Scoping the regulatory environment for harnessing normative anti-money laundering laws in LDCs

Abstract

Purpose

The paper aims to explore the regulatory environment in less developed countries (LDCs) to evaluate their preparedness to harness normative anti-money laundering (AML) regimes. The global AML/CFT regimes are evolved at a global level but implemented within sovereign states – different regulatory environments and the possibility of regulatory disparities. The fundamental question this paper seeks to answer is whether the global AML framework can be as carefully designed as to afford a level playing field to all participating countries? Is this a possible prospect and if not what should be the way forward? The paper articulates the regulatory environment in LDCs to evaluate its implications on individual state's ability to harness normative AML regimes.

Design/methodology/approach

This paper was partly written by an empirical study based on the author's familiar experience in relation to financial markets regulation and the challenges in LDCs. The paper was also partly written drawing on the author's PhD thesis entitled: the Global The thrust of the thesis was to examine the intricacies of the global AML/CFT framework focusing largely on three jurisdictions – UK, Uganda and South Africa. The paper has been written based on these three jurisdictions. The contention of the paper is that while it is necessary for states or oversight institutions to adopt interstate regulatory initiatives on overlapping challenges such as money laundering, the flipside side is that global prohibition regimes often tend to overlook the practical realities in member countries where they are implemented. Finally, this paper proposes the need for a hybrid approach designed to accommodate both the needs of oversight institutions and respective individual countries where envisaged regimes are introduced.

Findings

The research findings of the study are that the global market system is fraught with dualities with the potential to resonate differently in each jurisdiction in harnessing desired AML/CFT regimes. The dynamics of development in DCs and LDCs are different and this has different implications for each country in harnessing the envisaged AML/CFT regimes.

Originality/value

The paper was written by internalising the practical experiences of LDCs in harnessing global AML/CFT regimes. While the author has benefited from the scholarly work of others, he has done it in a distinctive way to foster the objectives for writing this paper. This paper is original because it proffers approach that could potentially enhance the study of global prohibition regimes and how they are harnessed in individual jurisdictions.

Citation

Mugarura, N. (2013), "Scoping the regulatory environment for harnessing normative anti-money laundering laws in LDCs", Journal of Money Laundering Control, Vol. 16 No. 4, pp. 333-352. https://doi.org/10.1108/JMLC-04-2013-0009