Benchmark Visit from Philippines

The Accounting Research Institute (ARI) welcomes two Board of Director members of the Philippine Association of Islamic Accountants (PAIA), Brother Amanoding ESMAIL,  CPA and Sister Soraida ESMAIL, CPA who took time off to visit ARI today.  A collaborative meeting was held between the duo and ARI fellows to discuss: (i) involvement of ARI in the activities of the International Council of Islamic Finance Educators - ICIFE, (ii) ARI's collaboration in co-organising an International Conference on Islamic Finance Profession and Professionals, to be held in Manila in July 2016,  (iii) the establishment of Mindanao Halal Corporation, and (iv) training programs on Islamic Finance for members of the PAIA.

In 2013, the Accounting Research Institute, Universiti Teknologi MARA (UiTM) and the Philippine Association of Islamic Accountants signed a Memorandum of Understanding (MoU) to signify interest and efforts to collaborate, specifically in the area of Islamic Finance research.  One of the first collaborative projects organised by both entities was the organisation of an International Conference on Islamic Finance in 2014 in Cagayan, Mindanao.

ARI Strategic Planning 2016-2020

The Accounting Research Institute (ARI) organizes a two-day Strategic Planning workshop for 2016 - 2020.
Thank you Associate Professors Dr Adibah and Dr Ahmad Naqiuddin who facilitated the two-day workshop.  ARI focuses on its five strategic thrusts: (i) Research and Development, (ii) Human Capital, (iii) Income Generation, (iv) Networking & Linkages and (v) Institutional and Research Governance

Money Laundering and Terrorism Financing are Serious International Offences

Many countries globally have legislated the offences of money laundering (ML) and terrorism financing (TF) and consider both as serious or predicate offences.  Many legislation on ML/TF provide wide-ranging investigation powers including powers for law enforcement agencies and Public Prosecutor to freeze and seize properties that are involved or suspected to be involved in money laundering or terrorism financing offences, and the power of the court to forfeit properties derived from the proceeds of serious crimes.  

Money laundering and the financing of terrorism can have devastating economic and social consequences for countries, especially those in the process of development and those with fragile financial systems. The economy, society, and ultimately the security of countries used as money-laundering platforms are all imperiled. Here are just a few examples of how illicit financial flows can affect the economy and institutions of the host country (excerpts of various sources):

• Financial institutions that accept illegal funds cannot rely on those funds as a stable deposit base. Large amounts of laundered funds are likely to be suddenly wired out to other financial markets as part of the laundering process, threatening the institution’s liquidity and solvency. A financial institution’s reputation and integrity can be irrevocably harmed if involved in money laundering or financing terrorism.
• Local merchants and businesses may find that they cannot compete with front companies organized to launder and conceal illicit funds. Many such front companies offer their services and goods at below-market rates and even at a loss. Because their primary objective is the laundering of money, they do not need to compete in the marketplace and make a profit for their owners.
• Money laundering may also distort some economic sectors and create instability in their markets. Money launderers may channel funds to sectors or areas where funds are unlikely to be discovered whether or not investment is needed or real returns are offered. The often sudden departure of investments from those sectors may impair the industries involved.
• Currencies and interest rates can be distorted by money launderers’ investment practices, based as they are upon factors other than market returns.
• Money laundering and terrorist financing do nothing for the reputation of the host country. The loss of investor confidence that follow revelations of large-scale involvement in such activities can sharply diminish opportunities for growth. Once a country’s reputation is tarnished, it  takes years to repair.

Research on International Financial Crime

A new book, Research Handbook on International Financial Crime has been published recently by the University of Cambridge, UK.  The book posits  that a significant proportion of serious crime is economically motivated. Almost all financial crimes will be either motivated by greed, or the desire to cover up misconduct. This Handbook addresses financial crimes such as fraud, corruption and money laundering, and highlights both the risks presented by these crimes, as well as their impact on the economy. The contributors cover the practical issues on the topic on a transnational level, both in terms of the crimes and the steps taken to control them. They place an emphasis on the prevention, disruption and control of financial crime. Essentially, the book discusses, in eight parts, the nature and characteristics of economic and financial crime, the enterprise of crime, business crime, the financial sector at risk, fraud, corruption, the proceeds of financial and economic crime, and enforcement and control.  Researchers and academics interested to explore research in financial criminology will find this book to be an invaluable resource. Practitioners, including lawyers, accountants, auditors, forensic accountants, compliance and risk managements officers, law enforcement officers, and policy makers will also find the points raised to be of practical use.