Money laundering in companies affects their image negatively. In many nations, there are strict anti-laundering laws which firms must abide. It affects different aspects of the organization including the stakeholders. Additionally, engaging in money laundering is unethical. Enterprises that become involved in such practices risk facing harsh fines as well as other punishments as dictated by the law. In some cases, the officials may intervene when money laundering occurs, but not in all situations. The Standard Chartered Singapore and Coutts & Co case is one instance of such a phenomenon that affects stakeholders, is unethical and may necessitate government intervention.
Money laundering in any company affects it negatively when such activities become uncovered. These practices influence the various stakeholders in the organizations. Some of them are customers, shareholders, employees, and suppliers. The thing is that the discovering of such activities in businesses could affect the image of the company negatively which influences its profits. In the long run, it could reduce the income a company generates.
Additionally, such practices affect the company’s image negatively; in particular it loses the trust of its stakeholders who may opt to pull out of the business. It changes the attitude of the customers who might feel that their money is no longer safe in the institution. Such clients may choose to make use of the services that more trustworthy agencies offer. When the income reduces, shareholders earn less on their shares. The business may be forced to lay off some workers to continue operating profitably. In this situation, their performance might also become worse because of the fear of losing the jobs and the massive scrutiny that can come as a part of the campaign to prevent money laundering activities in the future. Additionally, a number of stakeholders would not like to be associated with companies that have a negative image. Also the organization may be unable to pay the investors their dues as a result of the reduced profits. Businesses should consider the ethical implications of their actions. In this case, they have to pay hefty fines, lose the trust of their customers and investors as well as negatively affect their employees’ morale.
Engaging in money laundering activities is unethical and in some countries it is seen as a criminal offense. A lot of implications come about as a result of these events. Banks and other financial institutions have a mandate to put in place measures that promote transparency in their operations. To this extent, many such organizations have set anti-laundering policies that aim at promoting openness as well as closing loopholes. However, SCB failed to do this due to diligence in updating its customers’ processes. The deficiency came from controversial procedures, policies and oversight of its front office staff as well as the lack of awareness of money laundry among its workers.
Financial institutions have a moral obligation to ensure that the nature of their transactions is transparent. In the case of any suspicious deals, such organizations have a duty to report them to make sure that such a system does not facilitate money laundering activities. Though MAS did not find voluntary participation from SCB, the fact that they did not adequately announce the dubious transactions could amount to non-disclosure. Additionally, institutions are required to implement laws which ensure that they put in place measures to guarantee that fraudulent deals do not occur within their organizations. Breaching AML requirements on the part of both Standard charted bank and Coutts & Co could be seen as negligence. The institutions, therefore, did not disclose the suspicious transactions on time and were careless which led to the breaching of AML regulations.
Some money laundry incidences call for government intervention while others do not. Taking the case of Standard Chartered Bank, Singapore and Coutts & Co into account this might be essential. From the MAS investigations, there was no any voluntary participation in fraudulent activities by the employees or the pervasive control weakness. Additionally, the money laundry came from the fact that SBC workers were unaware of the risks of such a phenomenon in the institutions. These incidences made AML impose hefty fines on the corporations. Even though such steps aim at ensuring that other institutions do not engage in money laundering, government interventions are necessary in this case as the investigations did not show voluntary participation in these activities. Instead, employers should have a chance to educate their employees on the reality of money laundry risks within the organizations. All in all, they should be put under observation to ensure that they implement the required regulations and do away with the hefty fines.
In conclusion, money laundry affects companies negatively. The impacts concern stakeholders who include customers, investors, employees, and supplies among others. Money laundering affects the image of the company which makes clients lose their trust in the organization which in turn lowers the profits of the business. Investors receive less from their investment and may choose to withdraw from the firm. Money laundering practices have many ethical implications for a company. By failing to report the suspicious transactions on time, the two organizations could be seen as non-disclosure while their failure to strictly implement AML regulations could amount to negligence. From MAS investigation, they did not willfully engage in such kind of activities. Therefore, the government could intervene by lifting the fines and it places the firms under observation to ensure that employers train their employees in laundry risks.
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