The Dual Burden of FATF Compliance for Developing Countries
In this Research Article, the author shows how developing countries carry a dual burden under the FATF system: costly efforts to build effective AML/CFT regimes; and the added economic fallout of greylisting when they fall short. She argues that mutual evaluations and listing should be context sensitive to avoid undermining reform in lower-capacity states.
Many developing countries face significant challenges in establishing an effective anti-money laundering/counter financing of terrorism (AML/CFT) system, while simultaneously meeting the demands of the Financial Action Task Force's mutual evaluation process. This creates a dual burden of compliance. Jacqueline Q Borja examines how these constraints hinder a country's ability to demonstrate effectiveness of its AML/CFT system, impacting the ratings of their mutual evaluations. This increases the risk of greylisting, which, in turn, has potential negative consequences, further impeding efforts to strengthen the system.
WRITTEN BY
Jacqueline Q Borja
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