Summary of Islamic Finance and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)

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Islamic Finance and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) summary
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Rating

8 Overall

8 Importance

8 Innovation

7 Style


Recommendation

The global financial system has identified and implemented measures against money laundering (ML) and terrorist financing (TF). But international experts have not extensively studied how such risks may impinge on Islamic finance. The criminal exploitation of gaps in safeguards among nations can pose threats to the global financial infrastructure. No evidence suggests that Islamic finance faces ML/TF risks that differ from those confronting traditional banking, but this does not necessarily mean that precautions in one system will translate effectively to the other. This enlightening report from the International Monetary Fund provides a robust analysis that identifies some of these potential hazards, and getAbstract recommends it to policy makers and financial professionals.

In this summary, you will learn

  • How money laundering (ML) and terrorist financing (TF) pose risks to the financial system,
  • How conventional and Islamic financing differ, and
  • Why the Islamic system may warrant some enhancements to counter ML/TF movements of money.
 

About the Authors

Nadim Kyriakos-Saad et al. are legal and financial experts at the International Monetary Fund.

 

Summary

Experts today have a solid understanding of how money laundering (ML) and terrorist financing (TF) activities operate in and threaten the mainstream financial system. The Financial Action Task Force (FATF) is an organization of international policy makers that sets laws governing ML/TF countermeasures...

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