11th September, 2001: will it make a difference to the global anti‐money laundering movement?
| DOI | https://doi.org/10.1108/13685200310809365 |
| Published date | 01 January 2003 |
| Date | 01 January 2003 |
| Pages | 9-16 |
| Author | Jackie Johnson |
| Subject Matter | Accounting & finance |
ANALYSIS
11th September, 2001: Will It Make a Dierence to the
Global Anti-Money Laundering Movement?
Jackie Johnson
INTRODUCTION
11th September, 2001 is not a day that will be forgot-
ten in the USA, for an act of terrorism not only
struck New York's ®nancial centre but also high-
lighted the vulnerability of the country's ®nancial
system and exposed its exploitation for criminal
purposes.
The initial response of the Bush administration was
twofold: one, ®nd the terrorists and two, track down
and seize their ®nancial resources. To go after the ter-
rorists themselves would take time and need the
backing and help of the country's allies, but the
USA could start the hunt for terrorists' ®nancial
resources immediately. The Bush administration did
seek the cooperation of the world's governments,
®nancial centres and ®nancial institutions but they
did not need their backing to make the ®rst move.
With terrorism now viewed as both a threat to US
national security and the integrity of the US ®nancial
system, money laundering, being inexorably linked
to the hiding of terrorist funds, was now elevated
to the same level. But, would this single terrorist
act provide the impetus to kick-start the faltering
US anti-money laundering programme and put
enough pressure on delinquent money laundering
centres, so that the numerous holes in the global
®nancial network would begin to close? Would
enough countries now act to stem the ¯ow of terror-
ist ®nance and as a consequence strengthen their
anti-money laundering legislation?
GLOBAL ANTI-MONEY LAUNDERING
PRE-11TH SEPTEMBER
It was not money laundering itself that drove the ®rst
global anti-money laundering movement. It was the
growth of the illegal drug trade and the inability of
law enforcement and the legal system to indict and
convict those involved. The sheer magnitude of the
drug trade and its corresponding pro®tability drove
the General Assembly of the United Nations, at the
Vienna Convention (1988),
1
to adopt a universal
pledge to halt the money laundering that enabled
criminals to enjoy the proceeds of their criminal
acts. As a result, in 1989 the G7 group of countries
2
established the Financial Action Task Force (FATF)
to examine measures to combat money laundering.
Since 1989 FATF membership has grown to
include 29 countries and two regional bodies. Other
regional anti-money laundering organisations have
been formed by countries in Africa, South America,
the Caribbean, Europe and Asia. They include:
Ð the Asia/Paci®c Group on Money Laundering
with 20 members;
Ð the Council of Europe Select Committee of
Experts on the Evaluation of Anti-Money
Laundering Measures monitoring 22 European
countries which are not members of the FATF;
Ð the Caribbean Financial Action Task Force
CFATF with 26 members;
Ð the Eastern and Southern Africa Anti-Money
Laundering Group with 14 members; and
Ð the Financial Action Task Force on Money
Laundering in South America with 10 members.
In total this represents about two-thirds of the UN's
member states. Unfortunately, even though these
countries publicly declare their opposition to
money laundering, ten of them were on the FATF's
2000 blacklist of 15 money laundering centres. Of
these 15 only three countries managed to improve
the standard of their ®nancial sector supervision to a
high enough level to be removed from the list by
the time the revised 2001 list was published. They
were the Bahamas, the Cayman Islands and Liechten-
stein. Seven more countries were added: Egypt,
Guatemala, Hungary, Indonesia, Myanmar, Nigeria
and Ukraine.
3
Hungary, Indonesia and Ukraine all
belong to an anti-money laundering organisation;
clearly pressure must be applied to these countries
by their respective anti-money laundering bodies to
Page 9
Journal of Money Laundering Control Ð Vol. 6 No. 1
Journalof Money Laundering Control
Vol.6, No. 1, 2002, pp. 9± 16
#HenryStewart Publications
ISSN1368-5201
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