Global uniformity is central to the strategy to prevent money laundering and suppress the financing of terrorism. In the early 1990s, the Financial Access Task Force formulated 40 recommendations for the control of money laundering to guide countries in the drafting of appropriate laws, known as the Forty Recommendations. In 2001 the Forty Recommendations were supplemented with a set of Special Recommendations on Terrorist Financing. Both these sets of recommendations are now used by the international community as yardsticks to measure the efficacy of a country’s laws and procedures against money laundering and financing of terrorism.
There is the possibility that inappropriate anti-money laundering (AML) and combating the financing of terrorism (CFT) standards may exclude the financially vulnerable and marginalized citizens of such countries from the formal financial system. Of particular concern is the potential impact on mobile and other non face-to-face distribution models and cross-border transfers. Recognising the potential negative effects on inclusion, FinMark Trust embarks on a number of initiatives to safeguard inclusion while supporting compliance with international standards. FinMark Trust also supported the development of an AML/CFT annex to SADC’s Finance and Investment Protocol, which recognized the potential impact on financial inclusion and included checks to limit this.
A number of challenges to inclusion remain as countries implement their AML/CFT frameworks and FinMark Trust will focus on the impact of AML/CFT on cross-border transfers.