Money Laundering and Its Countermeasures in Ethiopia
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Date
2022-05
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Addis Ababa Unversity
Abstract
Despite the multi-faceted challenges posed by money laundering to Ethiopia’s
economy and security, money laundering and its countermeasures in the
country are under-researched and under-explored. Thus, this study is conducted
to examine how and why money laundering and its countermeasures operate in
Ethiopia. It was carried out using a qualitative case study. Both primary and
secondary data were collected, through in-depth interviews and document
reviews. This dissertation finds that (i) the notion of money laundering
incorporated in Ethiopia’s anti-money laundering regime does not grasp the
whole spectrum and purpose of money laundering, and does not reflect the
context in which the illicit business operates, (ii) the laundering strategies
employed by criminals are highly dynamic, symbiotic, indistinct, and tailored
to a country’s distinctive political economy, (iii) the political economy of
Ethiopia is providing an appealing environment to the rife of money laundering
and associated criminal activities, (iv) in countries like Ethiopia, foreign
currency governance has a significant contribution to the emergence of
financial crimes such as illicit financial flows, black market exchange, and
money laundering, and (v) unlike other organized criminal groups money
launderers primarily utilize the existing formal state structure, and exists as far
as the formal state structure exists. Furthermore, this study discovers that
although Ethiopia's anti-money laundering system (both normative frameworks
and institutional operation) is a verbatim copy of international anti-money
laundering standards, it is inadequate and ineffective. Finally, this study
contributes to the theoretical understanding of money laundering by (i)
explaining the role of political economy in the growth of money laundering,
and (ii) establishing a linkage between sources of illicit proceeds, laundering
strategies, risk factors, and anti-money laundering measures. This study also
contributes to the theoretical understanding of anti-money laundering measures
by examining the adequacy/sufficiency of domestic and international anti money laundering standards for the prevention and suppression of money
laundering in emerging and cash-intensive economies.
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Keywords
Ethiopia, money laundering, predicate offenses, laundering strategies, political economy, anti-money laundering measures