Anti-Money Laundering

Anti-Money Laundering Measures

According to the International Monetary Fund, the aggregate amount of laundered money in the world ranges between 2 to 5 percent of the world’s gross domestic product (GDP), which approximately between 590 billion USD and 1.5 trillion USD. The amount of funds laundered show that countries need sophisticated anti-money laundering controls.

Fortunately, more and more countries are answering the call of combating money laundering. In 2001, the United States enhanced its international anti-money laundering training program. Other governments and international organizations like the European Union also broadened anti-money laundering measures and imposed anti-money laundering obligations on professionals (e.g. lawyers and accountants) – those who may be lending a hand in placing dirty money into the financial system.

USA Money Laundering Laws

The US also took the lead in amending and strengthening money laundering laws. Its Congress approved the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, which provided for a new and broader set of authorities for anti-money laundering regimes. The US Congress also enacted the anti money laundering act known as the Bank Secrecy Act, which prevents financial institutions to be used as intermediaries for criminal activity.

The international community has also responded to the call of controlling money laundering in the world, and the United Nations has taken the lead in creating the necessary legal anti money laundering framework. Recently, the UN adopted an anti money laundering program – the 2003 UN Convention against Corruption -- enclosing an agreement, shared among most signatories with the 2000 Convention, that each country will adopt and enforce laws to prevent money laundering, and to cooperate with other countries on the issue. The UN, through its Global Program against Money Laundering (GPML), has also provided assistance to different countries in the structuring of new legislation and improving existing legal frameworks against money laundering.

Anti-Money Laundering Bodies

Another international response came from the Basel Committee on Banking Supervision, advancing cooperation among central banks and other supervisory authorities in monitoring and controlling money laundering schemes.

Regional anti-money laundering bodies in Asia, Caribbean, and Europe are also showing their cooperation in the move against money laundering. And the major work against money laundering is provided by the Financial Action Task Force (FATF) in its 40 Recommendations that highlights the need for financial institutions to confirm customer identity; to keep records of their customers; report suspicious transactions to appropriate authorities; and develop system sustaining programs like training and internal control mechanisms.

Indeed, nations and international bodies are showing a great deal of efforts in combating money laundering. They have adopted different anti-money laundering laws. They have created bodies primarily responsible for countering money laundering. But these efforts are not enough unless they make sure that these counter measures are strictly implemented.

Anti-money laundering regulations

Tax Havens

Singapore