The securities industry faces a real threat from being used by money launderers and unless defences are tightened firms could be used to both generate and disguise illicit proceeds. This is according to the Financial Action Task Force on Money Laundering, which has identified a number of red flags and indicators to raise awareness of the problems. The FATF has produced an 86-page report (PDF) in a bid to encourage industry organisations, regulators and law enforcement agencies to produce further work on the subject, which was first touched upon by FATF in its 2002 report.
A FATF spokesman in Paris said that the work had been planned for a while and had not been started as a result of the recent problems in the sector. He added that this report had been approached differently from previous work. "It is the first time we have done a more in-depth look at the issue and for instance there was more consultation with the sector itself to ensure that what we were seeing was validated. That
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