Money laundering : issues in prevention and enforcement measures in the industrialised world, and in small and emerging states

Abstract

Money laundering legislation has introduced new challenges to the nature of law enforcement worldwide. It has also involved the banking and financial sectors by placing obligations concerning the monitoring of fund transfers and the reporting of suspicious asset movements. The aim is to deny criminals the fruit of crime by detecting and confiscating illicit proceeds. Although the ultimate objective of anti-money laundering efforts is to reduce criminal activity, the effectiveness of these countermeasures remains largely unknown. The success of international efforts in the prevention of money laundering also hinges on global co-operation and homogenisation of legislation. Various financial havens, mostly small and emerging states, are visibly offering a variety of services conducive to money laundering. Other states lack the human and technical resources required to co-operate effectively. There are also a number of implications to be considered, first amongst which are the social and economic consequences of anti-money laundering measures. This paper seeks to explore these issues by identifying world trends and countermeasures, with specific emphasis on Malta's experience during its initial years of implementation. It also analyses antilaundering policy and gives broad recommendations, based on three identified approaches. It also outlines recommendations aimed towards Malta's current and future needs.