Detecting the Fifty Shades of Grey: Local Crime, Suspicious Transaction Reporting and Anti-Money Laundering Regulation
37 Pages Posted: 15 Nov 2018
Date Written: November 2018
This paper investigates the efficiency of the suspicious transaction reporting (STR) activity to the Financial Intelligence Unit (FIU) as a means to deter money laundering. A baseline theoretical model is used as a framework to guide the empirical analysis of the relationship between STR and the vulnerability of Italian provinces to money laundering in the 2008-2013 period. Instrumental variables are used to limit the problems stemming from the endogenous nature of the number of reports to the FIU with respect to vulnerability. Results provide a positive assessment of the risk-based mechanism of reporting suspicious operations to the FIU.
Keywords: Money laundering; Suspicious transaction reporting; Vulnerability
JEL Classification: K14; K20; K42
Suggested Citation: Suggested Citation