National Interests: Priorities and Security
 

Improving pawnshop regulation methods in anti-money laundering and combating the financing of terrorism as an economic security mechanism

Vol. 14, Iss. 6, JUNE 2018

Received: 27 December 2017

Received in revised form: 15 January 2018

Accepted: 24 February 2018

Available online: 15 June 2018

Subject Heading: ECONOMIC SECURITY

JEL Classification: G02, G23, G28

Pages: 1034–1043

https://doi.org/10.24891/ni.14.6.1034

Dadalko V.A. Financial University under Government of Russian Federation, Moscow, Russian Federation
antikrizis1@bk.ru

ORCID id: not available

Surgutanova K.N. Main Investigations Directorate of Investigative Committee of Russian Federation for Moscow Oblast, Shchelkovo, Moscow Oblast, Russian Federation
kristisurgutanov@mail.ru

ORCID id: not available

Zubarev T.S. Federal Agency for State Property Management, Moscow, Russian Federation
timzubarev4@gmail.com

ORCID id: not available

Importance The article discusses the demand for new refined methods for pawnshop regulation.
Objectives The research attempts to show how the Central Bank of Russia should improve pawnshop regulation methods in terms of AML/CFT so as to more effectively perform internal control rules.
Methods We apply the legislative, regulatory and comprehensive approaches to examining whether pawnshops are effectively regulated. The research also relies upon general scientific and special methods, such as classification, comparison, generalization, dynamic analysis, moving average, analytic alignment of trends, and expert assessment for forecasting purposes.
Results The article overviews the main issues and solutions from perspectives of pawnshop regulation in AML/CFT on the part of the Central Bank of Russia. We analyze trends in the number of registered pawnshops and identify causes for tightening the AML/CFT regime. Based on the findings, we forecast how many pawnshops will have been registered by 2020. We conclude that the number of pawnshops will grow in the nearest future, hypothesize about an increased efficiency of the methods and propose a set of measures to regulate pawnshops in terms of AML/CFT.
Conclusions and Relevance There should be an effective and differentiating system for pawnshop regulation in the Russian Federation in terms of AML/CFT, since pawnshops are an integral part of the national financial system.

Keywords: pawnshop, non-credit financial institution, high-risk activity, internal control rules

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