Anti-money laundering laws don’t work

A study by criminologists Mirko Nazzari and Peter Reuter concludes that anti-money laundering (AML) laws haven’t reduced money laundering.

It is hard for anyone to defend the current system with enthusiasm. Its failure to reduce either the predicate crimes that generate large criminal revenues or the volume of money laundering is uncontested. Even though specific estimates of costs are lacking, no one doubts that those costs are in the hundreds of billions of dollars globally. The recurring money laundering scandals involving major banks further undermine claims that the system is effective. Beyond government officials and agencies, there is little positive feedback about the system’s performance. Government claims of success often appear ritualistic and are seldom scrutinized in detail.