Assessing the effectiveness of national financial monitoring systems in global practice

Abstract

Subject. Responding to new global security challenges at the end of the 20th century, countries established financial action systems against money laundering (FATF) and national systems countering money laundering and terrorism financing (AML/CFT). Seeing rapidly changing circumstances and AML/CFT threats, the global community and national governments have to continuously improve their anti-money laundering mechanisms. Objectives. We evaluate the efficiency of national financial monitoring systems worldwide. Methods. The study is based on the systems approach, methods of comparative analysis and economic-mathematical modeling. Results. Having analyzed the foreign practices, we discovered that national financial monitoring systems were established under the FATF standards, though still having their own distinctions. We evaluated the efficiency of AML/CFT systems in the USA, the UK, Israel, China and the EAEU. The article highlights strengths and weaknesses of some financial monitoring systems. We made our suggestions how the international cooperation in AML/CFT should be developed. Conclusions and Relevance. Key actions for raising the efficiency of the Russian AML/CFT system shall address anti-money laundering legislation, especially during the dynamic digitalization in financial technology and cybercrime.