Money Laundering Blacklists / Michele Riccardi

It includes Appendix, References and Index pages

What are the criteria used by Financial Action Task Force (FATF) and the European Union to blacklist jurisdictions at high-risk of money laundering? What are the countries at highest risk according to Panama Papers and FinCEN files? Where do criminals move their illicit money, according to judicial and investigative evidence? This book answers these questions. It is an unprecedented study on the countries at highest risk of attracting money laundering and organised crime proceeds – and how they are identified as such by scholars, policy-makers and anti-money laundering (AML) practitioners. It targets an issue which is central to the policy debate, in the media, but is under-studied.

This book is divided into two parts. Part I discusses the concept of money laundering risk, its main determinants, and carries out a review of extant country ratings, ranging from official blacklists and grey lists, to media leaks and scholarly papers. Part II discusses the weaknesses and the myths behind the current ratings and proposes a new approach to assess the risk of money laundering across countries.

With a critical research perspective, empirically driven, this book aims to satisfy both scholars and students – in particular from criminology, economics, and international relations – and practitioners from banks, professional firms, and AML authorities.

Table of Contents

List of figures

List of tables

Acknowledgments

List of abbreviations

Introduction

PART I: Money laundering risk measures

Money laundering risk and determinants

Money laundering (and illicit financial flows)

Money laundering risk

Determinants of money laundering risk across countries: proximity, opacity, and security

Available measures of money laundering risk

Money laundering blacklists and grey lists

Origin and scope of anti-money laundering blacklists

The FATF blacklist and grey list

The US INCSR list

The European Union anti-money laundering blacklist

Blacklists and sanctions

Other lists of high-risk countries

Lists based on judicial investigations

Lists based on media investigations: from Panama Papers to FinCEN files

Lists based on financial/corporate data analyses

Lists based on crime data analyses

Composite indicators

Lists developed by banks and other obliged entities

Relations and underlying components of existing risk ratings

Summary: the gaps in existing risk ratings and blacklists

PART II: A New measurement approach

A new approach to identify countries at high-risk of money laundering

Rationale

Methodology and operationalisation

A practical application: money laundering risk from the perspective of Italy

Discussion and policy implications

Discussion

Policy implications

Limitations and future research directions

Appendix

References

Index