3 November 2007
15.35-15.55
Joras Ferwerda & Silvester Bosma
Measuring Compliance
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Introduction
•Anti-money laundering policy
•FATF: 40 recommendations
•Assesments
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Assesment problems
•Different assessors
- IMF, FATF, Worldbank and Moneyval
•Different in quality, shape and size
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
“As a result of the way the assessments were
made and even their layout, the assessments
differed widely in quality, content, layout, and
even across institutions and countries, making
it very difficult to make sensible cross-country
comparisons and analysis.”
(Arnone and Padoan, 2006)
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Creating the database
•Based on available assesments
•Guideline for analysing assesments
- Also for checking, updating and extending the database
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
First step: Scale and general index
General index of the scale:
0 = No policy or action performed
1 = Only some policy or action performed / there has been an
attempt or some advice
2 = Still a lot to be done
3 = Some problems or some sectors uncovered
4 = Minor shortcomings / considerations for improvement
5 = Comprehensive implementation
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Second step: overruling guidelines
•Recommendation and Country specific
- Recommendation specific: 1. Palermo not implemented: -1
- Country specific: Denmark, if Greenland and Faroer do not
apply to recommendations: -1
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Third step: Double check
•First seperate analysis
•Then compare and discuss the score
- Ferwerda 3 and Bosma 5 does not necesarily mean 4
2 and 3 November 2007
Conference 'Tackling Money Laundering'
Cou
R
J
S D F
AUS
1
4 5 1 4
(8) Criminalised at state and territory level and these
offences vary in comprehensiveness
AUT
1
4 3 1 3
BEL
1
5 5 0 5
(120) Palermo not implemented and ratified (Table 10 sentence 3) Raise penalty level for simple ML offences
(7) OK
DAN
1
4 4 0 4
(Table) Greenland and Faroer not fully consistent, ran…
FRA
1
5 5 0 5
(149) Palermo + Vienna implemented, Criminalization
extensive
GER
1
5 4 1 5
(6) Criminalized on basis of Palermo and Vienna
GRE
1
3 2 1 2
(140) Expand ML to all serious offences and dual crimi...
IRE
1
5 5 0 5
(7) Broad ML offence
ITA
1
5 4 1 5
LUX
1
2 2 0 2
(In text and table no indications for deduction of points
have been found)
(7, table 2, 22) Palermo not ratified, scope too limited
NL
1
4 4 0 4
(113) Palermo not implemented
2 and 3 November 2007
Final score is based on
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Analysis of the database
“The aggregated compliance score for each country”
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
5
Average score
4,5
4
3,5
3
2,5
2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
“The average score of all countries on the 40 different
recommendations”
2 and 3 November 2007
Recommendation #
= average (3,6)
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Application of database / Further Research
1. Measuring the effect of policy on
different aspects
- Examples: Measuring effects of anti-money laundering policy
on criminal behavior or economic growth
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Application of database / Further Research
2. Test whether the policy works
- Examples: What is the effect of anti-money laundering policy,
does it work? Is there less money laundering in countries with
high compliance? Or do countries attract money laundering with
specific types of anti-money laundering policy?
2 and 3 November 2007
Conference 'Tackling Money Laundering'
“Measuring Compliance”
Application of database / Further Research
3. Consideration of the way the 40
recommendations are constructed
- Examples: Research on specific recommendations; compliance
score for recommendation 14 is 5 for all our countries, is this still
useful/a good measure?
2 and 3 November 2007
Conference 'Tackling Money Laundering'
3 November 2007
15.55-16.05
Discussion
2 and 3 November 2007
Conference 'Tackling Money Laundering'