International Monetary Fund, IMF, has said that cross-border financial crime is here to stay. In a Blog post it said said that while people everywhere enjoy the convenience of a globally connected financial system, criminals exploit this intricate network to move illicit funds across borders and evade capture. As these criminals protect their ill-gotten wealth derived from tax evasion, corruption, and drug trafficking, among others, financial crimes thrive. No financial institution or country is immune. Money laundering scandals caused bank collapses and shocked countries. Ultimately, society pays the cost through an erosion of trust in the integrity of the financial system, often leading taxpayers to subsidise failing banks and limiting customer access to credit. Banks, as gatekeepers to the financial system, battle unceasingly against money laundering and terrorist financing. But national anti-money laundering efforts focus primarily on domestic risks, and as a result they often lag. Bank regulators also play a crucial role, but often don’t make the best use of limited resources, and divergent approaches hamper effective global collaboration.
It said “IMF staff partnered with eight Nordic and Baltic countries—Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden—in a first-of-its-kind anti-money laundering technical assistance project. Our findings reveal that combatting money laundering is beyond the capacity of any single nation—and that countries must innovate together to find a solution. IMF staff is constantly expanding the toolkit to help Fund members focus on cross-border illicit flows.
“Using machine learning technologies and data analysis, we scrutinise financial movements, gaining insights into the global landscape and identifying indicators of potential macro-critical money laundering scenarios. Our analysis features in the annual health checks of IMF member economies (e.g., Singapore 2022 Article IV consultation and under the Financial Sector Assessment programme eg, UK 2022 FASP).Collaborating with the Nordic-Baltic countries, we used these tools to improve countries’ understanding of unusual financial flows warranting scrutiny. These tools enhance countries’ ability to screen potential illicit financial flows and focus on emerging threats. Collaboration also allows countries to identify and connect seemingly disconnected cross-border money laundering and terrorism financing threats”.
