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<p>The global diffusion of international anti-money laundering (AML) standards—led by the Financial Action Task Force (FATF)—exemplifies how transnational policy norms are adopted domestically to shape governance outcomes. Yet, the effectiveness of these standards in reducing crime remains a subject of significant debate. This study examines the impact of international AML standards on crime rates, utilizing an original panel dataset of police-recorded crimes across 31 FATF member countries/regions during the third round of mutual evaluations. The analysis employs the two-way fixed effects model and the two-stage least squares (2SLS) approach, and the findings reveal that stronger compliance with AML standards significantly reduces the total crime rate, but has limited deterrent effects on violent and property crimes. Moreover, while kidnapping rates decline, the incidence of high-yield predicate crimes such as corruption and fraud appears to increase, suggesting unintended consequences stemming from the professionalization of money laundering services. These findings highlight the complex governance challenges in implementing global regulatory standards and underscore the need to recalibrate AML frameworks to better target serious predicate crimes and disrupt organized laundering networks. This study contributes to the empirical understanding of global public policy diffusion and its domestic enforcement within the FATF regime.</p>

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Do the international anti-money laundering standards reduce crimes? Evidence from FATF members

  • 期刊论文

  • 发表日期：

    2025年8月13日

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  • Guike Zhang,
  • Zengan Gao,
  • Daan Wang

摘要

The global diffusion of international anti-money laundering (AML) standards—led by the Financial Action Task Force (FATF)—exemplifies how transnational policy norms are adopted domestically to shape governance outcomes. Yet, the effectiveness of these standards in reducing crime remains a subject of significant debate. This study examines the impact of international AML standards on crime rates, utilizing an original panel dataset of police-recorded crimes across 31 FATF member countries/regions during the third round of mutual evaluations. The analysis employs the two-way fixed effects model and the two-stage least squares (2SLS) approach, and the findings reveal that stronger compliance with AML standards significantly reduces the total crime rate, but has limited deterrent effects on violent and property crimes. Moreover, while kidnapping rates decline, the incidence of high-yield predicate crimes such as corruption and fraud appears to increase, suggesting unintended consequences stemming from the professionalization of money laundering services. These findings highlight the complex governance challenges in implementing global regulatory standards and underscore the need to recalibrate AML frameworks to better target serious predicate crimes and disrupt organized laundering networks. This study contributes to the empirical understanding of global public policy diffusion and its domestic enforcement within the FATF regime.