Since money laundering is most commonly associated with cross-border crime and crime of international, if not global, scale, many international organizations have been established to combat the practice, monitor compliance at the national level, and develop new rigorous measures for tightening the protection of financial safety and transparency globally. AML and FATF The Financial Action Task Force (FATF)
is the global organization overseeing the issues of international money laundering and terrorism. The task of this inter-governmental entity is to establish standards for the prevention of illegal activities and to oversee their practical integration at the legal, regulatory, and operational levels. To date, FATF includes 39 member states; it is headed by Marcus Pleyer (Germany), appointed in July 2020 after Xiangmin Liu left the post.
FATF monitors the rating of countries in terms of their compliance with AML and anti-terrorism measures. In case some states are found non-compliant, with grave regulatory violations of the AML standards, they are included in the FATF blacklist
, meaning that these countries are labeled as safe havens for terrorist funding and money laundering. Such a status poses a risk of financial restrictions and sanctions of international financial organizations in terms of money movement, transfer, etc. AML and UNODC
While the UN Office on Drugs and Crime (UNODC) is a universal organization with multiple responsibilities, its Law Enforcement, Organized Crime and Anti-Money-Laundering Unit is directly charged with overseeing the Global Programme against Money Laundering, Proceeds of Crime and the Financing of Terrorism. The unit was established in 1997, and since then, it has been actively engaged in the global struggle against money laundering. The primary duty of the unit is to support UN member states in the implementation of AML measures and detection, prosecution, and confiscation of illicit proceeds. Basel AML Index
The Basel AML Index calculated by the Basel Institute of Governance is one of the key AML terms in the global financial industry. It is a rigorous system of analysis of various countries' progress towards AML compliance and struggle with money laundering crime. The index for each country is calculated based on the following five parameters:
- quality of the implemented AML/CFT framework
- presence of bribery and corruption cases
- financial transparency and standards
- public transparency and accountability
- legal and political risks
In the Basel Index Report 2019
, the safest countries in terms of AML were Estonia with the index of 2.68, Finland (3.17), and New Zealand (3.18). Countries with the worst status of AML regulation were Mozambique (8.22), Laos (8.21), and Myanmar (7.93).