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Dirty Money: Can Money Laundering and the Financing of Terrorism be Effectively Regulated?

Presented at the 2013 ABA Annual Meeting in San Francisco, California on August 10th, 2013.

Research presentation by ABF Research Professor Terrence Halliday.  The program was moderated by

From left to right: Kevin L. Shepherd, Richard Messick, David K.Y. Tang, Terence Halliday, and Michael Lintern-Smith

David K.Y. Tang, Managing Partner at K & L Gates, Seattle, Washington.  The panelists members included: Michael Lintern-Smith, Senior Partner at Robertson Solictors in Hong Kong; Richard Messick, Consultant at Messick Group; and Kevin L. Shepherd, Partner at Venable LLP in Baltimore, Maryland, and Maryland Fellows State Co-Chair.

Dirty money gets produced by organized crime and drug trafficking, prostitution and tax evasion, corruption and financial crime, among many sources.  A global regulatory system seeks to monitor and suppress money laundering and the financing of terrorism. Spearheaded by the Financial Action Task Force (FATF), a multilateral body based in Paris, global standards against money laundering were revised in 2012/2013 to cover the financial systems of all countries.  FATF, the IMF and World Bank, and regional assessment bodies review the progress countries make towards conformity with the standards. But does all this effort make any difference?

This panel reported on an assessment undertaken by the Center of Law and Globalization, ABF, in cooperation with the IMF, to evaluate how the IMF has performed as the largest assessment body and what challenges regulation and monitoring of anti-money laundering and the financing of terrorism pose for national and international regulators, financial institutions, and illegal markets and producers of dirty money.

The Center/ABF assessment team had access to IMF staff and classified materials, as well as to officials and classified materials in four countries—Armenia, Germany, Mauritius and Netherlands.

Although the Center Report will not be released until September 2013, ABF Research Professor Terence Halliday, who is Co-Director of the Center on Law and Globalization, and team leader for the IMF assessment,  opened up a discussion on:

  • the challenges of financial regulation of dirty money
  • the fundamental questions his team raised with assessors
  • the promise of the 2012 Standards and 2013 Methodology
  • the possible consequences for various stakeholders, including states, ministries of finance, financial institutions, lawyers, other professions and non-profits banks versus criminals, money-launderers, and potential terrorists.  

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