The impact of money laundering on economic and human development of the countries

Abstract

Within the past few decades, the concept of money laundering and effective anti-money laundering regime has attracted increased attention both from the academic and practitioners’ world. In addition, money laundering scandals across the world could have great influence not only on involved financial institutions but also on the financial sector and state’s economy in general. A great number of researchers declare that the high risk of money laundering affects the development of the country. Frequency and scales of detected money laundering schemes boggle the mind providing the abstract representation of the amount of illegally gained proceeds. The topicality of the thesis is defined by the role of the region in the laundering of illegal proceeds as well as tightening of anti-money laundering control in light of disclosed money laundering cases (e.g. record fine of Rietumu Bank, Danske, suspicions on Swedbank, earlier ABLV, etc.). Thus, the analysis of the existing correlation between money laundering risk and development presents particular interest for the author. The conducted analysis has confirmed the hypothesis of the author indicating that there are direct relations between money laundering risks and the country’s economic and human development. However, the analysis of different countries’ groups such as developed and developing countries has shown various results indicating that different factors are influencing the development process.