The effect of corruption factor in harnessing global anti-money laundering regimes

摘要

Purpose – The purpose of this paper is to examine the effect of corruption on the transposition of global anti-money laundering regimes (AML), such as customer due diligence (CDD) locally. Design/methodology/approach – The global AML framework for purposes of this paper is underscored by the 40+9 recommendations of the Financial Action Task Force (FATF) and the principles of the Basle Committee on Banking Supervision. These standards are contained in FATF recommendations 2003; and the FATF nine special recommendations against Financing of Terrorism 2001 (updated in February 2008). The paper examines some aspects of the current anti-money laundering and combating financing of terrorism (AML/CFT) framework such as CDD and know your customer to highlight the challenges of harnessing the global AML/CFT regimes locally in some jurisdictions. Findings – The paper establishes that money laundering (ML) and corruption are embedded in each other. By way of examples, cases of ML are rampant in highly corrupt countries. Research limitations/implications – The dichotomy of corruption and its effect negates the global efforts on fighting ML/financing of terrorism. Social implications – Corruption in its various manifestations undermines a country's capacity to harness the global framework against ML and financing of terrorism. Thus, the twin offences of corruption and ML should be accorded the same level of attention as serious financial crimes at a global level. Originality/value – The paper is written based on the challenges of harnessing the global AML/CFT regimes in inherently corrupt governments. It draws particularly on experiences of corruption and ML in some countries in Africa.