The Economic and Legal Effectiveness of the European Union’s Anti-Money Laundering Policy

Unger, Brigitte; Ferwerda, Joras; Broek, Melissa van den; Deleanu, Ioana

doi:10.4337/9781783472772

Cited by 37 publications

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“…A few studies have examined this (e.g. Masciandaro 1999;Reuter and Truman 2004;Unger et al 2014), but all have shied away from reaching a general judgment on the question, merely noting factors that would need to be considered.…”

Section: Introductionmentioning

confidence: 99%

Learning from Money Laundering National Risk Assessments: The Case of Italy and Switzerland

Ferwerda

Reuter

2018

Eur J Crim Policy Res

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The FATF requires each country to undertake a national risk assessment (NRA) to show the government's knowledge of money laundering risks. There is little guidance as to how these NRAs are to be conducted, and those that have been published show great variation in terms of data used, analytical methods, and the depth of policy analysis. After expounding some of the concepts basic to any risk analysis, we analyze two of the more detailed published NRAs, from Italy and Switzerland. The Italian NRA, focused on domestic criminal threats, relies almost exclusively on expert opinion. Its most distinctive product is an analysis of the high-threat sectors and the need for specific kinds of policy interventions. The Swiss NRA, focused primarily on threats from other countries, presents far more quantitative data, almost exclusively from suspicious activity reports, to supplement expert opinion. Though both NRAs provide useful insights about money laundering risks, neither is conceptually clear; in particular, neither reflects contemporary practice in the use of expert opinion. Our critique is aimed at helping strengthen the next round of NRAs, and identifies lessons learned for all countries. Our recommendations include the use of risk assessment standards from other fields, the addition of a measure of uncertainty, and a more critical assessment by FATF in its NRA evaluations.

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Section: Introductionmentioning

confidence: 99%

Learning from Money Laundering National Risk Assessments: The Case of Italy and Switzerland

Ferwerda

Reuter

2018

Eur J Crim Policy Res

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“…Some have argued the justification for the expansion of AML has been informed by using second-best measures, such as numbers of suspicious activity reports (SARs) (Harvey 2008: 203;Zoeppi 2015), which suggests there has been an expansion of the regime without any legitimisation. Indeed, Unger and Ferwerda (2014) question the costs of this expansion given that the benefits are unclear.…”

Section: Introduction: the Rationale For Identifying Money Launderingmentioning

confidence: 99%

Identifying Money Laundering Risk in the United Kingdom: Observations from National Risk Assessments and a Proposed Alternative Methodology

Hopkins

Shelton

2018

Eur J Crim Policy Res

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Two National Risk Assessments (NRA) of money laundering (ML) have now been published in the United Kingdom (see HM Treasury 2015 and 2017). While both represent an attempt to identify the risks of ML, there are limitations in relation to the conceptual framework and the methodology used. This paper reviews the UK NRAs and considers whether revision of the methodology employed could help to both remedy these limitations and generate more robust findings. Drawing upon the findings of the UK strand of project Identifying and Assessing the Risk of Money Laundering in Europe (IARM), it outlines how a composite ML risk indicator was developed through analysis of threats and vulnerabilities across 43 police areas. The findings demonstrate that risks are highest in the City of London and the Metropolitan Police area, which is largely explained by the presence of organised crime groups, connections to risky jurisdictions and the cash intensity of businesses. Although the findings should be treated with caution, it is posited that this methodology could be used to help future NRAs develop a more robust framework to understand ML risk and ultimately develop more effective preventative strategies.

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“…Thus, there has been a modest line of efforts to develop estimates of money laundering at the national and global levels; see [11], Chapter 2, for a review. More recently, Walker and Unger [12] have made some highly questionable high-end guesstimates based on heroic assumptions and extrapolations (developed further in [13]). Antonio Maria Costa, head of the UN Office on Drugs and Crime, in 2009 during the Great Recession, 'said he has seen evidence that the proceeds of organized crime were "the only liquid investment capital" available to some banks on the brink of collapse….…”

Section: How Much Money Is Laundered?mentioning

confidence: 99%

“…However there is a sense in which these 'data' are merely advocacy claims for attention to particular problems: no-one takes them very seriously as baselines for evaluating policy effectiveness, except to suggest that there is a need to do more. 13 Conversations in professional circles suggest that liberal/leftist skeptics stay away from critiquing claims about Grand Corruption and corporate tax fraud revenues because of the desire not to undermine the fight against these excoriated activities.…”

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confidence: 99%

“…12 Oddly enough the 2015 US National Risk Assessment uses UNODC estimates of drug revenues in the US rather than those of [16], even though the latter were sponsored by the Office of National Drug Control Policy and first published in 2014. 13 For analogies elsewhere, see the valuable collection edited by Andreas and Greenhill [19], which deals only very lightly with laundering and fraud.…”

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confidence: 99%

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Can the AML system be evaluated without better data?

Levi

Reuter

Halliday

2017

Crime Law Soc Change

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The Anti-Money Laundering regime has been important in harmonizing laws and institutions, and has received global political support. Yet there has been minimal effort at evaluation of how well any AML intervention does in achieving its goals. There are no credible estimates either of the total amount laundered (globally or nationally) nor of most of the specific serious harms that AML aims to avert. Consequently, reduction of these is not a plausible outcome measure. There have been few efforts by country evaluators in the FATF Mutual Evaluation Reports (MERs) to acquire qualitative data or seriously analyze either quantitative or qualitative data. We find that data are relatively unimportant in policy development and implementation. Moreover, the long gaps of about 8 years between evaluations mean that widely used 'country risk' models for AML are forced still to rely largely on the 3rd Round evaluations whose use of data was minimal and inconsistent. While the 4th round MERs (2014-2022) have made an effort to be more systematic in the collection and analysis of data, FATF has still not established procedures that provide sufficiently informative evaluations. Our analysis of five recent National Risk Assessments (a major component of the new evaluations) in major countries shows little use of data, though the UK is notably better than the others. In the absence of more consistent and systematic data analysis, claims that countries have less or more effective systems will be open to allegations of ad hoc, impressionistic or politicized judgments. This reduces their perceived legitimacy, though this does not mean that the AML efforts and the evaluation processes themselves have no effects.Crime Law Soc Change (2018) 69:307-328 https://doi

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The Economic and Legal Effectiveness of the European Union’s Anti-Money Laundering Policy

Cited by 37 publications

References 0 publications

Learning from Money Laundering National Risk Assessments: The Case of Italy and Switzerland

Learning from Money Laundering National Risk Assessments: The Case of Italy and Switzerland

Identifying Money Laundering Risk in the United Kingdom: Observations from National Risk Assessments and a Proposed Alternative Methodology

Can the AML system be evaluated without better data?

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