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Financial intermediaries – Anti-money laundering allies in cash-based societies?

Many informal cash-based economies run parallel financial systems that are very different to the Western banking concept. Such countries are perceived to have a high risk of money laundering. Looking at Afghanistan, Somalia, and India – where anti-money laundering efforts have yielded mixed results – this paper draws lessons from the operations of financial intermediaries. These countries are considered high risk not only for money laundering and terrorism financing, but also for corruption and political and legal concerns. The issues at hand – risk assessments for remittances, strategies of engaging on the ground, resource management, and alternatives to the existing financial networks – are also valid for other cash-based, low-income societies. In fact, informal remittance channels may provide opportunities to strengthen regulatory and governance capacities.

20 April 2015
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Passas, N.; (2015) Financial intermediaries – Anti-money laundering allies in cash-based societies?. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Issue 2015:10)

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Nikos Passas

Disclaimer


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


anti-money laundering, terrorism, financial industry, informal sector, Somalia, financial industry, India, Afghanistan, illicit financial flows