draining development.pdf - Khazar University

How Well Do Anti–Money Laundering Controls Work in Developing Countries? 405Key questions remain about the implementation and impact of AMLcontrols in developing countries in relation to corruption and othercrimes that depend on corruption. For example, how do AML controlsfunction in environments in which financial institutions and professionals—thoseexpected to submit SARs and cash deposit and transferreports—may be afraid of leaks reaching powerful private sector andstate actors, gain profit from dealings with them, or have relatively fewalternative sources of profit?The Western powers have, arguably, considered AML and its associatedlegislative infrastructure mainly as a device to ensure mutual legalassistance. Perhaps AML also helps prevent criminal activities fromharming developed countries, though the crimes have been thrust on thedeveloping world. (However, within the developing world, there arehuge variations in implementation levels and difficulties, as well as in thesupport for the idea of AML.) 34 The amount of evidence collected systematicallyis modest, but not only the FATF, but also the FATF-StyleRegional Bodies have been encouraged to develop their own moneylaundering typologies and assess trends in laundering and the impact ofcontrols. 35 Both of these present serious analytical challenges, not least indisentangling the extent to which the visible tip of the crimeberg reflectsreal changes or merely or mostly investigatory foci. The decision to havea typology on a particular subject (such as the use of the timber trade ore-gambling) can generate a sharper analytical focus among memberstates that can bring to light issues not formerly addressed. This can createthe illusion that there is a trend, but may merely have revealed moreof the dark side of this sort of activity. Typologies also present communicativechallenges because anonymization can easily render casesunmemorable, defeating the object of the typology. Without a greaterunderstanding of these elements of implementation and impact, it is difficultto gauge the extent to which the continuance of corruption (andother serious crimes for gain, including tax fraud, at least in principle)may be due to theory failure or to implementation failure in the AMLregime.It is arguable that the principal benefit (and perceived benefit) ofAML regimes in developing countries is the political and economicacceptance that AML brings, allowing membership in the internationaleconomic community, rather than anything more specific. This has to be