draining development.pdf - Khazar University

How Well Do Anti–Money Laundering Controls Work in Developing Countries? 399that this is impracticable), though there is pressure upon them to do so.It would take a major transformation in the current frailties of the globalAML system to trap corrupt funds paid in developing countries or tolink most bribes paid elsewhere to corrupt public officials through thenominees of these officials.Analysts of the corruption-laundering nexus typically explain thepersistence of the nexus in terms of the following:• The relative lack of FATF interest in the subject, though this haschanged recently• The lack of passage or implementation of AML legislation oncorruption• Political influence on offices of prosecutors and the judiciary either toprosecute regime opponents and financial institutions or not• The disconnect between anticorruption and AML bodies that maynot even be aware of each other, let alone working cooperatively(ADB and OECD 2007; Chaikin and Sharman 2009; Goredema andMadzima 2009; Sharman and Mistry 2008)The general theme is missed opportunities for control and what mightbe needed to generate tougher controls. Thus, Goredema and Madzimapoint to five countries in the region that have included unexplainedwealth provisions in their legislation, but none of which has established arecord of enforcement, principally, it is claimed, because the privatelyheld financial data are “not normally within the purview of an anticorruptionagency” (Goredema and Madzima 2009, 26). This leads torecommendations to combine or coordinate FIUs, anticorruption agencies,and similar bodies and to ensure their autonomy from government,though the method by which these aims are to be achieved (and the wayin which the unmentioned necessary confidence of financial and otherregulated institutions to make reports is to be attained) remains vague. Itwould be surprising if there were not an inverse relationship betweentransparency and the exploitation of corrupt opportunities. 26 Undersuch circumstances, the prospects for the local impact of AML on grandor even mesolevel corruption are poor: the degree of political control(and the democratization of proceeds in terms of the bribery of judicialauthorities) might protect corrupt PEPs against serious action. 27 Goredemaand Madzima state as follows: