Overview international best practices on customer due diligence and related anti-money laundering measures

• Published in: Journal of money laundering control Vol. 26; no. 7; pp. 53 - 62
• Main Authors: Chitimira, Howard, Munedzi, Sharon
• Format: Journal Article
• Language: English
• Published: London Emerald Publishing Limited 18-12-2023; Emerald Group Publishing Limited
• Subjects: Banking industry; Banks; Best practice; Crime; Due diligence; Industrialized nations; International banking; International finance; Investigations; Money laundering; Prevention; Regulation of financial institutions; Supervision; Terrorism financing; South Africa; Anti-money laundering; International best practices; Customer due diligence; Measures
• ISSN: 1368-5201; 1758-7808; 1368-5201
• DOI: 10.1108/JMLC-07-2022-0102

Purpose
The anti-money laundering (AML) frameworks of many countries were generally influenced by the international best practices of money laundering that were first established in 1988 through the Basel Committee on Banking Supervision (BCBS). The general belief is that these international best practices are applicable in all jurisdictions, although most countries are still affected by money laundering. The international best practices are universal measures that were developed as a yardstick to control and curb money laundering globally. Nonetheless, international best practices for money laundering are not tailor-made for specific jurisdictions and/or countries. Therefore, it remains the duty of respective jurisdictions and/or countries to develop their own context-sensitive AML measures in accordance with international best practices. An overview of the AML international best practices that were developed and adopted by several countries are analysed in this paper. These include customer due diligence measures established by the BCBS, the financial action task force (FATF) standards, as well as the ongoing monitoring and the risk-sensitive approach that were implemented to curb money laundering globally.
Design/methodology/approach
The article analyses the AML international best practices that were developed and adopted by several countries. These include customer due diligence measures established by the BCBS, the FATF standards, as well as the ongoing monitoring and the risk-sensitive approach that were implemented to curb money laundering globally.
Findings
It is hoped that policymakers and other relevant persons will use the recommendations provided in the paper to enhance the curbing of money laundering in financial institutions globally.
Research limitations/implications
The paper does not provide empirical research.
Practical implications
The study is useful to all policymakers, lawyers, law students and regulatory bodies globally.
Social implications
The study seeks to curb money laundering in the economy and society globally.
Originality/value
The study is original research on the use of AML/counter financing of terrorism international best practices to curb money laundering activities globally.