Combating Money Laundering and Terrorist Financing

A Model of Best Practice for the Financial Sector, the Professions and Other Designated Businesses

Money laundering is a worldwide problem. It involves hundreds of billions of dollars that are laundered through the international financial institutions. With increasing globalisation and liberalisation of financial systems, countries are becoming more vulnerable to the risks of money laundering and its contagious effects. The work of the Financial Action Task Force (FATF) in formulating global policies to combat money laundering has been addressing the changes in the methods and techniques used by money launderers as they respond to evolving counter measures. The original FATF’s 40 Recommendations were drawn up in 1990. Following the terrorist attacks on the United States of 11 September 2001, the FATF issued a further 9 “Special Recommendations” to combat terrorist financing. A comprehensive review of the Recommendations was completed in June 2003. These recommendations have been endorsed by the Commonwealth for implementation.

The Commonwealth has been in the forefront of international efforts to combat money laundering and terrorist financing, particularly through supporting its developing member countries to implement comprehensive AntiMoney Laundering (AML) and Combating Financing of Terrorism (CFT) systems that comply with global standards. It published A Model of Best Practice for Combating Money Laundering in the Financial Sector in 2000.

This is a revision of the 2000 publication. It incorporates the new international standard arising from the revised FATF 40 Recommendations and the Special 9 Recommendations.

It is expected that the manual will be helpful for policymakers, regulators, financial institutions, the professions and other designated businesses in their efforts to develop viable AML/CFT systems. The publication is divided into three main parts: the first deals with global issues, strategies and standards; the second with national issues and in particular, national strategy formulation; and the third with financial and professional sector procedures.