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Publications: Financial Market Integrity

    
    

The Financial Market Integrity Group has written or contributed to many publications on Anti-Money Laundering and Combating Financial Terrorism (AML/CFT), covering topics that address the interests of client countries, academic institutions and other development agencies. Before downloading any of the publications below, please read the End-Users Agreement.

 

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Pirate Trails: Tracking the Illicit Financial Flows from Piracy off the Horn of Africa

This study by the International Criminal Police Organization, United Nations Office on Drugs and Crime and World Bank attempts to understand the illicit financial flows from pirate activities off the Horn of Africa. The study focused on: Djibouti, Ethiopia, Kenya, Seychelles, and Somalia.  The study (i) analyzes how much money is collected in ransom payments;  (ii)  how and to whom this money - the proceeds of piracy - are distributed; (iii) how these proceeds may be invested.

  
Illegal logging

Justice for Forests: Improving Criminal Justice Efforts to Combat Illegal Logging 

The World Bank estimates that illegal logging in some countries accounts for as much as 90 percent of all logging and generates approximately US$10–15 billion annually in criminal proceeds. The report shows how countries can effectively fight illegal logging through the criminal justice system, and trace and confiscate illegal logging profits. It could be done by looking past low-level criminals and tracing the profits from illegal logging. By following the money trail, and using tools developed in more than 170 countries to go after ‘dirty money,’ criminal justice can pursue criminal organizations engaged in large-scale illegal logging and confiscate any ill-gotten gains.

  
Alternative  Remittance Systems in Kazakhstan

This study on alternative remittance systems (ARSs) was written in response to a request for technical assistance from the Government of Kazakhstan under the Joint Economic Research Program (JERP). The Kazakhstan-World Bank JERP is at the core of the Country Partnership Strategy.  This report elaborates on the findings of the ARS study and suggests policy recommendations that will improve integrity of the remittance market while facilitating financial access and promoting the use of formal remittance channels.

This report is also available in Russian.

 
Using Asset Disclosure for Identifying Politically Exposed PersonsUsing Asset Disclosure for Identifying Politically Exposed Persons

Aiming to promote greater transparency and accountability, numerous countries have introduced the requirement for public officials to file asset disclosures. In parallel, efforts to curb money laundering and the plunder of state assets have resulted in greater scrutiny of financial relationships with politically exposed persons (PEPs). The fight against corruption has led to the introduction of a series of innovative approaches; however, their implementation is never free of challenges and complementarities and potential synergies are still to be explored.This paper analyzes how the information on asset disclosure could be used to support the identification of PEPs and provides a series of recommendations that can help support this use.

  
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Ill-Gotten Money and the Economy, Experiences from Malawi and Namibia 

This study reveals the magnitude of "dirty" and corrupt money and shows how the recycling of ill-gotten money and other related underlying criminal acts negatively affect economic development and poverty reduction. The high economic cost of criminal activities such as corruption, tax evasion and its related “dirty money” flows reinforces the need for developing country policy makers and practitioners to act effectively –and early- to curb such activities.The study also confirms that well-designed anti-money laundering measures such as the use of financial intelligence can be useful tools in combating corruption, tax evasion and other financial crimes.

Full Report in PDF            
 Read on-line (Adobe Flash required)
Annexes                             
Press Release        Fact Sheet           

  
Barriers 2Barriers to Asset Recovery, 2011

Despite international commitments, significant barriers remain in the process of recovering the proceeds of corruption from foreign jurisdictions. This volume identifies and analyzes the impact of these obstacles and proposes recommendations for overcoming them.   Drawing on the experience of practitioners with hands-on experience, the Stolen Asset Recovery (StAR) Initiative launched this study to identify the barriers to stolen asset recovery internationally, provide brief analysis of the impact of these barriers, and propose recommendations for overcoming these obstacles. This volume is intended to guide policy makers in their efforts to ensure necessary resources and the development of a plan, policy or strategy aimed at eradicating the barriers to asset recovery. In addition, this study proposes actions to be taken by the G20, international organizations, financial institutions, developmental agencies and civil society.

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 AssetRecoveryHandbookAsset Recovery Handbook, 2011

Developing countries lose an estimated US$20-40 billion each year through bribery, misappropriation of funds, and other corrupt practices. Much of the proceeds of this corruption find ‘safe haven’ in the world’s financial centers. These criminal flows are a drain on social services and economic development programs, contributing to the impoverishment of the world’s poorest countries. Many developing countries have already sought to recover stolen assets. A number of successful high-profile cases with creative international cooperation have demonstrated that asset recovery is possible.

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mobile money

Protecting Mobile Money against Financial Crimes: Global Policy Challenges and Solutions, 2011 

Mobile Money is a booming industry in an increasing number of countries worldwide.  Specific  anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations related to mobile money have not been issued in many jurisdictions, mainly due to the lack of awareness of the risks these services can pose if the right controls are not in place.Because the international standards for AML/CFT, the Financial Action Task Force’s 40 + 9 Recommendations were designed and issued well before mobile money technology and business models became prevalent, even developed countries have begun to face challenges with their regulation. The project team aims to provide practical guidance to jurisdictions and the Industry on how to draft regulations and internal guidelines that allow them to comply with AML/CFT standards with enough flexibility for mobile money to thrive. Specifically, the paper (1) takes stock of new AML/CFT regulations and practices relevant to Mobile money, (2) design guidelines for drafting AML/CFT regulations that cover mobile money and (3) propose examples of best practices for the Industry to include AML/CFT in their own business model.

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NPOsNonprofit Organizations and the Combating of Terrorism Financing: A Proportionate Response, 2010

One of the ways that terrorist organizations raise and transfer funds is by using the fundraising power and the aura of charitable activity, of nonprofit organizations (NPOs). Countries have struggled to find a proper way to address the potential terrorism financing risk posed by NPOs. The issue at stake is to strike a balance between addressing a potential threat and ensuring NPOs have the freedom to operate. This article argues that, when discussing the threat and how to address it, policymakers need to be specific and not paint the whole sector with the same brush. The ultimate objective is to enhance the transparency of the sector—to ensure information is available on the people in charge of NPOs, their sources of funds, and, particularly, the way those funds are spent. This aim serves a much wider purpose than just terrorism financing and touches on many aspects of good governance of civil society that the sector itself and others have been debating for a long time. 

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Uganda CorridorUganda’s Remittance Corridors from United Kingdom, United States, and South Africa: Challenges to Linking Remittances to the Use of Formal Services, 2010

This report analyzes and compares three bilateral remittance corridors. The comparison highlights similarities and differences and the significance of the remittance-sending countries to Uganda in terms of volume, corridor formality, risks, and vulnerability to money laundering. It also describes Uganda as a remittance-receiving country and outlines the remittance flows, market players, distribution network, access and usage of remittance, regulatory framework, and measures taken toward anti–money laundering and combating financing of terrorism (AML/CFT). The issues and challenges faced by Uganda are identified, and policy recommendations are made for both Uganda and remittance-sending countries.

More BRCA Publications

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The United States-Honduras Remittance Corridor: Acting on Opportunity to Increase Financial Inclusion and Foster Development of a Transitional Economy, 2010

This report analyzes the U.S.-Honduras remittance corridor and builds on lessons learned from international experiences on remittances. This report describes the remittance regulatory and market environment, financial inclusion strategies by financial institutions, transnational economic activities, and the impacts of remittances on the Honduran economy. It also highlights critical policy recommendations for authorities to improve the integrity of the remittance flows; expand access to financial services; and create an environment where Honduran migrants in the United States can invest in their community and link diaspora groups and home communities.  Also available in Spanish.

More BRCA Publications

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New Technologies, New Risks? Innovation and Countering the Financing of Terrorism, 2009

International standards and best practices on the fight against money laundering and terrorism financing have been developed over the past two decades. A review of the implementation and effectiveness of the standards on terrorism financing has recently been conducted under the aegis of the United Nations, with the World Bank playing a leading role. A recently published report, Tackling the Financing of Terrorism, by the UN Counter-Terrorism Implementation Task Force, made nearly a hundred recommendations on an array of terrorist financing issues, including new technologies, nonprofit organizations, informal remittance providers and international cooperation.

Recent developments in the way financial services are delivered have provided both opportunities for economic development and prompted fears of their attractiveness for crimes such as terrorist financing. This paper explores four innovations—value cards, mobile financial services, online banking/payments, and digital currencies—outlining how they work, analyzing their risks, and identifying some ways in which governments and providers are attempting to reduce their attractiveness to financiers of terrorism. Determining what the actual risks are is critical to ensuring that laws and regulations balance the need to protect integrity in the market and to create an environment friendly to business and empowering to the poor.

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Stolen Asset Recovery: Politically Exposed Persons, A Policy Paper on Strengthening Preventive Measures, 2010

Over the past twenty-five years, the whole world has learned about the gross abuses of corrupt "politically exposed persons" (PEPs), and through outrageous examples, the way in which they plunder state assets, extort and accept bribes, and use domestic and international financial systems to launder their stolen assets. This StAR paper offers a series of Recommendations and Good Practices designed to help increase the quality and effectiveness of PEP measures adopted by regulatory authorities and banks. In addition, the paper provides Recommendations that we hope the standard setters will consider. This paper identifies three key actions necessary to make a genuine difference: 1. strong and sustained political will and mobilization; 2. clarification and harmonization of the international requirements on PEPs; and 3. stock-taking of the emerging typologies, focused on lifting what impedes the identification of beneficial owners who are PEPs.

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Alternative Remittance Systems and Terrorism Financing: Issues in Risk Management, 2009

International standards and best practices on the fight against money laundering and terrorism financing have been developed over the past two decades. A review of the implementation and effectiveness of the standards on terrorism financing has recently been conducted under the aegis of the United Nations, with the World Bank playing a leading role. A recently published report, Tackling the Financing of Terrorism, by the UN Counter-Terrorism Implementation Task Force, made nearly a hundred recommendations on an array of terrorist financing issues, including new technologies, nonprofit organizations, informal remittance providers, and international cooperation.

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Combating Money Laundering and the Financing of Terrorism: A Comprehensive Training Guide

 

Developed to support the World Bank’s Capacity Enhancement Program on AML/CFT. The program offers countries the tools, skills and knowledge to build and strengthen their institutional, legal and regulatory frameworks for developing a robust AML/CFT regime. The guide is comprised of the following eight Modules:

1. Effects on Economic Development & International Standards
2. Legal Requirements to meet International Standards
3a. Regulatory and Institutional Requirements
3b. Compliance Requirements for Financial Institutions
4. Building an Effective Financial Intelligence Unit
5. Domestic (inter-agency) and International Cooperation
6. Combating the Financing of Terrorism
7. Investigating Money Laundering and Terrorist Financing

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Preventing Money Laundering and Terrorist Financing: A Practical Guide for Bank Supervisors, 2009 

 

This guide presents key elements for an effective AML/CFT on-site and offsite supervisory system and proposes appropriate tools and methodologies. It is important to note that the examples given represent practices the authors believe can provide useful guidance to bank supervisors. They should not be regarded as definitive models, nor should it be inferred that the countries from which they are drawn are fully compliant with all applicable AML/CFT standards.

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BRCA C-JThe Canada-Caribbean Remittance Corridor: Fostering Formal Remittances to Haiti and Jamaica through Effective Regulation, 2009 

This study undertakes an analysis of the various dynamics
underlying the Canada-Caribbean remittance corridor, including Caribbean migration issues and diaspora dynamics, remittance market landscapes, and regulatory frameworks. The study is intended to assist Canadian and Caribbean national authorities to sustain the continued growth and competitiveness of their remittance industries, while protecting them from being abused by criminals.

More BRCA Publications

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StAR Book

Stolen Asset Recovery: Guide on Non-Conviction Based (NCB) Asset Forfeiture 

NCB asset forfeiture is a legal regime that provides for the seizure and forfeiture of the proceeds of serious crime, including corruption, without the need for a criminal conviction. NCB is often the only option that governments can use when the corrupt official or the person paying the bribe is dead, has fled the jurisdiction, is immune from prosecution, or is too powerful to prosecute - all common in cases of grand corruption.

This publication is also available in other languages:

Español   Pусский

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E-mobile

Mobile Phone Financial Services Paper, 2008 

This working paper explores strategies to identify and manage potential money laundering (ML) and terrorist financing (TF) risks in mobile financial services. Using fieldwork in seven economies as a basis, the paper provides guidance on the best means of assessing perceived versus actual ML and TF risks, then identifies specific measures to mitigate the actual risks. The paper concludes with recommendations that aim to promote a regulatory balance to foster an enabling environment for business while minimizing ML and TF risks that hinder its sustainability. A second edition with updated business models and regulatory best practices will be published in late 2009.

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Counter Terrorism Implementation Task Force Report, 2009  

The World Bank co-leads the United Nations Working Group on Tackling the Financing of Terrorism with the IMF and the UN Office on Drugs and Crime. We are supported by INTERPOL, the Al-Qaida/Taliban Monitoring Team and the Counter-Terrorism Committee. The group has made a report with a series of concrete findings and recommendations on methods of terrorist financing, existing mitigation measures and recommendations to policymakers and standard setters moving forward. The report was announced UN General Assembly in March 2009.

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Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism

The Second Edition of the Reference Guide is intended to serve as a single, comprehensive source of information for countries that wish to establish or improve their legal and institutional frameworks for anti-money laundering (AML) and combating the financing of terrorism (CFT).

The publication is available in different languages:
English  Français  Español  Arabic Korean 

Português  Pусский Russian   Vietnamese   中文 Chinese 

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amlcf-regulationAML/CFT Regulation: Implications for Financial Service Providers that Serve Low-income People, 2005

 

Across the world, new AML/CFT measures are being introduced and existing measures tightened. All financial service providers, including those working with low-income communities, are—or will—be affected by these measures.  This paper summarizes the implications of the international framework, particularly for financial service providers working with low-income people.

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Financial Intelligence Units: An Overview, 2004

 

This handbook covers topics related to Financial Intelligence Units (FIUs), beginning with the key steps necessary for establishing them and the various forms they can be given in a government structure.  The handbook offers many examples of existing FIU settings and arrangements, in order to provide policymakers and legislators with the widest possible palette of country experiences. and to help them design FIUs that best serve the purposes of their own jurisdictions.

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Strengthening the Collaborative Process for Building an Effective Anti-Money Laundering and Counter-Terrorism Financing Regime in Afghanistan, 2004

 

The Global Dialogue Series on AML/CFT was designed to foster discussion and exchanges of views among the staff from the Group as well as representatives of client countries, the International Monetary Fund (IMF), regional bodies emulating the international Financial Action Task Force, regional development banks, and other international organizations. The resulting information focuses on the challenges faced in the struggle against illicit money flows, the lessons of successes, and the types of assistance countries need to manage effective AM/CFT programs..

 

This paper summarizes the dialogue held in June 2004 for Afghanistan, which brought together representatives from the World Bank, IMF and regulatory and financial sector representatives, to exchange experience and information regarding Afghanistan’s recent AML/CFT experience and the challenges associated with developing and implementing an AML/CFT strategy for the country.

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Effective Regimes to Combat Money Laundering and the Financing of Terrorism, Strengthening the Collaborative Process: Lessons Learned, 2004 

This set of best practices is intended to accomplish three things. First, it helps jurisdictions develop and implement domestic systems that are compatible with international AML/CFT standards. Second, it serves as a benchmark when countries develop internal consultative processes. Finally, it guides the efforts of the public and private sectors to build stronger AML/CFT regimes.

 

The authors point out that, although these elements are essential in strengthening an AML/CFT regime, they are not sufficient by themselves. Each jurisdiction’s culture and economy, as well as legal and law enforcement traditions, must also be considered.

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The World Bank in the Global Fight Against Money Laundering and Terrorist Financing, 2003

 

This brochure defines the effects of money laundering and terrorism financing, solutions to fight it, and the World Bank’s role in the global AML/CFT effort.

 

 

 





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