FATF measures and the combating of corruption in developing countries

Louis de Koker

Chapter 8 in A Research Agenda for Economic Crime and Development, 2023, pp 175-204 from Edward Elgar Publishing

Abstract: This chapter considers key measures that the Financial Action Task Force (FATF) adopted to combat corruption, the implications they may hold for developing countries, and relevant research questions for the future. Particular attention given is to the concept of “Politically Exposed Persons” (PEPs) and the implications of PEP-related measures. While there are valid development concerns regarding de-banking the chapter draws on examples from South Africa reflecting how de-banking of PEPs may actually in the right context also limit corruption and the criminal abuse of the financial system. The chapter also discusses the FATF’s increased focus on beneficial ownership. It considers the challenges in relation to correctly determining beneficial ownership and argues that developing countries would benefit from changes to corporate legislation that would limit unduly complex corporate control arrangements, at least in relation to small and medium-sized businesses that make up the bulk of statutory corporations. The chapter concludes with concerns regarding the need to safeguard the operational independence of Financial Intelligence Units, as well as accountability and transparency to the extent appropriate to their intelligence functions, and the challenge to achieve that in countries where the rule of law is under pressure.

Keywords: Development Studies; Economics and Finance; Law - Academic (search for similar items in EconPapers)
Date: 2023
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