ABSTRACT
Financial liberalisation and the accompanying illicit crimes prompted international harmonisation of a patchwork of domestic regulations on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulation. This chapter focuses on the nature and rationale for international financial regulations as instruments for curbing cross-border externalities. Treaties are presumed to serve as the primary source of international financial standards given their ability to compel enforcement. The Asian crisis triggered financial sector reforms aimed at promoting financial stability across borders and providing early warning signals. To justify the inclusion of the AML/CFT regulation in the international financial sector regime, it is crucial to parallel their aims. Money Laundering/CFT issues related to financial supervision and regulation by the International Monetary Fund are covered under its Article IV consultation. The Financial Action Task Force has necessitated the development of an intrinsic commercial position towards AML/CFT from financial and non-financial institutions.
