Over the past decade and beyond, the need for a modern anti-money-laundering strategy has become widely accepted internationally. Depriving criminal elements of the proceeds of their crimes has increasingly been seen as an important tool to combat drug trafficking and, more recently, as a critical element in fighting organized crime, corruption, and the financing of terrorism, and maintaining the integrity of financial markets. The first few financial intelligence units (FIUs) were established in the early 1990s in response to the need for countries to have a central agency to receive, analyze, and disseminate financial information to combat money laundering. Over the ensuing period, the number of FIUs has continued to increase, reaching 84 in 2003. This handbook responds to the need for information on FIUs. It provides references to the appropriate Financial ActionTask Force (FATF) standards wherever appropriate.
Participatory poverty assessments (PPAs) are broadening our understanding of both poverty and the policy process. The limitations of quantitative measurements of well-being have long been recognized, and there is a rich tradition of anthropological and sociological work that uses a range of techniques to achieve an in-depth understanding of poverty for project work. In this tradition, PPAs use a systematic participatory research process that directly involves the poor in defining the nature of poverty, with the objective of influencing policy. This process usually addresses both traditional concerns, such as lack of income and public services, and other dimensions, such as vulnerability, isolation, lack of security and self-respect, and powerlessness.
Since the mid-1980s, the need for a modern anti-money-laundering strategy has become widely accepted internationally. The negotiations of the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances can be seen as the starting point of this trend. Depriving criminal elements of the proceeds of their crimes has increasingly been seen as an important tool to combat drug trafficking and, more recently, all serious crimes. Progress in this area is becoming a critical element in fighting organized crime, corruption, and the financing of terrorism, and maintaining the integrity of financial markets.
In their simplest form, FIUs are agencies that receive reports of suspicious transactions from financial institutions and other persons and entities, analyze them, and disseminate the resulting intelligence to local law-enforcement agencies and foreign FIUs to combat money laundering (see Figure 1).
Including the poor in policy dialogue has great potential for creating better poverty reduction policies. The original rationale of the participatory poverty assessments (PPAs) was to influence the policy dialogue by collecting information on the poor’s perceptions of poverty. Most PPAs have achieved this objective to some degree, but with substantial variation in the level of impact. The PPAs with the greatest impact tended to be those that implicitly or explicitly had more ambitious objectives. It is useful to assess impact in relation to three objectives:
Although they vary in many ways, FIUs share a common definition, which refers to their basic function: serving as a national center for the collection, analysis, and dissemination of information regarding money laundering and the financing of terrorism. These three functions are the core functions shared by all FIUs recognized by the Egmont Group. The definition of FIUs based on their core functions was first formalized by the Egmont Group in 1996.39 Similar definitions, also based on the three core functions, have now been incorporated in the revised FATF Recommendations of June 200340 and in two global conventions.41
This chapter identifies good practices that should be considered when undertaking participatory policy research for policy change. Emerging good practice builds on the diverse impacts of key variables discussed in the previous chapter. It is divided into three main areas in which issues are similar and linked: first, issues to be considered from an institutional perspective within the World Bank;1 second, good practice when managing a PPA in country, at the national level, including how to open up the dialogue in participatory policymaking; and third, emerging good practice in conducting participatory research with the poor at the community level, and the principles behind this method of data collection. There is no unconditional good practice in this type of work because the best approach will be determined by the context. However, box 8 gives some suggestions for good practice and minimum standards that have emerged from experience with the Bank’s PPAs. These issues are then discussed in more detail throughout the chapter.