How are Corruption and Money Laundering linked?

Both corruption and money laundering are of great concern for the IMF and they are now an integral part of its work because of the numerous disruptive consequences that each has on national and regional economies.

Anti-corruption and anti-money laundering work are linked in numerous ways, and especially in recommendations that promote, in general, transparency, integrity and accountability. Recommendation 6 of the FATF 40+9 Recommendations and Paragraph 7 of the Methodology for Assessing Compliance with the FATF 40+9 Recommendations, are particularly relevant to anti-corruption efforts. The essential connections are:

•Money laundering (ML) schemes make it possible to conceal the unlawful origin of assets. Corruption is a source of ML as it generates large amounts of proceeds to be laundered. Corruption may also enable the commission of a ML offense and hinder its detection, since it can obstruct the effective implementation of a country's judicial, law enforcement and legislative frameworks.

•When countries establish corruption as a predicate offense to a money laundering charge, money laundering arising as a corrupt activity can be more effectively addressed. When authorities are empowered to investigate and prosocute corruption-related money laundering they can trace, seize and confiscate property that is the proceeds of corruption and engage in related international cooperation.

•When corruption is a predicate offense for money laundering, AML preventive measures can also be more effectively leveraged to combat corruption.

The Financial Action Task Force (FATF) Secretariat is currently coordinating a project to draft a paper outlining the links between corruption and money laundering that may facilitate the implementation of international AML/CFT standards.