Is money laundering the main funding source for cigarette smuggling in (non) European countries?
Abstract
Money laundering is the process of hiding or disguising the unlawful origin of property and hiding or disguising the true nature, origin, source, location, disposal, ownership or title of property. In other words, money laundering means “laundering” dirty money until it becomes clean. Corrupt officials and other criminals use money laundering techniques to hide the true nature of their income. Research shows that cigarette smuggling is linked to money laundering. The purpose of the article is to determine how money laundering is related to cigarette smuggling and which public authorities have a key role in combating these phenomena in Georgia and Serbia. Methods used in the study: literature analysis and focus group methodology. In addition, the EU member states were clustered into three categories by their HDI, CPI, GDP per capita and transaction reports indicators. Clustering indicated that the states attributed to the third cluster are most vulnerable to money laundering. An effective factor in the fight against smuggling is to increase the population’s intolerance to illicit goods and services, therefore, it will seek to extend the empirical study to the population’s perspective on money laundering and cigarette smuggling.
Keyword : money laundering, cigarette smuggling, focus group, Georgia, Serbia, clustering
How to Cite
Remeikienė, R., Gasparėnienė, L., Yorulmaz, Özlem, Gagytė, G., & Menet, G. (2022). Is money laundering the main funding source for cigarette smuggling in (non) European countries?. Business: Theory and Practice, 23(1), 198–207. https://doi.org/10.3846/btp.2022.14820
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Buchanan, B. (2004). Money laundering – a global obstacle. Research in International Business and Finance, 18(1), 115–127. https://doi.org/10.1016/j.ribaf.2004.02.001
El Idrissi, N. E. A., Zerrouk, I., Zerrari, N., & Monni, S. (2020). Comparative study between two innovative clusters in Morocco and Italy. Insights into Regional Development, 2(1), 400–417. https://doi.org/10.9770/IRD.2020.2.1(1)
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Financial Action Task Force. (2019). What is money laundering? https://www.fatf-gafi.org/faq/moneylaundering/
Global Organization of Parliamentarians. (2020). Against corruption. http://gopacnetwork.org/programs/antimoney-laundering/
Goel, R. K., & Saunoris, J. W. (2018). Cigarette smuggling: Using the shadow economy or creating its own? Journal of Economics and Finance, 43, 582–593. https://doi.org/10.1007/s12197-018-9454-x
Hopton, D. (2009). Money laundering. A concise guide for all business (2nd ed.). Routledge.
Yurekli, A., Beyer, J., de, & Merriman, D. (2001). Understand, measure, and combat tobacco smuggling (English). In World Bank economics of tobacco toolkit; No. 7. Smuggling. World Bank Group. http://documents.worldbank.org/curated/en/418961468163740317/Understand-measure-and-combat-tobacco-smuggling
Young, M. A. (2015). The dark figure of money laundering. Journal of Financial Crime, 22(4). https://doi.org/10.1108/JFC-07-2015-0035
Joossens, L., & Raw, M. (1998). Cigarette smuggling in Europe: Who really benefits? Tobacco Control, 7, 66–71. https://doi.org/10.1136/tc.7.1.66
Karlov, R. G. (2018). The impact of new methods of money laundering on the economy of the State. KnE Social Sciences, 3(2), 491–500. https://doi.org/10.18502/kss.v3i2.1581
Levchenko, V., Boyko, A., Bozhenko, V., & Mynenko, S. (2019). Money laundering risk in developing and transitive economies: Analysis of cyclic component of time series. Business: Theory and Practice, 20, 492–508. https://doi.org/10.3846/btp.2019.46
Leung, F. H., & Savithiri, R. (2009). Spotlight on focus groups. Can Fam Physician, 55(2), 218–219. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2642503/
Leuprecht, C. (2019). Taken to the cleaners: How Canada can start to fix its money laundering problem. True North in Canadian public policy. A Macdonald-Laurier Institute Publication. https://macdonaldlaurier.ca/files/pdf/Leuprecht__FinancialCrimes_FWeb.pdf
Little, M., Ross, H., Bakhturidze, G., & Kachkachishvili, I. (2018). Illicit tobacco trade in Georgia: Prevalence and perceptions. Tobacco Control, 29(4). https://doi.org/10.1136/tobaccocontrol-2018-054839
Melzer, S., & Martin, C. (2015). A brief overview of illicit trade in tobacco products. In Illicit trade: converging criminal networks. https://www.oecd-ilibrary.org/docserver/9789264251847-8-en.pdf?expires=1585865188&id=id&accname=guest&checksum=1B69821DFCDB81A3E958E65B85E75909
Morgan, D. L. (1988). Focus group as qualitative research. Sage Publications Inc.
Natarajan, M. (2019). International and transnational crime and justice (2nd ed.). Cambridge University Press. https://doi.org/10.1017/9781108597296
Nyumba, T. O., Wilson, K., Derrick, C. J., & Mukherjee, N. (2018). The use of focus group discussion methodology: Insights from two decades of application in conservation. Methods in Ecology and Evolution, 9(1), 20–32. https://doi.org/10.1111/2041-210X.12860
Ramos, A. (2009). Illegal trade in tobacco in MERCOSUR countries. Trends in Organized Crime, 12, 267. https://doi.org/10.1007/s12117-009-9078-9
Remeikienė, R., Gasparėnienė, L., Chadyšas, V., & Cepel, M. (2018). Identification of the shadow economy determinants for the Eurozone member states: Application of the MIMIC model. Journal of Business Economics and Management, 19(6), 777–796. https://doi.org/10.3846/jbem.2018.6276
Sarıgül, H. (2013). Money laundering and abuse of the financial system. International Journal of Business and Management Studies, 2(1), 287–301. https://www.researchgate.net/publication/256040462_Money_Laundering_and_Abuse_of_the_Financial_System
Shalutashvili, A., Ross, H., Watt, J., Hilborn, S., Bakhturidze, G., Kobeshavidze, G., & Grigalashvili, Z. (2007). Tobacco economic study in Georgia since the Fall of the Soviet Union. FCTC Implementation and Monitoring Center in Georgia. https://www.researchgate.net/publication/332231011_Tobacco_Economic_Study_in_Georgia_since_the_Fall_of_the_Soviet_Union
Shelley, L. (2009). Illicit trade: A security challenge – a case of cigarette smuggling. In International Tax and investment Center (ITIC) Anti-Illicit Tobacco Trade, Brussels Conference Paper, ITIC. Washington DC.
Schneider, F. (2016). Estimating the size of the shadow economies of highly developed countries: selected new results (CESifo DICE Report 4/2016 (December). https://www.ifo.de/DocDL/dice-report-2016-4-schneider-december.pdf
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The World Bank. (2020). Anticorruption fact sheet. https://www.worldbank.org/en/news/factsheet/2020/02/19/anticorruption-fact-sheet
Threlfall, D. K. (1999). Using focus groups as a consumer research tool. Journal of Marketing Practice: Applied Marketing Science, 5(4), 102–105. https://doi.org/10.1108/EUM0000000004560
United Nations Office on Drugs and Crime. (2019). Introduction to money-laundering. https://www.unodc.org/unodc/en/money-laundering/overview.html
United Nations Convention. (1998). Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention). https://www.unodc.org/pdf/convention_1988_en.pdf
Zubović, J., Djukic, M., Jovanović, O. (2020). Economic aspects of tobacco control and empirical findings in Serbia (pp. 189–191). Institute of Economic Sciences, Belgrade.
World Bank Group. (2019a). Confronting illicit tobacco trade. A global review of country experiences. http://documents.worldbank.org/curated/en/677451548260528135/pdf/133959-REPL-PUBLIC-6-2-2019-19-59-24-WBGTobaccoIllicitTradeFINALvweb.pdf
World Bank Group. (2019b). Serbia overview of tobacco use, tobacco control legislation, and taxation a country brief. https://openknowledge.worldbank.org/handle/10986/31951