UNAS RECOMENDACIONES GENERALES

The UN 1373 Resolution is a binding document that requires all member states to immediately freeze funds, economic resources or assets of persons who carry out, attempt to carry out, facilitate, control or participate in terrorist deeds (Leong, 2007). Currently, the Malaysian FIU, Unit Perisikan Kewangan, and Bank Negara Malaysia (UPWBNM) has authority to identify and subsequently freeze funds and assets attributed to terrorism (Shanmugam & Thanasegaran, 2008). Similarly in Zimbabwe, the FIU director has special powers to freeze accounts that are suspected of money laundering (Gubbay, 2007). Such authority is also evident in the Philippines where the Anti-Money Laundering Council (AMLC) can pass a motion to freeze property for a period of up to 20 days after pursuing civil forfeiture on cases that evidence unlawful activities (Simser, 2006).

Supported by Security Act of 2001, CTF policies in the UK also allow for forfeiture and seizure of suspect’s financial assets. These policies have been strengthened more recently with the 2008 Counter Terrorism Act, which empowers the treasury to freeze assets and prevent financial support to specific persons or organisations that evidence

terrorism finance. Investigations carried by SOCA resulted in the freezing of 237 accounts suspected of financing terrorism (Sproat, 2010). In addition, Demetis and Angell (2006) estimate confiscations in the UK to be in the vicinity of around £46 million of criminally obtained assets. In Germany, a special analysis framework known as SPITAL, was established to investigate money laundering, corruption and misappropriation of funds by high-ranking government officials. Results published demonstrated that large numbers of suspicious accounts were evident leading to over €1.72 million being frozen in Germany and three other European countries (FIU Germany, 2004).

Similarly, assets investigated in Switzerland are quite substantial with STRs totalling 8.741 billion Swiss Francs. Though some of these funds were frozen, it is unclear exactly how much. STRs contributed to significant investigations pertaining to key personalities, such as Sani Abacha, the deceased Nigerian Dictator, Vladimir Montesinos, the former chief of Peruvian Intelligence and the former Prime Minister of Ukraine, Pavlo Lazarenko. In the cases of Sani Abacha and Montesinos, the Swiss authorities repatriated millions of dollars back to their respective countries (Chaikin, 2009). In Belgium, 8,032 STRs led to 939 convictions leading to prison sentences and asset seizures (Verhage, 2009a). Contradictory to this approach of freezing accounts, Magnusson (2009) indicates that Swedish bank regulations have large deficiencies that do not permit banks to freeze money related to suspicious transactions. In addition, independent companies in Sweden that handle currency and cash exchanges continue to remain anonymous to the FIU.

2.12. Chapter summary

This chapter examined existing literature to define and illustrate the FIUs functions. The background and implications of money laundering were considered prior to discussing terrorism finance and the characteristics that link these criminal activities. The international standards attributed to combating money laundering and terrorism finance were described to provide context. FATF recommendations were then introduced to explore the process and demonstrate the types of FIUs that exist. The focus then shifted to discussing the core functions of FIUs, where evidence from different nations was presented to elaborate FIU roles in receiving STRs from financial, non-financial and fictitious institutions; analysing reports and disseminating

STRs locally and internationally. Other functions, such as the FIU’s role in acting as a regulatory body, maintaining confidentiality, training staff and freezing accounts were also examined. In the next chapter (Chapter 3: Methodology) the questions, design of study and scope are illustrated. The chapter also details the data collection methodology and presents the strategies that will be utilised for analysing the data.

CHAPTER 3: METHODOLOGY

3.1. Introduction

This chapter presents the methodological approaches used in this study. These areas are highlighted through the study’s focus in analysing whether SAFIU complies to the International Standards set. The following sections provide an explanation and justification of the chosen research design. Demographic information of the respondents is then provided prior to presenting the data collection method of constructing, validating and translating the research instrument. An outline of the pilot study and the analytical procedures utilised during testing are also detailed.

3.2. Research design

The research design employed in this study is survey-based in the form of questionnaires. The survey method was deemed as the most appropriate research design for this thesis as the researcher was able to collect quantitative data needed to identify the effectiveness of SAFIU. Though the study predominantly employed quantitative methodology, a number of open-ended questions were also provided to accommodate information that is difficult to quantify, such as reasons, opinions and comments. This type of information was left unaltered in order to maintain its value (Johnson & Christensen, 2007).

Quantitative research was employed in order to categorise the answers from the respondents to the survey questionnaire, and also to analyse the results through a statistical approach. On the other hand, the qualitative research was accommodated to assess the non-quantifiable answers of the respondents in terms of their experiences and opinions regarding the subject matter. In addition, the use of related references and primary documents was also considered in this study as a qualitative type of research. Qualitative information, especially those based on the personal experiences, can provide a greater insight and in turn present a more in-depth understanding of the subject at hand. This methodology is thought to be the most appropriate for this research because it diversifies all the aspects of the data collection and assists in gaining a more thorough understanding of the subject matter (Johnson & Christensen, 2007).

3.3. Ethics approval

The research instruments were approved by the Victoria University Human Research Ethics Committee (VUHREC) under the reference number HRETH 10/233 on 2 December 2010. The instruments of this study were approved to meet ethical standards that ensure information provided will be maintained and handled in a confidential manner. In addition, personal information collected from the population will be protected and treated with similar confidential rigour.

3.4. Population

The population in this study played an important role in the methodology of this research. The researcher used the method of convenience sampling as the target population included specialist civilian and uniformed personnel from SAFIU who have dealt with various cases of money laundering and terrorism financing. Convenience sampling was utilised because there is only one FIU in the KSA, and as such this method was deemed to be useful when a researcher is inclined to describe a specialist group in a particular way (Henry, 1990).

Although there is no clear-cut answer to the correct size for any given research, Cohen et al. (2000) note that 30 is considered the minimum number of cases if researchers plan to use some form of statistical analysis on their data. In this research, the entire population of 111 employees was chosen, as there is only one SAFIU for the whole of Saudi Arabia. Utilising the entire population meant that the results obtained were more reliable. Table 4 provides the summary of the respondents that was utilised in the research. For a complete table of the demographics, refer to Table 7.

Table 4: Demographic Characteristics of Respondents

Description Respondents

Number of Respondents 74 (66.67% of the entire population)

Type Officer or Civilian

Age 20-60

Qualification High school–Master

Courses Attended 0-4

Work Experience 0-20

3.5. Data collection

In this study, semi-structured questionnaires were given to SAFIU staff members. The survey questionnaires were semi-structured, composing predominantly closed ended questions and a few open-ended questions. The questionnaire enabled the researcher to collect quantitative data from a large number of participants simultaneously, thus providing the researcher with an effective tool for data collection (Wellington, 2000). The researcher chose to collect data using questionnaires based on the following reasons:

 The unavailability of publicly available data that analyses the effectiveness of SAFIU

 Obtaining confidential or closed information was difficult due to the nature, content and security clearance required to access information within the organisation.

In addition, the collection of data via questionnaires was the most cost efficient technique, as interviewing each employee within the organisation would adversely affect their day-to-day responsibilities. Further, the researcher wanted to capture the opinions of employees and using other methods based on aggregate data would limit the opportunity to analyse information unique to each individual.