draining development.pdf - Khazar University

406 Draining Development?set against the substantial costs of introducing such regimes in countriespoor in human resources. The travel and associated costs of participatingin Egmont, FATF-Style Regional Bodies, and so on—often paid forout of aid or budgets for law enforcement assistance—are substantial.Under certain circumstances, such as the plethora of reforms that followedMontesinos and, to a lesser extent, Marcos, a plausible case can bemade that economic benefits outweigh economic costs, but this is rarelythe trend in the evidence. Their case studies of Barbados, Mauritius, andVanuatu led Sharman and Mistry (2008) to express the judgment thatthe international AML regime has imposed undue costs on small commonwealth(and, by inference, other) jurisdictions. One expert interviewedfor this project noted that at least one-fifth of the qualifiedaccountants in Niger were employed in the FIU there, but had little todo. This (and the Malawi and Nauru examples cited elsewhere above)looks like an egregious waste of resources to avoid even more damagingexternal economic sanctions. Perhaps the Sharman and Mistry analysistook insufficient account of the damage done not only to their case studyjurisdictions, but to other jurisdictions as a result of regulatory deficiencies,for example, through the use of corporate secrecy vehicles to commitfraud or grand or meso corruption embezzlement elsewhere. AML,after all, is about reducing global sociopathy in sanitizing the proceeds ofcrime elsewhere. What does seem clear is that some regimes receive asmall proportion of their gross domestic product from fees from thecorporate and financial service sector and that maintaining serious AMLcapability makes this of little net value to a country.If regimes are to be required to have AML measures in general, thecase is undeniable that they should optimize the benefits by using themto combat corruption, especially corruption at a high level. This wouldrequire not only better liaison with anticorruption bodies within theirown jurisdictions, but also with financial crime investigators and intelligenceunits abroad, perhaps in parallel or in tandem. Namibia andNigeria excepted, there do not appear to be any cases in which internalAML reporting in developing countries has led to major cases againstin-favor PEPs, but this does not rule out the utility of SARs against outof-favorPEPs or in accumulating evidence of assets directly or beneficiallyowned by national or international PEPs. In one middle-incomenon-OECD country, corruption and fraud-related SARs triggered the