Drug traffickers, diamond smugglers, and terrorists’ financiers around the world have one thing in common: they abuse the financial system to “clean” the proceeds they have obtained from their illegal work, or to transfer funds to achieve their destructive aims. The former is known as money laundering and the latter as terrorist financing. The IMF has worked with countries to combat money laundering and terrorist financing for over 10 years. With the benefit of all this experience, we decided it was time to consider a new, risk-focused approach to add depth to the way we assess money laundering and terrorist financing.
For all too many low-income countries, government tax revenues are far from enough to meet the needs of their people. Some have made good progress, and this helped them weather the crisis better than many advanced economies—but there is an underlying, quiet crisis of inadequately resourced governments.