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Venmo was simply trying to comply with current anti-money laundering policies—the matter was quickly resolved and Robin will soon be able to enjoy the Cuba Caribe dance show.
But for many people in poor countries, the unintended consequences of anti-money laundering policies are no laughing matter. In a recent CGD working group report, we highlight several groups who are suffering the consequences of rich countries’ AML/CFT policies. These include recipients of migrants’ remittances, banks that need a correspondent relationship with a bank in a rich country to process cross-border transactions, and non governmental organizations that are trying to deliver services to war-torn and fragile countries. These groups have seen financial services terminated, become more expensive, or simply less transparent as transactions have been pushed underground. Our report makes five recommendations that may help to address these unintended consequences while preserving the security of rich and poor countries alike.
We can’t say whether the Cuba Caribe dance show was worth the $26.50 Robin paid for the ticket, but we are pretty sure our report recommendations will help developing countries get the best out of the money sent back in remittances.
Last November, a CGD working group of experts convened to address the unintended consequences of anti-money laundering (AML) policies for poor countries, where they recommended that the Financial Stability Board (FSB) should take the lead on addressing problematic de-risking by banks. Below, we outline our takeaways on the FSB’s progress thus far.
A recent flurry of legislative activity has seen the introduction of four bills that aim to crack down on the financing of terrorism. While it is very important to combat money laundering and the financing of terror, the actions can result in unintended negative consequences for poor countries as well. We like some things in these new bills, but they also leave a lot to be desired.
Last November, we released a report on the unintended consequences of anti-money laundering policies for poor countries that focused on remittances, corresponding banking, and the delivery of humanitarian aid. Today, we are pleased to report progress towards reducing the negative, unintended consequences of anti-money laundering (AML) regulation, despite the shadow cast on the international development community by Brexit. One significant policy change from the Financial Action Task Force (FATF) and three new reports give us reasons to celebrate a little, even when there is much work to be done.
It’s been three weeks since the UK voted to leave the European Union in the move popularly known as Brexit, and the consequences are still becoming apparent. Senior fellow and director of CGD Europe Owen Barder joins the podcast from London this week to take a balanced look at possibilities for the UK’s future, and consider implications for the country and the developing world.