Title: International standards in anti-money laundering and combating the terrorist financing regulation: compliance and strategy changes
Authors: Concepcion Verdugo
Addresses: Department of Law and International Economics, University of Barcelona, Avinguda Diagonal 690, Torre 2, 08034 Barcelona, Spain
Abstract: The Anti-Money Laundering and the Combating of the Financing of Terrorism (AML/CFT) regime constitutes one of the international standards regulating the behaviour of states and private sector actors. Using a quantitative methodology, this paper provides evidence that different jurisdictions| compliance with international AML/CFT recommendations is globally low. In general, the jurisdictions do not comply with the legal requirements that are the bases of these standards; there still remain loopholes maintaining secrecy laws that hinder international cooperation and some private actors have failed to implement preventive measures such as Customer Due Diligence (CDD). All of the above failures and weaknesses hamper the effectiveness of the AML/CFT regime against money launderers and terrorists. In view of these results, to overcome low compliance it is necessary that states engage market participants, such as financial institutions, nondesignated financial business professions and transgovernmental regulatory networks, to participate in the policy design of the AML/CFT strategy.
Keywords: money laundering; terrorist financing; financial regulation; compliance; AML/CFT effectiveness; international standards; anti-money laundering regulation; international cooperation; preventive measures; customer due diligence.
Global Business and Economics Review, 2008 Vol.10 No.3, pp.353 - 378
Published online: 20 Aug 2008 *Full-text access for editors Access for subscribers Purchase this article Comment on this article