A comparative study: the Saudi and United Kingdom approaches to implementing the Financial Action Task Force (FATF) 1989 recommendations for combatting money laundering

Abstract

With the increase in money laundering in recent years, it is necessary to have effective systems that are able to combat this crime. To achieve this, national systems must be appropriate to achieve their objective of combatting money laundering. Therefore, many international bodies such as the Financial Action Task Force (FATF) seek to assist regulators in enacting the most appropriate and most effective laws. Consequently, the current study sets out to answer the following research question: To what extent have the Saudi and United Kingdom systems implemented the FATF recommendations and which of the two systems offers the best practices for combatting money laundering? Having answered this question, it became clear that the Saudi regulator has adopted a broad concept of money laundering and includes many behaviours that are deemed to fall under money laundering. In addition, it has more stringent requirements for keeping records because it explicitly stipulates that the minimum period for keeping these records must not be less than ten years and it does not specify an upper limit which is more stringent than the approach in the United Kingdom where regulators stipulate a minimum period of five years and the upper limit of ten years. Meanwhile, the British regulator outperformed the Saudi regulator in terms of the requirements for customers opening bank accounts to verify their identities which represents a very important step in terms of anti-money laundering.