International Anti-Money Laundering Instruments

Abstract

Money laundering refers to the process or processes through which the proceeds of certain crimes are first disguised and then legitimized so that they may be enjoyed without risking discovery and prosecution. While anti-money laundering efforts were initially implemented through domestic legislation, it soon became evident that the effectiveness of the system would heavily depend on how homogenously it was applied accross borders. In fact, empirical evidence shows that money laundering operations typically include an international dimension of one sort or another. Should the anti-money laundering legal regime be limited to some countries or not enforced homogenously, those seeking to launder the proceeds of their crimes would do so in the jurisdiction where their conduct would not be subject to stringent controls. The only effect of exclusively domestic anti-money laundering measures would this be a change in the geographical distribution of the phenomenon.

This paper explores the development of international anti-money laundering standards and presents their main features in those specific areas that are most relevant to the question of international asset tracing and asset recovery, namely, the standards to prevent and detect transfers of proceeds of crime; the standards related to the adoption of provisional measures to prevent such transfers or the disposal of assets under investigation and the standards of confiscation of proceeds of crime domestically and in cross-border proceedings. It focuses on the rules and standards developed under the auspices of the United Nations, the European Union and the Financial Action Task Force (FATF).

Keywords: Money Laundering, Financial Action Task Force, International Law, Customer Identification, Due Diligence, Asset Recovery