International Money Laundering and Terrorist Financing: -A Critical Overview

In the late 1980s an international anti money laundering (AML) offensive was initiated. Under direction of the Financial Action Task Force (FATF), international standards have been developed and adopted within many countries’ national policy frameworks. The terrorist attacks of September 11th 2001 gave rise to a policy u-turn in international anti money laundering (AML). Whereas collaboration before this incident centered on tracing criminal money after crime commitment, post-September 11th2001 collaboration took on a preventive risk-based. Money laundering has increased in scope and is believed to contribute to disruption of the financial system and uphold drug trade, trafficking of women and children for commercial sex, weapon smuggling, and terrorist financing. It is not only conducted by traditional criminals, but is often assisted by corrupt financial institution officials. The expansion of finance capitalism allowed for worldwide capital flows in a weakly regulated financial system. Financial havens and electronic payment technologies supporting anonymous customer relations have in turn offered opportunities to launder illicit proceeds without raising suspicion from public authorities. “The white collar crime of the 1990’s is here and it is money laundering.” Money laundering is not merely a white collar crime that robs a government of tax revenue. It is a hidden cancer that allows criminal activity to seeps through all sectors of legitimate business, making detection of, and enforcement against such activities extremely difficult. Thus, many countries, including the U.S., have put money laundering at the top of their law enforcement agendas.