Crackdown on Money Laundering: A Comparative Analysis of the Feasibility and Effectiveness of Domestic and Multilateral Policy Reforms

Lacey, Kathleen A., George, Barbara Crutchfield | January 1, 2003

This is a uniquely opportune time for anti-money laundering initiatives and policy reform to occur. Since the terrorist attacks in the United States in September, 2001, security agencies throughout the world have rushed to follow leads that may prove that Osama bin Laden financed the attack with massive amounts of laundered money. Greater awareness of the harmful effects of money laundering, and public and governmental concerns regarding reverse-money laundering by terrorists, has resulted in a surge of attention directed toward anti-money laundering efforts. Consequently, financial institutions are under increasing pressure to comply with existing anti-money laundering regulations by implementing internal anti-money laundering guidelines. Governments also are experiencing significant public pressure to enhance and expand the anti-money laundering legislative framework. To determine the future direction for effective anti-money laundering initiatives, it is important to first examine the multiple challenges faced by government and other organizations and institutions trying to eradicate money laundering. These challenges include, inter alia, private banks, correspondent banks, unregulated financial services, and various banking practices traditionally shrouded in secrecy. In order to assess these challenges it is necessary to evaluate the existing money laundering initiatives to determine if they sufficiently resolve the challenges relevant to the eradication of money laundering. The initiatives evaluated by the authors include those from the United States, European Union, Council of Europe (“COE”), the Organization for Economic Cooperation and Development (“OECD”), United Nations, the Organization of American States (“OAS”), Transparency International (“TI”), the Financial Action Task Force (“FATF”), and the Financial Stability Forum (“FSF”).