Non-Cash Transactions, Deferred Payment Fraud, and Anti-Money Laundering Compliance in Livestock Markets: A Criminological Perspective
DOI:
https://doi.org/10.63516/amss/03.01/005Keywords:
Anti-Money Laundering, Deferred Payment Fraud, Livestock Markets, Non-Cash Transactions, Criminological Perspective, Eid-Ul-Adha, Pakistan, Routine Activity TheoryAbstract
Purpose: This research aims to assess the correlation of non-cash transactions, deferred payment fraud, and anti-money laundering (AML) violations at livestock markets in Pakistan during the Eid-ul-Adha season. The study analyzes how criminals leverage the gap in regulations, informal payment systems, and social capital to conduct financial crimes at smallholder livestock farmers.
Methods: This research applies a qualitative criminological approach, and through market practices and the regulatory frameworks and sociocultural contexts that define/enable fraud, employs interpretive analysis. This research incorporates two theories of criminality, routine activity and differential association, to contextualize deferred payment fraud in the livestock trading system.
Conclusion: The findings show deferred payment fraud being systematically used by privileged buyers to obtain livestock at high prices and later transport the livestock to a different market. These buyers arbitrage the market’s instability caused by Eid-ul-Adha and transport the livestock to a new location to begin the fraudulent scheme again. The study identifies serious AML gaps caused by the cash-based and trust nature of most livestock transactions and facilitates layering and integration of dirty money into the legitimate economy.
Contribution: The study supports the registration of large livestock buyers and the implementation of enhanced due diligence for seasonal livestock traders, as well as urging regulatory reform to digitize livestock markets. The study also offers the integration of livestock markets within the national AML regulatory framework. It also has important implications for policy and practice.
Value: This research contributes to a small yet important body of literature focused on the intersection of money laundering and criminality at informal livestock markets. It also provides a much-needed context to the AML compliance discourse to fit in the realities of global agriculture and developing countries.
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