American Power And Global AML Treatment

Money Laundering has become one of the International problems since1970s.Especially after the “9·11” event, Money Laundering Crime has been closely linkedwith drug trafficking and smuggling and terrorist activities, which threats a county’seconomic, political and social stability and also the security of the internationalpolitical and economics system. Different countries began struggling against MoneyLaundering, and the international community has formed the global governanceframework of Anti-Money Laundering(AML), where FATF acts as the core. FATF’smembers include main financial centers around the world and its “40+9”recommendations has become internationally recognized AML standard. Comparedwith diversification management pattern in other areas, why does global governanceof AML appear a high degree of uniformity and consistency? In other words, whywill countries with different situation adopt the FATF’sAML standard eventually?This paper attempts to explain this question through the interaction frame ofgreat powers and small countries. In this framework, great powers always come upwith regulatory innovation. By re-definition of power, great powers will useeconomic or political power to make small countries comply with FATF standard.Small countries will act positively to simulate new innovation that means economicpower works. Otherwise, they act negatively. Thus, great powers will stress differentpolitical power on them, that is bilateral or multilateral power.In the area of AML, while USA came up with the innovation of AML globalgovernance, small countries are not likely to simulate new standard after analysis.However, Money Laundering becomes internationalize and bilateral power cannoteliminate negative externality. Thus, USA pushes to establish InternationalOrganization, that is FATF, and then FATF will put multilateral stress onuncooperative countries, especially in the way of “Non-Cooperative Countries andTerritories”(NCCT) regime.This paper selects the process of Philippines adopting FATF standard as a caseto specify the analysis. During the process, FATF gives political pressure on Philippines by Controlling the deadline and key context of Philippines’Anti-MoneyLaundering Act. Conclusion is that AML standard adoption by Philippines is atypical case of political power.