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(English) Global Surveillance of Dirty Money: Assessing Assessments of Regimes to Control Money-Laundering and Combat the Financing of Terrorism

By Terence C. Halliday, Michael Levi, and Peter Reuter


January 30, 2014  

On the verge of the 4th round of assessments by the FATF global system,   serious doubts are being raised about the effectiveness of regulations and potential adverse consequences of Anti Money Laundering (AML) and Counter Finance of Terrorism  (CFT) regimes. advocated by  the  FATF,  IMF, World Bank, and the G-7 and G-20.        

The Center on Law and Globalization and the American Bar Foundation  Study of the IMF’s AML/CFT ROSC Program for an assessment of  AML/CFT) – January 2014   and   The OECD´s 2013  report Measuring OECD Responses to Illicit Financial Flows from Developing Countries,  critically questioned  the effectiveness and transparency of AML/CFT norms and the potential economic harm these measures are  causing on developing countries, not to mention the astronomical economic costs and regulatory capacity for technical compliance with “global measures”.    Can these norms be considered effective and aligned with the broader objectives of AML and CFT  when some of the world´s largest  and most prominent banks have been caught in obscene acts of violations in developed countries, where they are supposed to be most effective?    

Serious doubts arise as to the capacity of the AML/CFT systems to regulate and influence the behavior of the largest financial institutions when  banks  have  been sanctioned in the U.S.,  U.K. and  in other financial services centers of the most developed economies.    The referred “transparency” measures and AML/CFT schemes advocated by the OCDE member countries are clearly ineffective in practice.  Evidence suggests that positive reviews or sanctions in the 3rd round of evaluations have been unable to prevent enormous banking scandals involving money laundering in advanced economies like Europe or the United States.   Although the scale of money laundering by prominent international banks seems systemic, no mention was made in neither the 3rd round evaluations nor the prosecution process in FATF nor FSRB member states.    

Debate regarding inconsistencies and double standards of OECD member countries, does not imply  that sanctions have had no impact, but do suggests that the regimes  in place have not had the expected results in those jurisdictions where it would be expected to work best.     Multiple evidence, reports and numerous independent studies suggest that serious rethinking and realignment is needed by the founding members of the FATF to come up with new alternative methods for accountability. 

(For the complete reports see ) 


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