Legalization of Anti-Money Laundering

Abstract

This first case study of self-regulatory impact on international legalization deals with international rules aimed at countering money laundering that began to emerge in the late 1980s when AML was primarily seen as a tool in the international but US-led fight against drugs Qakobi 2010b). Money laundering was first tackled internationally in the UN Convention against Drugs of 1988. The AML regime, therefore, has its origin in criminal law provisions, the primary aim of the convention being to have the act of money laundering criminalized as on offence under national criminal laws. This has come to be referred to as the enforcement or criminalization approach to AML. Since its inception, the AML regime has evolved and broadened. Today, the Financial Action Task Force (FATF), established in 1989 by the G7 constitutes its institutional core and FATF’s Forty Recommendations on money laundering, first adopted in 1990, can be considered the dominant global AML standard. They integrated the enforcement and the prevention or regulation approach to AML that focuses on the role of banks in preventing the crime. Hence, the Forty Recommendations contain rules addressed to state actors as well as to non-state actors, in particular banks.