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This paper aims to provide a macro analysis of the USA’s anti-money laundering (AML) legislation. In examining the context and consequences of these regulations, a general determination can be made on the effectiveness of the current US AML legislation. The major AML regulations in the USA are covered under the Bank Secrecy Act, USA Patriot Act and the Office of Foreign Assets Control. It is difficult to determine what constitutes as implementation and maintenance of effective AML Compliance Programs because US federal AML requirements remain largely dynamic. This paper will provide some context to why certain major AML regulations were established as well as the reasoning behind their implementation. This paper will then attempt to determine the effectiveness of current AML regulations, particularly on the banking sector, by looking at several cases of alleged failure to maintain effective AML Compliance Programs. An examination will be conducted on HSBC’s $1.9 billion settlement in 2012 to the US government, as HSBC failed to establish a reasonable AML program according to the US Department of Justice press releases.

A brief description of major US AML regulations pertaining to the 2012 HSBC case is first made. Also, a look into the frequency of suspicious activity report (SAR) filings as well as initiated money laundering investigations is made. The paper critically analyzes the Financial Action Task Force (FATF)’s evaluation of US AML regulations.

It is evident that the FATF held an accurate evaluation of US AML regulations being both very comprehensive and severely enforced. The main criticism is with the implementation of these regulations driving adverse economic and social effects. Financial institutions fear being charged with not having a proper AML program; this causes banks to be more inclined to inflate SARs as well as engage in financial exclusion. It is difficult to prevent these adverse effects, as they directly result from having strict and comprehensive AML legislation, which is necessary to prevent and detect money being laundered.

A determination as to whether US AML regulations need strengthening or is too strict in that it causes adverse effects.

A macro analysis of America’s AML legislation is severely needed. Many papers on the issue lack a thorough description of the large-scale socio-economic effects of the AML programs of American financial institutions.

The Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Thematic Review of Banking & Insurance sectors conducted by Bank Negara Malaysia (BNM) in 2013 indicated that oversight functions are still inadequate in the areas of compliance, internal audit, board of directors and senior management. The oversight functions refer to the AML/CFT compliance programme, which financial institutions, including Islamic banks, are obliged to execute as a part of mitigating activities against money laundering and terrorist financing. The main purpose of this chapter is to analyse whether there is any improvement in the oversight functions at the Islamic banks in Malaysia since the release of the thematic review report by BNM on 17 September 2014. This research is important as penalty for non-compliance under Section 22 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA) is severe. Section 22 of AMLATFPUAA entails personal responsibility on the compliance officer of an Islamic bank and not the reporting institution as a whole. Qualitative research method via interview is employed to gauge the extent of Islamic banks’ adherence to AML/CFT compliance programme. This chapter is significant as it provides Islamic banks and future researchers with the details of the compliance study as well as the current status of AML/CFT compliance programme within the Islamic banks in Malaysia.

The purpose of this paper is to examine the extent to which the corporate social responsibility (CSR) law will help combat money laundering in the United Arab Emirates (UAE).

The paper will first focus on examining whether money laundering and CSR are compatible. Such an analysis will then inform decisions on whether to include anti-money laundering in CSR disclosure requirements.

Key findings from the analysis have shown that the UAE CSR law does not explicitly mention money laundering as part of CSR disclosure requirements. Anti-money laundering (AML) and CSR are compatible and convergence, but money laundering is not yet an integral element of CSR disclosure requirements.

There are no clear mechanisms or provisions under the UAE CSR law on how money laundering can be included in CSR disclosure requirements, whether voluntary or mandatory. A pressing challenge now is whether the UAE should regulate AML/combatting the financing of terrorism disclosures under the CSR law. The main concern is that such a move could make mandatory disclosure another technical and regulatory requirement that UAE business must comply, which will be inimical to fostering a strong CSR culture.

The legal profession is vulnerable to abuse for the purposes of money laundering and terrorist financing. According to the Financial Action Task Force (FATF), that vulnerability justified updated global recommendations that urge countries to require lawyers, notaries and other independent legal professionals – including sole practitioners, partners and employed professionals within law firms – to identify, assess and manage the money laundering and terrorist financing risks associated with their services and to ensure that they have appropriate mechanisms in place to provide risk assessment information to competent authorities. Those recommendations proved contentious, with concerns raised by both legal academics and legal professional bodies about the implications of certain aspects of the requirements for the principle of lawyer–client confidentiality. Despite those concerns, many countries have introduced or amended regulatory regimes to extend their application to the legal sector to comply with the FATF’s standards. The purpose of this paper is to contribute to the debate surrounding the extension of AML/CTF obligations to the legal profession.

This paper considers three jurisdictions – the UK, Israel and Australia – at different stages in their journey towards compliance with the FATF’s anti-money laundering (AML) and counter-terrorist financing (CTF) standards for the legal profession. While the UK has a long-established and well-embedded AML regulatory framework for legal professionals, Australia remains non-compliant with the FATF standards. Israel occupies a position between these two ends of the spectrum: following criticism of the omission of lawyers from its AML/CTF regime, Israel implemented due diligence rules for the profession. In 2018, Israel was found to be partially compliant with the relevant FATF recommendations.

It argues that although there are challenges involved, there are also important benefits. Therefore, Australia should act to implement its proposed changes sooner rather than later. Its persistent failure to appropriately address globally recognised areas of vulnerability leaves Australia open to integrity abuse. In addition, if the government delays addressing this issue until pressure from the FATF (such as deadlines for compliance and, if necessary, a finding of non-compliance) forces it to comply, this may tarnish Australia’s reputation, threaten its access to international financial markets and adversely affect the legitimacy and effectiveness of its AML/CTF regime.

Originality in this context refers to the distinctiveness and uniqueness of a paper’s content and approach. In this case, the originality lies in the fact that there is no other existing paper that addresses the topic of three common-law jurisdictions at various stages of their progression towards aligning with the FATF AML/CTF standards, specifically within the context of the legal profession. Furthermore, the timeliness of this paper is underscored by the fact that multiple jurisdictions are currently deliberating their positions on the focus of this paper. This adds to its originality and relevance, as it addresses a gap in the literature while also contributing to the ongoing discourse surrounding compliance with FATF’s standards.

This paper aims to critically examine the digital transformation of anti-money laundering (AML) and countering the financing of terrorism (CFT) in light of the Financial Action Task Force (FATF) San Jose principles, the Organisation for Economic Co-operation and Development (OECD) principles for artificial intelligence (AI) and the proposed European Union (EU) Artificial Intelligence Act. The authors argue that AI tools can revolutionize AML/CFT and asset recovery, but there is a need to strike a balance between optimizing AML efficiency and safeguarding fundamental rights.

This paper draws on reports, legislation, legal scholarships and other open-source data on the digital transformation of AML/CFT, particularly the deployment of AI in this context.

A new regulatory framework with robust safeguards is necessary to mitigate the risks associated with the use of new technologies in the AML context.

This study is one of the first to examine the use of AI in the AML/CFT context in light of the FATF San Jose principles, the OECD AI principles and the proposed EU AI Act.

This study examines the influence of anti-money laundering (AML) regulations on the financial development-economic growth nexus around the world.

The study uses data from 165 countries spanning continents, income levels, and regulatory regimes from 2012 to 2018. The Prais–Winsten (1954) and Hansen (2000) panel threshold estimation approaches were used to assess the study's hypothesized relationships.

Financial development, according to the research, generally stimulates economic growth. However, the authors find evidence of AML regulations' threshold effect on the finance-growth connection, with the impact of finance on growth being positive below the threshold value. Above the threshold, however, the authors observe a negative influence. Further, the authors find that AML regulations have a considerable detrimental impact on the finance-growth nexus over the threshold for developed countries. However, the authors find a positive but insignificant effect of finance on growth below the AML regulations threshold for African countries, while finance positively impacts growth above the AML regulations threshold.

The findings of the study imply that countries must make conscious efforts to combat the incidence of money laundering by establishing policies to improve financial transparency and standards, promoting public sector transparency and accountability, reducing legal and political risk, and combating bribery and corruption.

This study contributes to the literature as it is the first attempt to examine the moderating role of AML regulations in the finance-growth nexus. Also, the study examines the threshold effect of how AML regulations impact the finance-growth nexus.

This study aims to examine the associations between customers’ awareness of money laundering and terrorism financing, trust in banking secrecy measures and discomforts in fulfilling the bank’s anti-money laundering (AML) procedure and their acceptance of existing practices of banks regarding AML and counter-terrorism financing.

This study adapts a set of survey instruments developed and validated by prior studies to collect the required data. A convenient sample of 160 Malaysian bank customers aged 18 and above were surveyed to collect the data.

This study finds a significant relationship between the respondents’ awareness of money laundering and terrorism financing, trust in banking secrecy measures and their acceptance of the bank’s AML and counter-terrorism financing practices. However, no significant relationship is documented between the level of discomforts experienced by customers in satisfying the banks’ AML requirements and their acceptance of the banks’ AML practices. These results hold even after controlling for alternative explanations of the customers’ acceptance of banking practices examined in the extant literature: age, gender, location, literacy level and occupation.

This study extends the literature on customers’ acceptance of banking practices more broadly by providing empirical evidence on the role of customers’ awareness on issues underlying the banking practices and their trust in the bank’s secrecy measures.

This study also provides some practical contributions by shedding some light on the factors that could help banks increase the acceptance of AML practices among their customers. Thus, the findings of this paper help banks focus their effort on these factors and hence increase acceptance rate more effectively.

Drawing on the elements of the theory of reasoned actions and technology acceptance model and the extant research on trust-privacy and comfortability in a banking setting, this study proposes an integrated approach that is theoretically and empirically grounded.

This paper critiques the recent anti‐money laundering (AML) legislation in Turkey and the European Union (EU) in order to determine whether there is convergence between them. Given the fact that Turkey is a candidate country for the EU membership, harmonisation of Turkish and the EU AML frameworks has become increasingly important. These AML laws pose important responsibilities for the financial and legal sectors.

In order to facilitate the evaluation process, the AML regimes examined are compared in regards to various aspects, such as criminalisation of money laundering, recording and reporting obligations, enforcement and sanctions mechanisms. Findings from activity reports from the regulatory bodies as well as semi‐structured interviews conducted with relevant professionals are incorporated into the discussion.

It can be argued that the Turkish AML regime is in line with the EU AML framework. However, there is a need for government authorities to coordinate their efforts with the relevant independent regulatory professional bodies that represent the liable professionals in Turkey. While it is evident that each national regime in the EU has adopted a unique AML framework, minimum standards provided by international (e.g. the Financial Action Task Force) and regional (e.g. EU) instruments have been the main driving force behind all national laws.

The involvement of professional regulatory bodies will enhance competence to monitor compliance and provide training mechanisms and guidance for liable professionals pertaining to AML regulations.

Effectiveness of AML initiatives will enhance with improved cooperation and communication between the executive, law enforcement agencies and businesses. This will improve the reporting of suspicious financial activities and subsequent enforcement.

The paper provides an up‐to‐date account of the Turkish legal regime pertaining to AML and demonstrates its shortcomings whilst assessing it against the EU AML framework. The findings of the study contribute to the existing literature and shed light on areas for reform.

To gauge the extent to which the global financial system is anti‐money laundering (AML)/countering the financing of terrorism (CFT) prepared by analysing and comparing the AML/CFT systems of Financial Action Task Force (FATF) members with countries belonging to regional AML organisations.

Mutual evaluation data of 16 FATF members and 21 non‐FATF countries is analysed and compared using Kruskal‐Wallis and paired‐t tests to determine similarities and differences across the two groups of countries.

AML/CFT systems of FATF members and non‐FATF countries are poor. The lack of compliance with global AML/CFT standards leaves so many holes in these countries' regulatory, financial, and legal systems that money laundering with or without any relationship to the financing of terrorism, would be relatively easy to achieve.

In using an analytical approach it has been necessary to put numerical values on compliance levels used by the FATF. Given that these are very broad, substituting a single value for each compliance level will provide only a crude measure of compliance for comparisons to be made. The results should therefore be used as a guide to the ranking and compliance of countries rather than some exact measurement of compliance.

There will need to be follow‐up visits to this round of mutual evaluations to evaluate country responses to their poor assessments.

Publication of mutual evaluations by the FATF and a number of regional bodies has enabled a comparison of AML/CFT systems from countries around the world. Lack of data has not enabled this to be done before.

The purpose of this paper is to assess the effectiveness of anti-money laundering (AML) reporting system in India in terms of Suspicious Transaction Reports (STRs) and its impact on countering money laundering through the conviction and confiscation. The main emphasis of financial action task force (FATF) guidelines on AML and countering of financing of terrorism (CFT) is the obligation of financial institutions and designated non-financial businesses and professions to instantaneously report the suspicious transactions to Financial Intelligence Unit (FIU), an agency with a mandate to deal with AML.

It is a descriptive study to explore the outcome of the AML process. The study has used the secondary information published in the annual reports of FIU-India and FATF. The study period is 2006-2007 to 2011-2012.

Though there is a significant increase in the STRs filed, the impact of AML is not realized in terms of neither AML-related convictions nor confiscations, since the enactment of the Prevention of Money Laundering Act (PMLA). However, the AML/CFT regime in India has just started earnestly, and it still has to go a long way before stabilizing and achieve tangible results.

In the Indian context, only few of the effectiveness indicators of the FATF methodology 2013 could be selected due to the limited availability of data, as much of the information maintained by various stakeholders, including reporting entities, FIU-India and other investigative and enforcement agencies, is kept confidential. Thus, it is difficult to establish the effectiveness of enforcement function of AML. Evaluation of effectiveness of AML is judged on the basis of convictions and confiscations.

There is a dearth of studies assessing the reporting system under PMLA and thus this paper attempts to throw some insights on the outcome of AML chain, especially the impact of reporting suspicious transactions.