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Unpublished Paper
The International Anti-Money Laundering and the Combating the Financing of Terrorism Regulation: A Critical Analysis of Compliance Determinants in International Law.
ExpressO (2010)
  • Navin Beekarry, University of Utah
Abstract
Concerns about risks of money laundering (ML) and terrorist financing (TF) to the stability of the international financial system have resurfaced in the context of the liquidity problems faced by financial institutions resulting from the recent credit crisis (2007). Because of their constantly evolving nature linked with new criminal activities and methodologies, ML and TF present threats of a systemic nature to the stability of the financial system. Addressing those changing faces of ML/TF and associated risks requires the design of a sufficiently flexible and adaptable international regulatory strategy. In this paper, I examine the international anti-money laundering and combating the financing of terrorism (AML/CFT) regime based on soft regulation and institutions, and how it has shaped countries’ compliance with the FATF’s AML/CFT international standards. The origins of the AML/CFT regime are located in the dual consequences of globalization, associated not only with rapid economic growth resulting from increasing financial and capital liberalization and negative externalities undermining the financial system, but also changing patterns in global governance with new, softer types, of international regulation and institutions, as alternative regimes to address issues of global concern. Compliance with the AML/CFT international standards is examined, based on the assumption that states’ behavior, or misbehavior, regarding their international obligations can be analyzed in terms of causality with different variables. Inspired by regime and managerial approaches, and relying on a mixed analytical-empirical methodology using selected variables, including the soft law nature of the AML/CFT regime and its normative structure, institutional design, monitoring process, sanctions mechanisms, and legitimacy, I argue that compliance is a function of specific determinants, of which the regime is made, acting on their own but more often with greater impulse arising out of their interaction.
Keywords
  • Compliance,
  • Inernational Law,
  • Money Laundering,
  • Financing of Terrorism,
  • International Regulation
Disciplines
Publication Date
April 26, 2010
Citation Information
Navin Beekarry. "The International Anti-Money Laundering and the Combating the Financing of Terrorism Regulation: A Critical Analysis of Compliance Determinants in International Law." ExpressO (2010)
Available at: http://works.bepress.com/navin_beekarry/1/