Impacts of money laundering and terrorism financing: Final report

Image of banknotes on map of Australia

This report outlines a conceptual model of the social and economic impacts of money laundering and terrorism financing. Drawing on a comprehensive literature review and stakeholder interviews, it identifies possible economic, societal and sectoral impacts. Economic impacts are those that affect the economy at a macro level and include reductions in economic growth and foreign direct investment and the distortion of exchange and interest rates. Societal impacts include changes in crime levels—predicate offences which generate illicit proceeds that are then laundered, crimes financed using laundered funds and crimes attracted to areas where money laundering occurs—and the associated costs to the community. They also include the consequences of terrorism enabled by terrorism financing, including the costs of terrorist attacks and the impact on national reputation. Sectoral impacts include damage to the reputation of the financial sector and other regulated entities, the crowding out of legitimate competitors, artificial increases in prices (eg real estate prices), and lost tax revenue. Importantly, not all impacts are harmful; potential benefits of money laundering include the recovery of proceeds of crime from the enforcement of the anti-money laundering and counter-terrorism financing (AML/CTF) regime, the profitability of certain sectors that facilitate or enable money laundering, and the growth of the AML/CTF industry. Having identified these impacts, this report assesses their significance in the Australian context and sets out a path towards quantifying the impacts identified as both relevant and measurable.


URLs correct as at June 2024

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  • Acknowledgements
  • Acronyms and abbreviations
  • Abstract
  • Executive summary
  • Introduction
    • Purpose of this report
  • Methodology
    • Literature review
    • Interviews with stakeholders
    • Terminology
    • Limitations
    • Next steps
  • Money laundering and terrorism financing opportunities
    • The scale of money laundering
    • Sectors, methods and enablers
    • Summary
  • Economic impacts
    • Distorted rates
    • Foreign direct investment
    • Economic growth
    • Summary and measurement
  • Societal impacts
    • Crime and criminal justice
    • Terrorism
  • Sectoral impacts
    • Financial sector and other designated services
    • Private sector
    • Public sector
  • A conceptual model of impacts
  • References