ABSTRACT
The efficiency of the global anti-money laundering and counter-terrorist financing (AML/CFT) regime is largely dependent on the capability of countries to adopt and implement it. This chapter presents the compliance levels of countries to the Financial Action Task Force recommendations and empirically evaluates the factors that influence the attainment of such compliance levels. Treatises on corruption in financial institutions, the judiciary and executive arms of government may suggest that internal domestic factors drive and affect compliance to international AML/CFT standards. The capacity of regulatory and institutional officers to carry out their duties efficiently determines the degree of compliance. Legitimacy of institutions and standards is considered crucial for stimulating proactive compliance with regulatory standards. An assessment of countries’ Mutual Evaluation Reports is carried out to determine the level of compliance to AML/CFT. Evaluating legal factors in turn illustrates how a robust regulatory environment backed by sturdy legal factors are crucial determinants for effective compliance.
