Financial Crime World

Maldives Eyes Financial Inclusion Amidst Anti-Money Laundering Efforts

The Maldives government is facing a delicate balance between promoting financial inclusion and combating money laundering in its financial system. As the country works to develop its financial regulatory framework, it must navigate this complex issue to ensure that legitimate businesses and consumers can access financial services without compromising anti-money laundering efforts.

A Delicate Balance

The Maldives’ efforts to regulate financial services must not come at the expense of excluding financially excluded groups, including low-income and rural communities. Industry experts warn that a one-size-fits-all approach to combating money laundering could hinder access to well-regulated financial services for these populations.

Key Challenges

  • Balancing financial inclusion with anti-money laundering efforts
  • Ensuring that AML/CFT controls do not exclude legitimate businesses and consumers

FATF Guidance on Financial Inclusion

The Financial Action Task Force (FATF) has published a guidance paper aimed at helping countries like the Maldives design Anti-Money Laundering and Terrorist Financing (AML/CFT) measures that promote financial inclusion. The document, updated in February 2013, reflects changes made to the FATF Recommendations in 2012.

Key Principles

  • Risk-based approach: AML/CFT systems should be based on a risk-based approach (RBA), which is key to developing frameworks that are both effective in combating crime and inclusive of underserved populations.
  • Promoting financial inclusion: AML/CFT controls should not hinder access to well-regulated financial services for financially excluded groups.

International Partnerships

The Maldives government has been working closely with international partners, including the World Bank and the International Monetary Fund (IMF), to develop its financial regulatory framework. These partnerships will be crucial in determining the country’s success in achieving its goals of promoting financial inclusion and combating money laundering.

Key Benefits

  • Risk-sensitive AML/CFT frameworks: The development of risk-sensitive AML/CFT frameworks will be a key step for countries like the Maldives in building more inclusive formal financial systems.
  • Access to financial services: Giving access to appropriate financial services to a larger proportion of the population will help promote economic growth and reduce poverty.