Despite the measures taken by governments and concerned institutions in combating money laundering operations, they are not always successful due to manipulations by individuals and institutions responsible for enforcing compliance.
It is known that money laundering operations aim to legitimize the illegal financial returns that institutions, companies and individuals achieve annually as a result of various financial crimes. These institutions and individuals work to siphon away revenues and funds, which are sometimes kept in the form of deposits in some banks and financial institutions. Later, these are laundered through economic, commercial, real estate transactions by concealing their illegal sources.
The Financial Action Task Force (FATF) follows up on money laundering issues by engaging with global central banks to fight the concealment of ill-gotten wealth. This wealth is used to procure arms illegally, fund terrorism, traffic in human beings, drug sales, prostitution, kidnappings, financial embezzlement, corruption, thefts, and other illegal acts.
With the aim of strengthening work in combating money laundering methods and protecting institutions at the level of Arab countries, some local institutions, including the International Arab Society of Certified Accountants and Talal Abu-Ghazaleh Global, have issued useful manuals and guides. They advise accountants in particular to comply with laws and legislation in combating money laundering and terrorist financing, and to report any suspicious transitions.
The value of money laundering operations is increasing annually despite the measures. At the same time, there are no accurate statistics on the amounts circulating in local economies resulting from laundering operations worldwide. For 2021, the United Nations Office on Drugs and Crime has estimated that such funds range from 2 to 5% of the global GDP, which is about $800 billion.
Accountants must play an important role in flagging suspect transactions and reporting to the concerned authorities. They have a duty to identify launderers and audit illegal funds. Not doing so deliberately or otherwise amounts to complicity in money laundering. The guides in question provide advice on steps that accountants must take in exposing illegal transactions. Money laundering operations will continue if accountants fail in their required work and conceal information that must be communicated to the concerned authorities.
Oman Observer is now on the WhatsApp channel. Click here
