Is there a commendable regime for combatting money laundering in international business transactions?

Purpose - Money laundering and grand business corruption continue to plague the global economy, accounting for 2%-5% of the global gross domestic product. Illicit funds, produced through grand corruption, are laundered using complex layering schemes that cloak them in legitimacy by concealing their origins. Lamentably, weak anti-money laundering (AML) frameworks promote economic instability, unjust commercial advantages and organized crimes. This study aims to highlight the need for comprehensive anti-corruption and AML frameworks by critiquing the exploitable gaps in the global AML regime created by heterogeneous state-level AML regimes to date. Design/methodology/approach - This study welcomes the United Nations Convention against Corruption (UNCAC) and the financial action task force (FATF) recommendations but underscores the limitations of their effectiveness by investigating state-level enforcement mechanisms to determine these instruments’ true impact or lack thereof. The mutual evaluation reports (MERs) and state-level AML regimes in the UK, the USA and Canada are analyzed to illustrate the distinct implementation of international soft law in domestic legislation. Findings - This study finds that UNCAC and the FATF recommendations are pivotal steps towards the establishment of a global AML regime for international business, albeit, one that remains imperfect because of the inconsistency of state-level AML frameworks. Consequently, international cooperation is needed to navigate and improve the discrepancies in varied AML legislation. Originality/value - The author provides an in-depth and balanced analysis of current state-level AML developments and relies upon the recent 2016-2018 MERs to indicate the successes and flaws of various AML legislation. Therefore, this critique may guide stakeholders to construct robust AML frameworks and contributes to academic research in AML.