FATF has published a report on the links between corruption and money laundering. The goal of the study behind the report was to better understand corruption, its mechanisms and vulnerabilities from an AML/CFT point of view. It identifies key vulnerabilities within the current AML/CFT framework, including:

  • PEPS, particularly in autocratic regimes, may have sufficient control over a state's judiciary, police, military, media and regulators to allow money to be embezzled, and to launder the money with impunity.
  • Financial institutions may be compromised by criminal elements.
  • Ineffective enhanced due diligence for PEPs.
  • Ineffective communication between states and financial institutions.
  • FATF notes that the report will serve as a catalyst for future work in developing guidance or best practices on AML and CFT measures relevant to combating corruption.

According to FATF, the report will serve as a catalyst for future FATF work in developing guidance or best practice on AML/CFT measures to combat corruption. (Source: Study: Laundering the Proceeds of Corruption)