The results are of interest for policymakers, whereas by acknowledging the differences between Sharia and civil laws and their complementarity, more accurate regulations can be set to establish prudent operational AML/CTF frameworks for Islamic banks and insurance companies. Social implications For the Sharia advisory boards of Islamic financial and designated non-financial businesses and professions to enhance their monitory role as an additional layer of AML control. Originality/value To the best of the authors’ knowledge, this paper is the first to provide consideration to the distinction between the concepts of secular illegality and Sharia prohibition in determining the permissible scope of activities to which Know Your Customer compliance should apply at Islamic banks and insurance companies.

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Islamic Finance and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)

Cited by 2 publications

References 0 publications

Challenges for financial institutes in implementing robust customer due diligence in Pakistan

Challenges for financial institutes in implementing robust customer due diligence in Pakistan

Cleanliness is next to godliness: can money laundering be sharia-compliant?

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