Detecting the Fifty Shades of Grey: Local Crime, Suspicious Transaction Reporting and Anti-Money Laundering Regulation
22 Pages Posted: 15 Nov 2018 Last revised: 23 Mar 2020
Date Written: March 2020
This study investigates the efficiency of the suspicious transaction reporting (STR) activity to a Financial Intelligence Unit (FIU) as a means to deter money laundering (ML). Baseline and two-province theoretical models are used to frame the empirical analysis. The latter examines the relationship between STR and the vulnerability of Italian provinces to ML from 2009 to 2013. Instrumental variables and spatial analysis are exploited to identify the role of STR on vulnerability. The results provide a positive assessment of the risk-based mechanism of reporting suspicious operations to the FIU, although “congestion” problems from overreporting are observed.
Keywords: Money laundering; Suspicious transaction reporting; Vulnerability
JEL Classification: K14; K20; K42
Suggested Citation: Suggested Citation