draining development.pdf - Khazar University

How Well Do Anti–Money Laundering Controls Work in Developing Countries? 379a difference in how efficient an FIU is in follow-up action. As of July2010, there were 127 members of the Egmont FIU Group, including therichest jurisdictions and poorer countries. FIUs are absent altogetheronly in the poorest countries, and some of these countries are not admittedto Egmont or have been suspended from the group because, it is felt,they have not reached a sufficient standard of competence and independence.Hitherto, most of the attention has been paid to laundering andthe financing of terrorism because these affect developed countries (andtheir associated commercial and security interests worldwide). Theinterest of developed countries in developing countries has mainly takenthe form of reviewing the ways in which the tolerance or alleged toleranceof the latter is inhibiting the success of efforts to control drugs,organized crime, human trafficking, and terrorism.There are signs of increased systematic action against grand corruptionand laundering. The G-20 Seoul Summit Action Plan of November2010 requires an annual follow-up. 8 These corruption-related reputationalissues and collateral harms and benefits arguably have becomepart of the goals of AML. Swiss regulators and investigative judges mighthave expected even greater credit for their ingenious use of their powersand creative applications of the law from Marcos onward (for a moreskeptical view, see Chaikin and Sharman 2009). The Swiss use this aspolitical capital to compare themselves favorably with the United Kingdom,the United States, and the latters’ “satellite states,” while continuingto advertise Swiss banking secrecy unless criminal investigations yieldsufficient evidence to generate mutual legal assistance.Measurement and Patterns of Laundering Relativeto CorruptionOne of the difficulties faced by any study in this area is that the definitionof corruption may be narrowly interpreted to include only bribery (asthe criminal law and criminal statistics do) or—as is now more commonin analytical discourse—may be more broadly interpreted to include themisuse of office to steal funds or to acquire assets for private gain at significantlybelow true market value. If a PEP has a substantial measure ofcontrol over a country’s treasury, there is no need to bribe treasury staff:in addition to the custom of obedience, threats—including the threat of