Criminals launder an estimated three to five percent of global Gross Domestic Product (GDP) - or $2.17 to $3.61 trillion per year - according to the IMF and World Bank. Drug traffickers, terrorists, kleptocrats, criminals, and organized criminal groups are just some of the entities that engage in the effort to disguise their illegal proceeds and the instrumentalities of their crimes. When criminals (including corrupt officials) and organized crime syndicates disguise the illicit nature of their proceeds by introducing them as legal funds into the stream of legitimate commerce and finance, they not only hide their illicit activities, but also taint the international financial system and erode public trust in its integrity. Some financiers have also used the financial system to finance or otherwise materially support terrorists, terrorist organizations, and acts of terrorism.
Although some of the funds used to finance terrorism have come from non-laundered funds donated to dual-purpose charities, terrorist financiers and other criminals not only use the formal financial system and new methods of value transfer, but also exploit means such as hawala, trade based money-laundering, and cash couriers, particularly in countries with non-existent or weak national anti-money laundering/countering the financing of terrorism (AML/CFT) systems. AML/CFT tools can expose the infrastructure of criminal organizations, the web of corruption, or a conspiracy to commit terror acts; provide authorities with a roadmap to those who facilitate the criminal and illicit activities; lead to the recovery and forfeiture of unlawfully-acquired assets; and support broad deterrence against a wide range of criminal activities including the financing of terrorism, which cannot be thwarted absent a comprehensive anti-money laundering regime.
INL’s Role: A strong AML/CFT regime provides jurisdictions with tools to combat money laundering and the financing of terrorism. INL works in global and regional forums to negotiate, assess, and promote international standards, and also cooperates directly with foreign countries to help national authorities adopt, implement, and strengthen their AML regimes; pursue cases; obtain convictions; and confiscate the proceeds of crime. INL’s programs help committed partners to prevent, trace, and recover illicitly-acquired assets that are the proceeds of crimes, as well as to disrupt and dismantle global criminal laundering operations. In addition to leading AML efforts, INL supports the Bureau of Counter-Terrorism (CT) in its related work to counter the financing of terrorism, including as co-chair of the Terrorism Finance Working Group.
Policy Development and Capacity Building: INL represents the U.S. Department of State in multilateral processes, such as the Financial Action Task Force (FATF) and related regional bodies, that develop and evaluate implementation of international AML/CFT standards. INL also develops, funds, and implements technical assistance projects to build AML/CFT capacity in foreign countries in response to traditional and emerging threats, such as kidnapping for ransom, exploitation of the gaming industry, non-bank financial products including hawala and new payment methods, and bulk cash smuggling. INL takes both a bilateral and a regional approach to capacity building.