AbstractMuch have been written in the past regarding money laundering and its characteristics and its impact to the global economy. Nevertheless, minimum attention has been paid to how dimensions of money laundering, national and institutional culture, and financial infrastructure have caused a major setback in compliance with Financial Action Task Force (FATF) anti-money laundering recommendations in East Africa, (Kenya, Tanzania and Uganda). This research project explores how dimensions of money laundering, national and institutional culture and financial infrastructure have contributed to a struggle to comply with these anti-money laundering recommendations.
The literature is reviewed against the following themes; Money laundering issues in East Africa (dimensions of money laundering), The national and institutional culture and how it has influenced money laundering in East Africa (using institutional theory, has helped to guide an understanding of how National and institutions culture, are possible factors that determine management and institutional practices), The financial infrastructure and the nature of the economy and lastly, The FATF anti money laundering recommendations. Specifically, the seven objectives of this research study are: to assess money laundering awareness in East Africa; to assess the benefits of information sharing and how it can be used to detect the flow of terrorist finances in East Africa; to assess the benefits of training to Know Your Customer (KYC) in East Africa; to investigate corruption culture and how is has made it difficult to determine the wealth of politically exposed persons in East Africa; to investigate and analyse the nature of financial Infrastructure in East Africa; to assess the current money laundering situation in East Africa; and to assess whether the current FATF anti money laundering recommendations cater for the needs of East African countries.
This research study is designed to apply mixed methods specifically, convergent parallel mixed methods, using both questionnaire and interview methods to investigate and analyse the compliance of FATF anti-money laundering recommendations among banks in East Africa. Using a sample of bank management officials and frontline staff, within three countries in East Africa, first, the research study applies the use of a questionnaire from a sample of 206 front line staff members and 103 management officials to explore the compliance of anti-money laundering recommendations. Secondly, using interviews with a sample of 10 top management officials in the banking sector in East Africa. The qualitative research also reports the findings on national and institutional culture, financial infrastructure and dimensions of money laundering as identified in the literature.
The findings from both quantitative and qualitative have helped to expand the understanding on the nature of these recommendations on how dimensions of money laundering, national and institutional culture and financial infrastructure have affected the compliance of FATF anti-money laundering recommendations in East Africa. The study identifies that effective compliance of anti-money laundering recommendations in East Africa, is dependent on the following issues being addressed: The issue of national and institutional culture, specifically the issue of corruption, Politically Exposed Persons (PEPs) and awareness of money laundering; The issue of financial infrastructure, specifically addressing the issue of cash based economy, accessibility of financial services, and formalities in opening and maintaining bank accounts: finally the issue of dimensions of money laundering specifically, cooperation among banks, information sharing and transaction monitoring.
This research study contributes to the body of knowledge in the area of money laundering specifically in the field of forensic accounting. Using convergent parallel mixed methods to explore the compliance of FATF anti-money laundering recommendations. Exploiting findings from both quantitative and qualitative have helped to expand the understanding on the nature of these anti-money laundering recommendations especially, how dimensions of money laundering, national and institutional culture, and financial infrastructure have affected the compliance of FATF anti-money laundering recommendations based on East African perspective.
|Date of Award
|Brian Telford (Supervisor), Ricky Li (Supervisor) & Jonathan Evans (Supervisor)