Anti-money laundering effectiveness: assessing outcomes or ticking boxes?

Abstract

PurposeThis article aims to constructively critique the new global methodology for evaluating the effectiveness of anti-money laundering regimes against defined outcomes.Design/methodology/approachWith surprisingly little discussion at the intersection of the money laundering and policy effectiveness and outcomes scholarship and practice, this article combines elements of these disciplines and recent peer-review evaluations, to qualitatively assess the Financial Action Task Force’s (FATF’s) anti-money laundering “effectiveness” methodology.FindingsFATF’s “effectiveness” methodology does not yet reflect an outcome-oriented framework as it purports. Misapplication of outcome labels to outputs and activities miss an opportunity to evaluate outcomes, as the impact and effect of anti-money laundering policies.Practical implicationsIf the “outcomes” of the “effectiveness” framework do not match the crime and terrorism prevention policy goals of nation states, the new “main” component for assessing the effectiveness of anti-money laundering regimes potentially detracts focus and resources from, rather than towards, intended policy objectives.Originality/valueThere is a dearth of scholarship whether the global anti-money laundering “effectiveness” framework is sufficiently robust to assess effectiveness as it purports. This article begins addressing that gap.