ABSTRACT
The preconditions for effective Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulation aimed at forestalling illicit transfers and the role of law in its development have been the subject of a distinguished body of research. An examination of the preconditions for effective regulation and possible compliance drivers illustrates divergent effects on African Countries and Emerging Economies (AC/EEs), further indicating the possible unsuitability of the current regime in effectively combating money laundering/terrorist financing (ML/TF) in ACs. This chapter shows that there are two interrelated preconditions for effective regulation of AML/CFT – law and confidence, drawing from categorisation by international financial institutions and trans-governmental networks. Recent studies have however illustrated that tougher AML/CFT regulations are associated with reduced levels of ML/TF, particularly those that criminalise predicate offences and improve disclosure. Positive governmental regulations are crucial in building and sustaining confidence as a precondition for effective regulation.
