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Anti-Money Laundering by International Institutions:A Preliminary Assessment

Author

Listed:
  • Marco Arnone

    () (Catholic University and CeMaFiR, Milan)

  • Pier Carlo Padoan

    () (Sapienza University of Rome)

Abstract

This paper presents the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) program introduced at end-2001 at the IMF and WB, in conjunction with the work of the FATF and other regional bodies. It briefly discusses why this can be seen as the birth of a “regime for financial integrity”. For the 20-country sample where detailed information - based on the detailed assessments - is available at end-2006 we find that some areas of the AML/CFT framework are consistently weaker than others in the area of prevention measures. Specifically, we have two findings: the first, positive one, points to a substantial adequacy of the repressive measures; the second, negative one, points to a substantial failure of countries to adopt adequate preventive measures, and calls for renewed efforts to improve implementation of preventive measures across the board, with specific regard to the activity of financial sector regulatory and supervisoryauthorities. Also, Eurozone countries outperform all other groups in the sample. Finally, the program shows some shortcomings; the limited availability of country information and the multiplicity of assessors and methodologies make it difficult to evaluate the performance of the program: available country assessments show highly variable quality and vary widely across countries owing to different assessor institutions. Therefore, we suggest greater transparency and availability of detailed countries’ information, and follow up assessments of the weak areas of a country’s AML/CFT framework at higher frequency than the established 5 years.

Suggested Citation

  • Marco Arnone & Pier Carlo Padoan, 2007. "Anti-Money Laundering by International Institutions:A Preliminary Assessment," Working Papers 74, Sapienza University of Rome, CIDEI.
  • Handle: RePEc:rsp:wpaper:wp74
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    References listed on IDEAS

    as
    1. Oana M Nedelescu & R. B. Johnston, 2005. "The Impact of Terrorism on Financial Markets," IMF Working Papers 05/60, International Monetary Fund.
    2. Alessandro Gambini & Salim M. Darbar & Marco Arnone, 2007. "Banking Supervision; Quality and Governance," IMF Working Papers 07/82, International Monetary Fund.
    3. Edwin M. Truman & Peter Reuter, 2004. "Chasing Dirty Money: The Fight Against Anti-Money Laundering," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 381.
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    Cited by:

    1. Marius Eugen Radu, 2016. "Perfect Tax Haven between Myth and Truth," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 8(1), pages 93-95, March.
    2. Raffaella Barone & Donato Masciandaro, 2011. "Organized crime, money laundering and legal economy: theory and simulations," European Journal of Law and Economics, Springer, vol. 32(1), pages 115-142, August.
    3. Arnoldo R. Camacho, 2013. "Modelling the Risk Profiles of Clients in the Fight Against Money Laundering and Terrorism Financing," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 12(2), pages 97-120, December.
    4. Hernando Bayona-Rodríguez & Catherine Rodríguez & J. Sebastián Melo, 2017. "Financial inclusion of the poor and money laundering indicators: empirical evidence for Colombia," DOCUMENTOS CEDE 015600, UNIVERSIDAD DE LOS ANDES-CEDE.

    More about this item

    Keywords

    European Economy; Terrorism;

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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