eNewsHound

One of the components of the practice of regulatory compliance is variety.  Variety in the procedures and the policies that are required by law of companies and firms.  Companies involved in the financial sector must have these practices set in place in order to meet the regulatory and the legislative laws that have been designed to deter the misuse of the financial systems of the country.

These involve mainly cases of terrorist financing and money laundering scams.  One of the most detrimental aspects of these crimes is the damage done to an institution when they are connected in any way to such crimes, be it knowingly or un-knowingly.  Not only the reputation is at stake, but legal action will be taken.  Especially during these times, if one’s business is connect to a terrorist act, they will lose credibility and eventually will need to close their doors.  For even if one is innocent, just having their names attached to such crimes will have serious consequences in the public eye.

Terrorist acts evoke images of carnage and death, and this will damage an institution tremendously.  These companies require assistance in ensuring that they are provided with the knowledge necessary to properly identity those that may be terrorists and to then exclude them from their list of clients.  Money laundering is the key for those wishing to fund criminal acts.

Money laundering is a crime that sits in the middle of a multi-faceted crime, for it is either the product or the means for and of criminal acts.  Either someone is seeking to distance themselves from a crime already committed such as embezzlement or drug trafficking, or they are seeking to distance themselves from a crime that they are about to commit, such as funding terrorists.  When institutions follow regulatory compliance, to such procedures as the suspicious activity reports and “know your customer”, they are ensuring that not only will they themselves remain protected, but that the people of world will protected as well.

In developing countries, the fight against terrorist funding and money laundering is intense.  When corruption cases happen in countries that are on the verge of becoming more developed and financial stable, this threatens them on an international level.  Not only will foreign investors tend to stay away, day to day business is affected.  Foreign companies will no longer conduct transactions, and tourists will go elsewhere.  This can send a country into the depths of poverty.

Money laundering drastically throws off the stability of the economy, which will then serve to alter exchange and interest rates, not only in that country, but in the global financial world as well.  And while a country may be able to bounce back from cases of corruption in their financial institutions and corporations, political corruption is one form that is not so easy to resolve in the eyes of the world.

Unless a corrupt government is removed swiftly, a country will suffer endlessly.  Not only in the financial examples that are listed above, but the people of a tyrannical government become entrenched in poverty, as the government takes for themselves at the expense of the people are meant to govern and to protect.  There are many cases of political corruption happening the world today, included Tasmania and Somalia.  The people of these regions have been suffering for many years.

And while investigations are being conducted, the people of the country have lived through their apathy and are started to stand up for their human rights, and for the removal of their corrupt leaders and military officials.  Many organizations are helping in the struggles that are happening, by placing restrictions on the way that financial institutions look into the backgrounds and the histories of all those they are currently doing business with, as well as prospective new clients.  In this way, those corrupt leaders are finding it much more difficult to get funding for their actions of terrorism, and the means in which they have been able to launder those funds in the past.