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Islamic Finance and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)

Feb 29, 2016 | N. Kyriakos-Saad, M. Vasquez, C. El Khoury, A. El Murr | IMF

The money laundering (ML) and terrorist financing (TF) risks associated with conventional finance are generally well identified and understood by the relevant national authorities. There is, however, no common understanding of ML/TF risks associated with Islamic finance. Some are likely to be the same as in conventional finance, but there may also be different risks. The Financial Action Task Force (FATF), the Islamic finance standard-setters, and the national regulators should seek a greater understanding of the specific ML/TF risks that may arise in Islamic finance and develop an appropriate response.