draining development.pdf - Khazar University

How Well Do Anti–Money Laundering Controls Work in Developing Countries? 407prosecution of senior in-favor politicians even though, as national figures,they were not formally classified as PEPs. 36 However, this is a jurisdictionin which confidence in the independence of the FIU and theprosecutorial process is high.More generally, what is required is to work out the details of how theidentification, reporting, investigation, and intervention processes mightproduce fewer false positives and false negatives and of how the launderingindicators of corruption differ from or resemble those for otheroffenses. In short, as the example of the Nigerian Economic and FinancialCrimes Commission demonstrated (before changes were implementedamong key personnel), a vigorous developing-country FIU,combined with an independent investigative and prosecutorial body, canreceive SARs from and transmit SARs to foreign countries and use theseto investigate corrupt senior figures at home and abroad (Ribadu 2010).However, such examples are rare, especially in the long term, and theimpact of AML within developing countries in controlling grand corruptionremains limited. The policy implications of this merit furtherreflection, and, although there are welcome signs that the internationalcommunity appreciates the need for risk-based resource allocation inpoor countries, the transformation of this into AML evaluations requiresmore subtlety than has been evident to date (de Koker 2009).Notes1. “Malawi is not and does not aspire to be an international financial center, norhas it been associated with money laundering or the financing of terrorism.Speaking at an international financial summit in September 2006, the Ministerof Economics and Planning recounted how his country had come to adopt thestandard package of AML regulations. The Minister was told that Malawi neededan AML policy. The Minister replied that Malawi did not have a problem withmoney laundering, but was informed that this did not matter. When the Ministerasked if the package could be adapted for local conditions he was told no,because then Malawi would not meet international standards in this area. TheMinister was further informed that a failure to meet international AML standardswould make it harder for individuals and firms in Malawi to transact withthe outside world relative to its neighbors, and thus less likely to attract foreigninvestment. The Minister concluded: ‘We did as we were told’; the countryadopted the standard package of AML policies.” (Sharman 2008, 651)