International anti‐money laundering programs

TLDR

The shift from rule‑based to risk‑based AML regulation reflects growing recognition of its economic dimensions, yet key criminal issues remain inadequately addressed. The paper empirically assesses international AML programs and outlines criminal regulation issues. The authors analyze transnational laundering threats and the multidisciplinary AML framework, evaluating the IMF‑World Bank program. The analysis shows that money laundering is primarily an economic problem, requiring legal responses that deter crime while managing costs and privacy, and that recent non‑criminal measures by inter‑governmental bodies align with these economic insights.

Abstract

Purpose The purpose of this paper is to present an empirical assessment and outline issues in criminal regulation relating to international anti‐money laundering (AML) programs. Design/methodology/approach In the first part, this paper outlines the serious threats posed by transnational laundering operations in the context of economic globalization, and calls for highly co‐ordinated international responses to such a crime. The second part of the paper centres on elements of international criminal regulation of ML. Findings The focus is on the phenomenological aspect of ML and highlights that to a large extent it is an economic issue. Economic analysis calls for an accurate legal response, with typical trade‐offs: it should deter criminals from laundering by increasing the costs for such illicit operations, calling for enhanced regulatory and enforcement activities; however, stronger enforcement yields increased costs and reduces privacy. These features have lately inspired the recent paradigm shift from a rule‐based regulatory framework to a risk‐based approach which still represents an extremely delicate regulatory. Both at the international level and within the single domestic legal system, AML law is typically characterised by a multidisciplinary approach combining the repressive profile with preventive mechanisms: an empirical evaluation of the International Monetary Fund‐World Bank AML program is presented, where these two aspects are assessed. The non‐criminal measures recently implemented under the auspices of the main inter‐governmental public organisations with competence in these fields seem to be consistent with the insights of economic analysis. However, some key criminal issues need to be better addressed. Originality/value The paper offers insights into international AML programs, focusing on criminal regulation.