Anti-Money Laundering (AML) and
Counter Terrorism Financing (CTF)
There have been many developments in efforts to combat Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF). One of these initiatives is the Financial Action Task Force (FATF), established in 1989, which aims to fight both AML and CTF, as well as other financial threats to the economy, by setting up laws and regulations that protect against the these illegal activities and help detect when they are taking place.
Below is more information about each one of these initiatives to fight illegal financial activity.
Government guidelines surrounding money laundering are generally referred to as Anti-Money Laundering (AML). According to a study from the United Nations Office on Drugs and Crime (UNODC), in 2009, over 3% of the global gross domestic product was laundered illegally. Money laundering often occurs when a business owner sets up an actual, legitimate business, as a way to disguise the illegal activity going on behind the scenes. Many times these businesses will be cash-run so the transactions cannot be tracked or monitored as easily.
Anti-Money Laundering efforts can actually end up reducing other crimes as well. By identifying laundered funds, those funds can then be traced to other sources or persons performing illegal activities, and the funds can be returned to where they originally came from, which was often not an illegal interaction.
The International Monetary Fund (IMF), based out of Washington, D.C. and consisting of 189 countries, is another organization that monitors and dispels money laundering. The IMF was created in 1945 to help create financial stability and economic growth throughout the world, including the monitoring of international exchange rates and payments. The IMF also conducts and distributes key research in these areas.