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This paper describes the experience of the mutual evaluations of the Financial Action Task Force on Money Laundering (FATF) that have been carried out since 1992. It focuses on the mutual evaluation process, which is one of the cornerstones of the FATF and has proven to be the most successful element of its activities. The purpose of the mutual evaluation process is to provide a comprehensive and objective assessment of the extent to which the country in question has moved forward in implementing the 40 Recommendations — the effective measures to counter money laundering and to highlight areas in which further progress may still be required.

This study aims to discuss the Financial Action Task Force (FATF) Special Recommendation IX (SR IX) and the importance of complying with the recommendation, which focuses on cross-border declaration or disclosure with the objective to detect and prevent illicit cross-border transportation of cash and bearer negotiable instruments (BNIs). This study also looks into compliance ratings of Asia Pacific Group (APG) 40 countries on the FATF SR IX.

This study reviews the mutual evaluation reports issued by APG on money laundering from 2006 to 2012. Based on the mutual evaluation reports, this study also looks into recommendations and comments given by respective panels. The compliance ratings together with panel’s recommendations and comments compiled in this study will be helpful to relevant authorities for future improvement.

Complying to FATF SR IX helps relevant authorities in detecting and preventing illicit from cross-border transportation of cash and BNIs. Out of 40, only two countries received compliant rating, which shows the need of improvement to ensure that the country is compliant on FATF SR IX.

This study is limited to the panel’s reviews and recommendations on mutual evaluation report and only focuses on FATF SR IX.

This paper analyzes the compliance characteristics of countries based on their FATF mutual evaluation report. It highlights the comments and recommendation for future improvement to ensure that these countries will comply with FATF SR IX.

The purpose of this study is to assess whether level of income of a particular country affects the level of effectiveness in anti-money laundering (AML)/ countering the financing of terrorism (CFT) supervision to identify the most important recommendations in achieving high level of effectiveness and critically discuss the findings of the fourth round evaluations with the outcome of first two objectives.

The level of effectiveness was rated in terms of a four-point Likert scale given 4 for high, 3 for substantial, 2 for moderate and 1 for low level of effectiveness. The countries were ranked using a four-point Likert scale given 4 for high income, 3 for upper middle income, 2 for lower middle income and 1 for low income countries as per the categorisation of World Bank list of economies (World Bank, 2017). For the purpose of estimation, level of effectiveness was rated in terms of a four-point Likert scale given 4 for high, 3 for substantial, 2 for moderate and 1 for low level of effectiveness. The level of technical compliance was ranked using a five-point Likert scale given 5 for compliant, 4 for largely compliant, 3 for partially compliant, 2 for non-compliant and 1 for not applicable as per the ratings given in FATF 2013 methodology (FATF, 2013).

It was observed that the level of income of a particular jurisdiction has a positive relationship with the level of effectiveness in AML/CFT supervision. Statistical analysis reveal that AML/CFT framework on regulation and supervision of financial institutions (Recommendation 26) and providing guidance and feed back to reporting entities (Recommendation 34) have significant impact on effectiveness level on AML/CFT supervision over the powers of supervisors (Recommendation 27), regulation and supervision of designated non-financial business and professions (Recommendation 28) and sanctions (Recommendation 35).

The research was limited to 36 fourth round mutual evaluation reports.

This paper is an original work done by the author as a result of the experience which the author received involving as an assessor in mutual evaluations.

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 purposes of this paper are to discuss the short-term economic impact of the jurisdictions that have been identified as deficient countries in terms of the regime of anti-money laundering and countering the financing of terrorism and to identify the probable reasons for the poor results of mutual evaluation reports of the deficient countries.

This study uses a case study approach to discuss the short-term economic impact of the countries that are under the International Co-operation Review Group (ICRG) process due to poor results of mutual evaluation reports. The sample of countries for the study was selected based on the Financial Action Task Force (FATF) listing as of November 30, 2019. The objectives of the study are expected to be achieved by discussing the issues of these jurisdictions based on publicly available information. However, this study will not consider the long-term economic impact on the countries due to the observed short-term nature of the ICRG process.

This analysis reveals that the ICRG process affects countries in two different perspectives. First, there are implications on the financial system of a deficient country as a result of identifying it as a high-risk country. Second, there are some other forms of economic implications due to the rigorous ICRG process. The downgrading of the sovereign rating by international and credit rating agencies is one of such implications that result in adding a risk premium to the country. This results in increased transaction costs and borrowing costs of deficient countries. Besides, it appears that the ICRG process impacts the capital and currency markets of deficient countries as a result of enhanced due diligence process on fund transfers and limitations in corresponding banking relationships. However, despite these difficulties, some countries have been identified more than once for the ICRG process. Therefore, such countries have to take measures to strengthen the anti-money laundering and countering the financing of terrorism (AML/CFT) regime to avoid future listing. However, long-term sustainability of the countries that were removed from the FATF grey-listing is also questionable under the current FATF methodology of evaluating countries because of the level of effectiveness depends on the judgment of assessors on the risk and context of countries rather the technical compliance.

This study was limited to the countries that were in the grey list as of November 30, 2019. The countries exited from the list have not been considered for the study.

This paper is an original work done by the author by discussing the issues of the ICRG process in respect of deficient countries in view of strengthening the AML/CFT regimes of such countries.

A fundamental element of international anti‐money laundering (AML) systems is the requirement that financial institutions file suspicious transaction reports (STRs) with financial intelligence units. Although the Financial Action Task Force (FATF) has established global standards, there is a range of national laws, practices and experiences with STR systems. The purpose of this paper is to assess the effectiveness of national STR systems, by using Switzerland as a case study.

Primary source documentation, complemented by observations at FATF meetings, are relied on to evaluate STR systems.

The FATF ratings of a country's compliance with international standards are objective, expert driven and consistent in application, but are limited as performance measures in that they ignore the costs of AML and STR measures. The effectiveness of the Swiss STR system is questionable because of serious under reporting of suspicious transactions. The Swiss STR system is efficient to the extent that there is a high usage of STRs and that large amounts of money are automatically frozen under the mandatory reporting obligation.

Evaluation of national STR systems is limited because of a lack of reliable statistics on the extent of money laundering.

This paper is addressed to policy makers who are concerned with assessing the effectiveness of STR systems. Future research would deal with STR systems in developing countries and the role of STRs in uncovering the financing of terrorism.

Insider/outsider description of the FATF mutual evaluation process. Compilation and interpretation of statistical data on STR systems, as performance measures.

The State of Kuwait operates a US$110bn economy and serves as an integral part of the global energy trade, holding over 9% of the world’s oil reserves. In addition, Kuwait is making attempts to open its economy, working towards domestic diversification. This paper aims to understand Kuwait’s internal financial protection mechanisms and their compliance to international standards. It is imperative to understand Kuwait’s legal and regulatory system that combats money laundering and terrorist financing concerns, which further extends to the region’s security discourse. This paper focuses on the State of Kuwait’s internal efforts to propel anti-money laundering/combating terrorist financing (AML/CTF) measures, and further evaluate these measures with respect to international evaluations.

Anti-money laundering and combatting terrorist financing mechanisms require a layered analysis to understand the legislative and bureaucratic organization of enforcement. Further, these measures, taken within the domestic framework, must be compared to international standards, and thus taken into account by observers. This paper studies Kuwait AML/CTF mechanisms by studying the country’s legislation, regulation and implementation. The country’s legislation will offer insight into the basic foundation of the country’s stance against money laundering and terrorist financing. Kuwait’s regulation against money laundering/terrorist financing (ML/TF) will represent the enforcement mechanisms and risk-assessment tools mandated by the independent regulatory authorities. Finally, the country’s enforcement levels will provide a deeper understanding of the country’s systemic approach to successfully combatting ML and TF activities. In addition, this paper also studies international evaluations that present an independent and factual view regarding Kuwait’s AML/CTF structure and its implementation.

Following a thorough examination of primary and secondary literature, this paper finds the State of Kuwait to have taken significant steps in implementing recommended legislative and regulatory mechanisms. The paper found significant strategic deficiencies within internal mechanisms pre-2014, which have been largely resolved in the state’s ex post approach to the Financial Action Task Force’s recommendations. There is also evidence of an improving enforcement mechanism in the state’s recent efforts in reducing exposure to ML and TF risks. However, the paper finds certain “strategic deficiencies” within the country’s internal reporting and external publishing administration.

The State of Kuwait is an important member in the route to regional stability and security in the Middle-East and Arabian Gulf region. Kuwait’s northern border abuts with Iraq, and connects the country with the rest of the Middle-East. The upward regional instability could create internal security risks for Kuwait. In addition, the State of Kuwait has taken the onus, in addition to the Sultanate of Oman, to mediate the diplomatic lapse between members of the Gulf Cooperation Council. The aforementioned positions ascertain a need to examine, and further recommend measures that promote a strong regional financial system.

This paper finds the government of Kuwait to have taken major steps to create a framework that is parallel to international standards. However, there have been significant delays in activating and implementing several regulatory procedures. The delay of certain procedures has since been rectified by the state. This paper presents a comprehensive qualitative analysis of the country’s legislative, regulatory and enforcement structures and further evaluates the internal performance.

In the aftermath of the 2021 Financial Action Task Force Mutual Evaluation Report, legislators, supervisory bodies, law enforcement and the like are focusing on preventing South Africa from being greylisted. This paper performs an analysis of the 2021 South African Financial Action Task Force (FATF) Mutual Evaluation, specifically Recommendation 8 and Immediate Outcome 10. The purpose of this paper is to address the concerns raised and assist those tasked with implementing remediation measures.

Secondary sources such as legislation, case law, textbooks and peer-reviewed publications are used in addressing the concerns. A major focus is placed on the evaluation itself, with an analysis of Recommendation 8 and Immediate Outcome 10.

Despite the non-compliance rating and a low level of effectiveness received regarding non-profit organisations, authorities might not place a large focus on remediating this, as more pertinent issues arise in the report. The lack of focus in this area adds to the likelihood of grey listing by FATF. However, with co-operation from the relevant stakeholders, these low ratings can be improved.

Since the Mutual Evaluation’s release in October 2021 there have not been any papers addressing the highlighted issues in the non-profit sector in South Africa, to the best of the authors’ knowledge. This paper will be the first of its kind and will be of use to authorities as regards mitigating the concerns raised by FATF.

Under scrutiny in light of the growing threat of international terrorism, Qatar faces pressure and accusations that it is not doing enough to counter terror financing and clamp down money laundering. The issue is not that Qatar is avoiding positive action, but that by the time measures are implemented, they become outdated because the international community has by then tightened its regulatory requirements. Qatar’s slow pace has led to a case of cat-and-mouse chase with respect to updating its standards, with a revised set of rules being required by the time Qatar implements the last set of international standards. This study aims to draw on lessons from the past to help Qatar avoid findings of it falling below international standards in the upcoming 2017 mutual evaluation.

The primary purpose of this article is to catalogue Qatar’s efforts to comply with international anti-money laundering (AML) and anti-terror finance standards. It demonstrates the real legislative progress post-2008 recorded by Qatar to minimize money laundering and terrorist financing. The paper also contests the view that Qatari law is insufficient.

The paper explains Qatar’s efforts to comply with the recommendations made by each evaluation by the Financial Action Task Force (FATF). It also highlights the potential for Qatar to be caught out again by the evolution of international expectations in an upcoming review, which, it is understood, is likely to take place in 2017.

No article exists specifically on this research field. As Qatar prepares for its 2017 FATF evaluation, it should be reminded of the need to comply with all new standards.

This paper aims to track Qatar’s progress in preventing abuse of charitable status or of its financial regulations to prevent terror finance.

Qatar’s progress towards meeting the demands of the Central Themes will thus be summarised and explored. This paper tracks its history in response to evolving Financial Action Task Force (FATF) standards, and considers how Qatar can take measures to enhance their reputation.

Qatar’s efforts were found to be sustained but these still fall short of emerging standards. This paper advocates for higher standards.

This original paper and novel approach is useful to policymakers and researchers of AML/CTF law. It is particularly timely in advance of the 2017 mutual evaluation of Qatar. It advances the findings of on another article written by the author.