STUART LEVEY of the Council on Foreign Relations and CHRISTY CLARK of the Podesta Group state that although UN implemented targeted financial sanctions had gained acceptance among governments and the private sector in disrupting illicit networks and pressuring intransigent regimes by making it far more difficult for them to access needed financial services, their enforcement continued to be lax outside the US.
They argue that the Financial Action Task Force (FATF) over its 20+ years of existence had successfully changed the international landscape on financial controls for combating money laundering and terrorist financing. in their op-ed for Foreign Policy, "Follow the Money", and call for FATF to develop and enforce standards for implementation of financial sanctions.
The FATF's published standards had incentivized countries to continually improve and gain FATF's seal of approval, or at least not warrant its disapproval.
ZELJKO BJELAJAC of the University of Novi Sad states that the combination of over 100 tax havens worldwide, correspondent accounts that nullify the 'Know Your Customer (KYC)' principle and proliferation of new electronic payment systems have significantly enhanced the scale of money laundering operations by transnational organized crime.
In an analysis of contemporary money-laundering for the Research Institute for European and American Studies (RIEAS), "Contemporary Tendencies in Money Laundering Methods", he draws attention to the inherent risks of electronic payment systems such as lack of transparency, inadequate recording and alerting on suspicious transactions and hindered access to judicial authorities that have been identified by the expert Financial Agenda Task Force (FATF).
He highlights global co-operation including universal standards for prevention of money-laundering and funding of terrorism, implementation across all jurisdictions, establishment of supervisory and internal controls, specialized education and staff training methodologies, detection and prosecution to reduce the risks arising out of money-laundering.
ARVIND SUBRAMANIAN of the Peterson Institute and DEVESH KAPUR of the University of Pennyslvania state that the skyrocketing corruption in India and the consequent money-laundering indicated the usage of discreet foreign jurisdictions as destinations for black money and India’s financial integration had facilitated these transfers.
In a Business Standard op-ed, "India: Fighting Imported Corruption", they also state that macroeconomic analysis showed that the laundered money came back to India as the much sought-after 'foreign' investment with additional implicit subsidies such as secrecy and avoided taxes, with the monies round-tripping back through the banking channel from countries such as Mauritius and Cyprus with lower financial transparency and low tax rates.
They call upon New Delhi to take the lead internationally in pressing for data-sharing between governments and global financial institutions on overseas assets of citizens, trade flows and remittances, and recommend an abolition of double-taxation avoidance agreements with states such as Mauritius who were not members of the Financial Agenda Tax Force.
