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THE RISING THREAT OF FINANCIAL CRIMES: CHALLENGES AND
COUNTERMEASURES
Akramova Muazzam Turdikul kizi
Teacher of International school of
Finance and Technology Institute
Phone: +998970117618
akramovam@isft.uz
https://doi.org/10.5281/zenodo.15515209
Abstract
Financial crimes pose a significant threat to global economies, financial
institutions, and individuals. These crimes include money laundering, fraud,
insider trading, cyber financial crimes, and corruption. This paper examines the
causes, impact, and prevention mechanisms of financial crimes through a
systematic review of recent studies. The findings indicate that financial crimes
are evolving with advancements in technology, making detection and prevention
increasingly challenging. Governments and financial institutions are
implementing stringent regulations, advanced analytics, and artificial
intelligence to combat these crimes. This paper highlights the need for a
collaborative approach involving law enforcement, regulatory agencies, and
private entities to mitigate financial crimes effectively.
Keywords:
Financial crimes, money laundering, fraud, insider trading,
cyber financial crimes, corruption, regulatory measures.
Financial crimes have been a persistent issue in global markets, affecting
economic stability and public trust. These crimes range from traditional fraud
and embezzlement to sophisticated cyber-enabled financial crimes. Financial
institutions and regulatory bodies face an ongoing battle to identify and prevent
such activities. The purpose of this study is to analyze financial crimes, their
impact, and the countermeasures employed to mitigate risks. This research
employs a systematic review of academic literature, regulatory reports, and case
studies on financial crimes. Data was collected from peer-reviewed journals,
reports from international financial institutions such as the Financial Action
Task Force (FATF), and real-world case studies of financial crimes. The study
also evaluates the effectiveness of existing countermeasures in mitigating
financial crimes. According to Article 10 of Iraq's Companies Law and Article 8 of
Kuwait's Companies Law, if a participant's name is included in the company
name without their consent for the purpose of creating a guarantee and gaining
others' trust, this act is considered a violation of the law and entails criminal
penalties. A person whose name has been included in the company name
SOLUTION OF SOCIAL PROBLEMS IN
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without their consent has the right, under general principles, to claim
compensation for the damage caused to them. [1]
Nowadays, financial fraud on the global Internet is rapidly gaining
momentum. According to Article 159 of the Criminal Code of the Russian
Federation, fraud is defined as "the misappropriation of another's property or
the acquisition of rights to another's property through deception or abuse of
trust".
Today, humanity is at a very high stage of development. New gadgets with
Internet access are constantly being introduced into human life, making modern
life seem inconvenient and slow without them. For this reason, fraudulent
organizations actively infiltrate the Internet, firmly establish themselves, and
engage in the theft of financial assets.
Internet fraud is a relatively new phenomenon but has already developed
significantly. It has distinctive features that set it apart from other types of
crimes:
A high degree of latency;
A variety of methods for committing crimes;
A transnational, global nature of activity;
Difficulties and specific features in criminal procedural proceedings,
especially at the pre-trial stage, including challenges related to evidence
collection [2, pp. 45-46 / p. 128]. [2]
Types of Financial Crimes
Financial crimes manifest in various forms, including:
Money laundering
: Concealing illicit funds through legitimate financial
channels.
Fraud
: Deceptive practices like Ponzi schemes, identity theft, and credit
card fraud.
Insider trading
: Illegal trading of securities based on non-public
information.
Cyber financial crimes
: Hacking, phishing, and ransomware targeting
financial institutions.
Corruption and bribery
: Manipulation of financial systems through
unethical means.
Financial crimes have devastating consequences on economies and
businesses, including:
Economic instability due to loss of investor confidence.
Reputational damage to financial institutions.
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Loss of billions of dollars annually in fraudulent activities.
Increased regulatory costs and legal penalties for non-compliance.
Governments and financial institutions employ various strategies to
counter financial crimes, such as:
Regulatory frameworks
: Implementing anti-money laundering (AML)
and Know Your Customer (KYC) regulations.
Technology-driven solutions
: AI-driven fraud detection, blockchain for
secure transactions, and cybersecurity enhancements.
International collaboration
: Information sharing between financial
institutions and law enforcement agencies. Despite these measures, criminals
continually develop sophisticated methods to evade detection, necessitating
continuous adaptation of prevention mechanisms.
The study underscores the dynamic nature of financial crimes, particularly
with the rise of digital financial systems. While technological advancements have
strengthened security measures, they have also introduced new vulnerabilities.
The effectiveness of countermeasures relies on a proactive approach, integrating
advanced analytics, AI, and international regulatory cooperation. Additionally,
increasing financial literacy among the public can serve as a deterrent to fraud
and other financial crimes.
Conclusion
Financial crimes continue to pose significant risks to global economies, but
regulatory advancements and technological innovations offer promising
countermeasures. A multi-stakeholder approach involving financial institutions,
regulatory agencies, and technology firms is crucial in mitigating financial
crimes. Future research should focus on enhancing predictive analytics and
regulatory compliance measures to strengthen financial security.
References:
1.
H.Rahmonkulov, S.Gulyamov. Corporate law. 2008. TSUL
2.
Xorozova A. Financial fraud. "Economy and Society" No. 6(37) 2017
www.iupr.ru P. 540
3.
Alldridge, P. (2017). "Money Laundering Law and Regulation: A Practical
Guide." Oxford University Press.
4.
Levi, M., & Reuter, P. (2006). "Money Laundering." Crime and Justice,
34(1), 289-375.
5.
Financial Action Task Force (FATF). (2021). "Money Laundering and
Terrorist Financing Risk Assessment."
6.
Shover, N., & Hochstetler, A. (2006). "Choosing White-Collar Crime."
Cambridge University Press.
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International scientific-online conference
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7.
Zimring, F. E. (2007). "The Great American Crime Decline." Oxford
University Press.
