{"id":4921,"date":"2006-08-01T11:52:55","date_gmt":"2006-08-01T15:52:55","guid":{"rendered":"https:\/\/biznews.fiu.edu\/?p=4921"},"modified":"2021-06-03T12:47:31","modified_gmt":"2021-06-03T16:47:31","slug":"college-finance-professor-helps-banks-track-terrorist-financing","status":"publish","type":"post","link":"https:\/\/biznews.fiu.edu\/2006\/08\/college-finance-professor-helps-banks-track-terrorist-financing\/","title":{"rendered":"College finance professor helps banks track terrorist financing."},"content":{"rendered":"

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The words of Carl Bernstein and Bob Woodward\u2019s secret source Deep Throat to \u201cfollow the money\u201d in their Watergate investigation resonate today with multiple law enforcement agencies as they try to uncover money-laundering schemes and terrorist financing.<\/p>\n\n\n\n
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\nJohn Zdanowicz<\/span><\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

For sixteen years, John Zdanowicz<\/strong>, professor, Department of Finance, in the college, has worked with data the federal government uses to calculate the balance of trade. He\u2019s been taking that data, which the government releases every month, and analyzing each transaction to measure the amount of money moving in and out of the country, noting anomalies.<\/p>\n

Now, he has applied that information to help banks comply with new federal regulations that require them to monitor the price of internationally-traded items they\u2019re financing\u2014one of the government\u2019s many efforts to curb money laundering and terrorist financing.<\/p>\n

\u201cHaving banks support both ends of international transactions facilitates trade, but it imposes new burdens on those banks now that they have to monitor the pricing,\u201d said Zdanowicz, who was a principal investigator on a $2 million research grant awarded to Florida International University by the U.S. Treasury Department to study transfer pricing and money-laundering issues. \u201cAccording to the regulations, a bank has to review documents and check on market prices based on \u2018general knowledge.\u2019\u201d<\/p>\n

International Price Profiling System streamlines process.<\/em><\/p>\n

Considering that there are more than six million possible combinations of products and countries\u2014all with different pricing structures\u2014the complexity is overwhelming and the notion of \u201cgeneral knowledge,\u201d highly unreasonable. However, Zdanowicz has developed a tool\u2014called the International Price Profiling System\u2014that makes the task easy.<\/p>\n

\u201cThe software includes more than 26,000 commodity code numbers in rows and 232 countries in columns, resulting in more than 6.2 million combinations,\u201d he said. \u201cThe bank can enter the product, country, and price and the system will evaluate the price and calculate a \u2018risk index.\u2019\u201d<\/p>\n

\u201cAs regulators ask more questions, banks are in a predicament because they will know some products well, but certainly not all of them,\u201d said Pat Roth<\/strong>, executive director of the Florida International Bankers Association (FIBA), Inc. \u201cThe software provides a quick, cost-effective way to check on those that are unfamiliar.\u201d<\/p>\n

FIBA recently sponsored a presentation by Zdanowicz titled, \u201cTrade\u2013Based Money Laundering and Terrorist Financing: Verifying Product Prices in International Trade Transactions.\u201d The event drew more than 100 people to the FIBA meeting in Coral Gables, with an additional twenty-five individuals from across North America joining online.<\/p>\n

\u201cIt was valuable for the audience to learn about this solution,\u201d Roth said. \u201cIt is also a recognition of the work that Zdanowicz has done in cooperation with government agencies. It shows that Florida is a partner in the fight against money laundering and terrorist financing. The software is timely, practical, and useful.\u201d<\/p>\n

Zdanowicz also made the presentation recently on his research and demonstrated the software at American Express\u2019 headquarters in New York, overlooking Ground Zero, to about 400 people\u2014mostly regulators and law enforcement people.<\/p>\n

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\u201cGovernment agencies, the IRS, drug enforcement, and customs professionals are all trying to stop illegal transactions, which move money for the perpetrators through trade,\u201d he said. \u201cAnd the concern goes beyond borders, since foreign governments are worried about capital flight and money laundering, as are entities such as the World Bank, International Monetary Fund, and the United Nations, which are concerned about money designated for foreign development that is squandered or moved out of the country.\u201d<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

The words of Carl Bernstein and Bob Woodward\u2019s secret source Deep Throat to \u201cfollow the money\u201d in their Watergate investigation resonate today with multiple law enforcement agencies as they try to uncover money-laundering schemes and terrorist financing. John Zdanowicz For sixteen years, John Zdanowicz, professor, Department of Finance, in the college, has worked with data […]<\/p>\n","protected":false},"author":71,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[4],"tags":[619,863,924,4307,1336,2083,4306],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts\/4921"}],"collection":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/users\/71"}],"replies":[{"embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/comments?post=4921"}],"version-history":[{"count":1,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts\/4921\/revisions"}],"predecessor-version":[{"id":24401,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts\/4921\/revisions\/24401"}],"wp:attachment":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/media?parent=4921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/categories?post=4921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/tags?post=4921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}