Table of Contents

Research Handbook on International Financial Crime

Research Handbook on International Financial Crime

Research Handbooks in Financial Law series

Edited by Barry Rider

A significant proportion of serious crime is economically motivated. Almost all financial crimes will be either motivated by greed, or the desire to cover up misconduct. This Handbook addresses financial crimes such as fraud, corruption and money laundering, and highlights both the risks presented by these crimes, as well as their impact on the economy. The contributors cover the practical issues on the topic on a transnational level, both in terms of the crimes and the steps taken to control them. They place an emphasis on the prevention, disruption and control of financial crime. They discuss, in eight parts, the nature and characteristics of economic and financial crime, the enterprise of crime, business crime, the financial sector at risk, fraud, corruption, the proceeds of financial and economic crime, and enforcement and control.

Chapter 42: Anti-money laundering measures and the effectiveness question

Louis de Koker and Mark Turkington

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


Effectiveness is defined by the Financial Action Task Force (FATF) as ‘(t)he extent to which the defined outcomes are achieved’. Universal agreement on what those ‘defined outcomes’ were for the Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) system was absent in the past. During the drafting process of the 2013 Procedures for the 4th Round of Mutual Evaluations the FATF decided to define the outcomes and assess the extent to which countries achieve them. After long internal debate the FATF defined the overall outcome of its measures against money laundering as well as terrorist financing as follows for purposes of its mutual assessment methodology: ‘Financial systems and the broader economy are protected from the threats of money laundering and the financing of terrorism and proliferation, thereby strengthening financial sector integrity and contributing to safety and security.’ This chapter focuses on the effectiveness question relating to AML/CFT measures. It considers the evolution of the effectiveness question from a focus on the FATF itself to a focus on the impact of the implementation of its standards on crime and on the crime risk profiles of countries. The chapter considers some tensions between the defined outcome and the FATF Recommendations and closes with observations regarding questions that are absent from the current focus. The 1980s saw increasing concern over the global drug problem, the extent of criminal internationalisation, and a ‘heightened sensitivity’ to the growing financial power of organised crime syndicates.

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