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3 - Measuring Compliance in the Age of Governance: How the Governance Turn Has Impacted Compliance Measurement by the State
- from Part 1 - The Compliance Industry, the State, and Measurement Needs
- Edited by Melissa Rorie, University of Nevada, Las Vegas, Benjamin van Rooij
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- Book:
- Measuring Compliance
- Published online:
- 17 February 2022
- Print publication:
- 24 February 2022, pp 55-70
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Summary
Abstract: Since the 1980s, the governance of business behavior in Western societies has been characterized by a move away from state-centered hierarchical forms of governance to networks of governance which include a wide variety of public and private actors. This chapter illustrates how this so-called governance turn has impacted compliance measurement by the state. The chapter begins by outlining the characteristics of the turn to governance and the questions this raises for the measurement of compliance by the state. The chapter is subsequently organized around two key issues: 1) What is it that we measure when we measure compliance? and 2) The reliability, magnitude, and ownership of the data used. Drawing on examples of certification and the global anti-money laundering regime, each section discusses how the governance turn has made compliance measurement by regulatory authorities more challenging.
7 - Responding to Money Laundering across Europe: What We Know and What We Risk
- Edited by Nicholas Lord, University of Manchester, Éva Inzelt, Eötvös Loránd University, Budapest, Wim Huisman, Vrije Universiteit, Amsterdam, Rita Faria, Universidade do Porto
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- Book:
- European White-Collar Crime
- Published by:
- Bristol University Press
- Published online:
- 13 April 2023
- Print publication:
- 21 July 2021, pp 103-122
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Introduction
On 4 September 2018, the Netherlands Public Prosecution Service (NPPS) published a €775 million settlement with the Dutch bank ING Group NV, the largest financial services provider in the Netherlands, for serious and structural violations of the Money Laundering and Counter-Terrorist Financing (Prevention) Act (AML/CTF Act). The settlement, consisting of a fine of €675 million and a disgorgement of €100 million, is the largest ever agreed upon in the Netherlands.
The AML/CTF Act regulations require banks and other service providers to identify and prevent illicit financial flows by monitoring (potential) clients, and by signalling and reporting risks to the authorities. In other words, these service providers should act as gatekeepers to protect the integrity of the financial system; a role which ING had insufficiently fulfilled. As a result, criminals had been able to abuse ING accounts and launder large sums of money through Dutch accounts for several years.
Together with the settlement, the NPPS published an extensive statement of facts on the criminal investigation against ING (Netherlands Public Prosecution Service, 2018). The report presents a shocking picture of the bank's internal operations. Not only were client investigations not carried out properly, resulting in files being missing or incomplete, the internal risk monitoring system – which was specifically intended to pick up risks of money laundering – turned out to be capped at only three risks per day for some categories of risks (Netherlands Public Prosecution Service, 2018: 11). As a result, the bank had missed important signals of money laundering. According to the NPPS, these shortcomings were deeply rooted in the bank's corporate culture, in which cutbacks had come at the expense of compliance (Netherlands Public Prosecution Service, 2018: 17).
Around the time of the ING case, a similar case occurred in Belgium. In May 2018, the National Bank of Belgium imposed a fine of €300,000 on BNP Paribas Fortis, the largest bank in Belgium, for violations of anti-money laundering regulations (Bové and Broens, 2018). Here too, the bank failed to adequately monitor clients and transactions for many years. The former Libyan leader Muammar Gaddafi had an account with the bank which he used to transfer more than €80,000 for the purchase of more than 1,000 bulletproof vests (Bové and Broens, 2018).
Although similar in terms of the nature and extent of the violations involved, these cases triggered completely different responses.
4 - Corruption and Comparative Analyses across Europe: Developing New Research Traditions
- Edited by Nicholas Lord, University of Manchester, Éva Inzelt, Eötvös Loránd University, Budapest, Wim Huisman, Vrije Universiteit, Amsterdam, Rita Faria, Universidade do Porto
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- Book:
- European White-Collar Crime
- Published by:
- Bristol University Press
- Published online:
- 13 April 2023
- Print publication:
- 21 July 2021, pp 55-72
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Summary
Introduction
The significance of ‘corruption’ in Europe has arisen both through the work of established scientific studies and scholarship seeking to understand its nature, scope, extent and control, and as a priority of state and non-state organizations seeking to reshape anti-corruption policy and practice within individual nation-states and the European Union (EU) more generally. Corruption is variously defined in social science and policy, but the European Commission (EC), in line with the international anti-corruption agenda, defines the concept as ‘the abuse of power for private gain’ (European Commission, nd). The EC suggests corruption takes many forms, including bribery, trading in influence, abuse of functions alongside nepotism, conflicts of interest and revolving doors between the public and the private sectors. However, the EC is not in a position to impose a common legal definition on what (other than fraud against the EU) remains a national issue for each member and non-member state. Given the cultural and legal diversity across the European region, this chapter poses the question: how and what do we know about ‘corruption’, domestically and transnationally, across Europe? This question inevitably encourages thinking about theory, methodology and evidence in social scientific inquiry and more specifically the nature of the comparative method to gain insight into corruption at universal, idiographic and integrated levels. To inform this debate, we outline in brief what we see as the four main research traditions in criminological research in Europe (surveys, experiments and modelling studies; qualitative studies; national case studies; and analyses of specific cases of corruption) that have sought to empirically investigate, and contribute to knowledge on, corruption. Following an evaluation of what can be learnt, methodologically and substantively, we see a predominance of national and subnational level analyses which raise implications for what a European perspective on corruption looks like. For this reason, we then go on to argue for the need to cultivate theoretically driven comparative methods of research that can stimulate interactive dialogue, deliberation and argument across European countries, regions and localities with a view to establishing robust empirical and theoretical insights. This chapter explores ways of doing this, foregrounding the use of deliberative methods to better understand what is European about corruption in Europe, with focus on new concepts and tools of producing knowledge and theory cross-culturally.