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Compliance with the AM+L4776L/CFT International Standard


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  • International Monetary Fund
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    This paper assesses countries'' compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) international standard during the period 2004 to 2011. We find that overall compliance is low; there is an adverse impact on financial transparency created by the cumulative effects of poor implementation of standards on customer identification; and the current measurements of compliance do not take into account an analysis of ML/FT risk, thereby undermining their credibility and the relevance of some of the policy recommendations taken on their basis. Moreover, we also examine the key role of some cultural, institutional, and financial factors in boosting countries'' compliance using econometric analysis.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 11/177.

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    Length: 75
    Date of creation: 01 Jul 2011
    Date of revision:
    Handle: RePEc:imf:imfwpa:11/177

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    Keywords: Money laundering; Banks; Combating the financing of terrorism; Reports on the Observance of Standards and Codes; international cooperation; terrorist financing; terrorist; terrorism; law enforcement; financing of terrorism; international standards; competent authorities; due diligence; legal assistance; financial regulation; law enforcement agencies; criminal activity; beneficial ownership; customer identification; suspicious transactions; mutual evaluation; secrecy laws; suspicious transaction; financial intelligence units; terrorist finance; beneficial owners; intelligence units; terrorist organizations; criminal liability; suspicious transaction report; administrative sanctions; shell banks; international law; international community; regulatory frameworks; legal frameworks; money laundering measures; combating money; combating money laundering; terrorism financing; internal controls; illegal activities; electronic money; narcotic drugs; wire transfer; due diligence measures; financial activity; business relations; foreign banks; professional firms; financial secrecy; money market instruments; extradition requests; insider trading; life insurance; transferable securities; internet casinos; illicit trafficking; precious stones; money launderers; customer identification policies; financial sector regulation; financial crime; regulatory cooperation; criminal sanctions; market manipulation; dual criminality; suspicious activity; terrorist acts; securities issues; criminal organizations; reporting obligations; information exchange; money orders; mutual evaluations; financial system abuse; currency changing; liquid securities; identification data; assessing compliance; supervisory bodies; counterfeiting currency; drug trafficking; insurance supervisors; enforcement powers; criminal behavior; money remitters; domestic legislation; terrorist activity; suspected money laundering; foreign counterpart; financial system integrity; supervisory authorities; unusual transactions; dirty money; illicit arms trafficking; negotiable instruments; share information; assessment methodology; law enforcement authorities; foreign counterparts; financial intermediary; account files; banking relationships; cash transactions; banking supervision; precious metals; legal arrangements; internal control procedures; enforcement authorities; terrorist finances; account opening; suspicious transaction reports; transaction reports; mutual evaluation reports; transaction records; regulatory authorities; non cooperative countries; international conventions; assessment missions; financial institution secrecy laws; legal entity; organized crime; transaction reporting; tax havens; compliance function; suspicious transaction reporting; payable through accounts; predicate crimes; international agreements; large cash transactions; domestic law; financial fraud; internal policies; anti money laundering; foreign branches; safe havens; judicial authority; financial intelligence unit; suspicious activities; legal assistance requests; criminal group;

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    1. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 35(2), pages 688-726, June.
    2. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, Cambridge University Press, vol. 42(03), pages 427-460, June.
    3. Sieglinde Gstöhl, 2007. "Governance through government networks: The G8 and international organizations," The Review of International Organizations, Springer, Springer, vol. 2(1), pages 1-37, March.
    4. Donato Masciandaro, 2005. "False and Reluctant Friends? National Money Laundering Regulation, International Compliance and Non-Cooperative Countries," European Journal of Law and Economics, Springer, Springer, vol. 20(1), pages 17-30, July.
    5. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, Elsevier, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934 Elsevier.
    6. Alessandro Gambini & Salim M. Darbar & Marco Arnone, 2007. "Banking Supervision," IMF Working Papers, International Monetary Fund 07/82, International Monetary Fund.
    7. Richard Podpiera, 2004. "Does Compliance with Basel Core Principles Bring Any Measurable Benefits?," IMF Working Papers, International Monetary Fund 04/204, International Monetary Fund.
    8. Simmons, Beth A., 2001. "The International Politics of Harmonization: The Case of Capital Market Regulation," International Organization, Cambridge University Press, Cambridge University Press, vol. 55(03), pages 589-620, June.
    9. Jos de Wit, 2007. "A risk-based approach to AML: A controversy between financial institutions and regulators," Journal of Financial Regulation and Compliance, Emerald Group Publishing, Emerald Group Publishing, vol. 15(2), pages 156-165, May.
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