Table of Contents

  • Money laundering is a worldwide problem. It involves hundreds of billions of dollars that are laundered through international financial institutions. With increasing global isation and liberalisation of financial systems, countries are becoming more vulner able to the risks of money laundering and its contagious effects. The sheer scale of money laundering and the damage it causes warrant a strategic global approach. The work of the Financial Action Task Force (FATF) in formulating global policies to combat money laundering over the last 15 years has addressed the changing methods and techniques used by money launderers as they respond to evolving counter-measures. The FATF’s original 40 Recommendations were drawn up in 1990 to combat the misuse of financial systems by persons seeking to launder dirty money, usually the proceeds of the narcotics trade and other criminal activities. In 1996, the Recommendations were revised for the first time to reflect evolving money laundering typologies. Following the terrorist attacks on the United States of 11 September 2001, the FATF issued a further nine Special Recommendations to combat terrorist financing, which sometimes involved the use of funds from legitimate sources for this illegitimate activity.

  • The first edition of Combating Money Laundering and Terrorist Financing, published in 2005, has been warmly received by Commonwealth governments and professionals working on this problem, both in the Commonwealth and further afield. This second edition includes a number of minor corrections to the text throughout, and a new section on understanding how terrorism is financed. We hope that it will continue to be useful both to policy-makers developing legislation and regulations in this area, and to professionals working to ensure that they follow good practice.