Financial Crime World

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Dominica: Financial Crimes and Terrorism Funding Threaten Economic Stability

In a world where financial transactions are increasingly interconnected, money laundering and terrorist financing have become major concerns for Dominica’s economic stability. The island nation’s financial sector is at risk of being destabilized by “hot money” resulting from inflows and outflows, banking crises, ineffective revenue collection, broader governance weaknesses, reputational risks for international financial centers, and loss of correspondent banking relationships.

For the past 20 years, the International Monetary Fund (IMF) has been working to shape anti-money laundering and combating the financing of terrorism (AML/CFT) policies globally. The organization’s AML/CFT strategy is guided by its Executive Board on a five-year policy review cycle. In November 2023, the IMF endorsed an enhanced focus on the macroeconomic impacts of money laundering, related financial crime, and terrorism financing.

Macroeconomic Impact of Illicit Financial Flows

Illicit financial flows have a significant adverse effect on the macroeconomies of countries where they originate, transit, or are integrated. The IMF has been working to estimate and address cross-border illicit financial flows and discusses potential solutions that can be advanced to mitigate these flows.

2023 Review of the AML/CFT Strategy

The 2023 review of the AML/CFT strategy will guide the IMF’s work on this issue for the next five years. The review found that the current principles of engagement are broadly appropriate, but an enhanced focus is needed on the macroeconomic impacts of money laundering and related financial crime.

Curbing Financial Crime Requires Better Understanding

Policymakers need a fuller understanding of the consequences of illicit flows, including tallies of fiscal, monetary, financial, and structural costs. The fight against financial crime is not lost, but more needs to be done to win. The IMF recently reviewed its strategy for anti-money laundering and combating the financing of terrorism.

Public Consultation on AML/CFT Work

The IMF launched a survey for civil society organizations around the world to share their views on how the organization can further enhance engagement on AML/CFT and broader financial integrity issues. Civil society organizations expressed favorable views on the IMF’s AML/CFT work and highlighted the need for increased focus on illicit financial flows and their impacts.

What is ML/TF/PF?

Money laundering, terrorism financing, and proliferation of weapons of mass destruction (WMD) financing are three related but distinct concepts. While they differ in many ways, they often exploit the same vulnerabilities in financial systems and the broader economy that allow for anonymity and opacity in transactions.

The IMF has been working to shape policies globally to combat these financial crimes, including money laundering, terrorism financing, and proliferation of WMD financing. The organization’s AML/CFT strategy is guided by its Executive Board on a five-year policy review cycle.

Publications

  • [List of publications related to AML/CFT and broader financial integrity issues]

Blogs

  • [List of blog posts discussing the importance of AML/CFT and broader financial integrity issues]

AML/CFT Assessments

The IMF conducts regular assessments of countries’ AML/CFT systems and controls to ensure that they are effective in combating these financial crimes.

Videos and Events

The IMF hosts several events and webinars on AML/CFT and broader financial integrity issues, featuring experts from around the world.