International AML/CFT Standards Flashcards

What is the 'Vienna Convention' (1988 UN Convention Against Illicit Traffic in Narcotic Drugs) and why is it foundational to international AML law?

Answer: The first major international treaty requiring countries to criminalize drug money laundering and establish mechanisms for asset confiscation, laying the foundation for global AML cooperation

The 1988 Vienna Convention was the first major international instrument requiring signatory states to criminalize drug-related money laundering and establish asset confiscation frameworks — establishing the conceptual and legal foundation for the global AML system that followed.

What is 'mutual legal assistance' (MLA) and why is it important for international AML investigations?

Answer: Formal legal mechanisms (treaties and agreements) allowing countries to request and provide investigative assistance — including sharing evidence, executing search warrants, and seizing assets — across national borders

Mutual legal assistance treaties (MLATs) and agreements allow countries to formally request investigative assistance from each other — gathering evidence, executing judicial orders, and sharing financial intelligence — which is essential for prosecuting cross-border money laundering cases.

What are FATF 'Immediate Outcomes' in its evaluation methodology and how many are there?

Answer: FATF has 11 Immediate Outcomes measuring whether a country's AML/CFT system is actually effective at achieving specific real-world results, such as adequate risk understanding, FIU effectiveness, and ML prosecution rates

FATF's 2013 evaluation methodology includes 11 Immediate Outcomes that assess whether the AML/CFT system produces real-world effectiveness results — moving beyond technical compliance to measure whether the system actually works.

What is the 'Palermo Convention' (2000 UN Convention Against Transnational Organized Crime) and how did it expand the AML criminalization framework?

Answer: It extended mandatory criminalization of money laundering beyond drug proceeds to the proceeds of all 'serious crimes,' as defined by the convention, significantly broadening the predicate offense base for AML laws worldwide

The Palermo Convention extended the money laundering criminalization obligation from drug proceeds (Vienna Convention, 1988) to the proceeds of all serious crimes (defined as offenses punishable by four or more years of imprisonment), dramatically broadening the predicate offense base for AML laws worldwide.

What is the EU's Anti-Money Laundering Directive framework and what does the Sixth Anti-Money Laundering Directive (6AMLD) add?

Answer: The EU AML Directives are binding regulations that EU member states must implement into national law; 6AMLD (2019) harmonized the definition of money laundering, created 22 predicate offenses, and introduced criminal liability for legal persons and stronger sanctions

The EU AML Directives are binding legal instruments requiring national implementation; 6AMLD harmonized the definition of ML across member states, established 22 standardized predicate offenses (including cybercrime and environmental crime), and introduced criminal liability for legal persons along with stronger sanctions including imprisonment.

What is 'proliferation financing' (PF) and when did FATF formally add it to its standards?

Answer: The provision of funds or financial services used for the development, acquisition, or deployment of weapons of mass destruction in violation of international sanctions; formally integrated into FATF's standards through Recommendation 7 in 2012 and strengthened in 2020

Proliferation financing refers to financial support for WMD development and delivery — nuclear, chemical, biological, and radiological weapons. FATF added Recommendation 7 on targeted financial sanctions for proliferation financing in 2012 and significantly strengthened its guidance with a 2020 report requiring risk-based controls.