The Economic and Legal Effectiveness of the European Union’s Anti-Money Laundering Policy

The Economic and Legal Effectiveness of the European Union’s Anti-Money Laundering Policy

Brigitte Unger, Joras Ferwerda, Melissa van den Broek and Ioana Deleanu

Official government policies against money laundering in the EU have been in place for roughly 25 years, after much concerted effort and a great deal of time and money invested. This volume examines the anti-money laundering policy of the EU Member States in connection to the threat of money laundering they face.

Chapter 12: Cost-benefit analysis

Joras Ferwerda

Subjects: economics and finance, economic crime and corruption, financial economics and regulation, money and banking, law - academic, corruption and economic crime, european law, finance and banking law


The lack of hard data makes any country-by-country cost-benefit analysis of AML policy impossible at the moment. But by using the estimates that are available, and correcting these estimates for the price level and size of the countries, the chapter is able to estimate almost all cost components and some benefits for each EU Member State. This study estimates that the total costs of the 27 EU Member States are about 2 billion Euros, together with an immeasurable reduction in privacy and some inefficiency in the operation of society. Since most of the benefits of AML/CTF policy are hard or impossible to estimate, the cost benefit dilemma is basically reduced to the question: Does the EU want to spent about 2 billion Euros to obtain potential benefits, which include an unquantifiable reduction in money laundering, less crime in general, a reduced damage effect on the real economy and less risk for the financial sector?

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