Anti-Money Laundering in the United States and Saudi Arabia: A Comparative Legal Study

Abstract

Money laundering is no longer a marginal concern. It sits much closer to the center of modern financial regulation. Part of the reason is straightforward. Laundering allows illicit proceeds to stay alive inside the financial system long enough to move, settle, and appear usable again. Still, that does not fully explain why the problem is so difficult. The real difficulty lies in its adaptability. Once regulatory pressure builds in one place, the activity rarely stays still. One image stayed with me while writing this dissertation: money laundering behaves less like a fixed act than like a water leak. Close one opening, and the flow does not necessarily stop. It often reappears elsewhere. Sometimes in a quieter sector. Sometimes through a weaker regulatory gap. Sometimes in a jurisdiction where scrutiny is lighter. That is one reason the issue remains so difficult to contain. The law improves, supervision becomes tighter, yet the activity adapts. Over time, the wider legal response to financial crime also came to include terrorist financing, especially in the years surrounding and following 9/11. In this dissertation, however, that issue remains part of the broader background rather than the focus of the later comparative chapters. This dissertation compares the anti-money laundering frameworks of the United States and the Kingdom of Saudi Arabia with particular attention to how each system is built and how it functions in practice. What became clear to me in working through both systems is that rules, by themselves, do not explain very much. Criminalization matters. Reporting duties matter. International commitments matter too. But they only take the analysis so far. The more revealing question lies elsewhere. It lies in the institutions. Who is responsible for what? How does information move once suspicion arises? Once several bodies become involved, the real issue is whether they genuinely coordinate or merely proceed in parallel. In the end, that proved more revealing than the rules by themselves. The first three chapters lay the foundation for that argument. They define money laundering, explain why it remains central to criminal enterprise, trace its wider harms, and place the modern AML framework within its historical and international development. They also explain why terrorist financing appears in the early structure of the dissertation. It forms part of the wider expansion of financial crime regulation, even though the comparative core of the study later settles more clearly on anti-money laundering architecture and operation. The dissertation then turns to the domestic systems of the United States and Saudi Arabia. Power in the U.S. system is divided among several institutions, and their mandates do not always sit neatly beside one another. Coordination is therefore built into the everyday operation of the system. Saudi Arabia is organized differently. Its framework is more centralized, and the lines of authority are generally easier to trace. The reason for comparing the two is not to decide that one is better across the board. It is to show that each system is built on a different institutional approach, and that each approach comes with advantages as well as disadvantages. That point becomes clearer in Chapter Six, which treats institutional coordination as the key variable of comparison. Chapter Seven then tests that framework through cryptocurrency and virtual asset service providers. VASPs are particularly useful for this purpose because they expose, with unusual clarity, how legal systems behave when regulatory categories are unsettled and pressure is high. In both jurisdictions, digital assets do not create an entirely separate problem. They reveal the deeper features of institutional design already present within each AML framework. What the comparison ultimately shows is fairly simple. Compliance with international standards plainly matters. Even so, it does not answer the more difficult question, which is whether the system actually works once pressure is applied. That depends on structure: whether institutions can share information in a useful form, whether responsibilities are understood in practice, whether the framework can adjust when risks change, and whether legal duties lead to coordinated action rather than remaining formal obligations on paper. The United States illustrates the advantages and burdens of a polycentric model built on overlap, specialization, and redundancy. Saudi Arabia illustrates the advantages and burdens of a more centralized model built on coherence and directed coordination. What ultimately emerges from the study is that anti-money laundering effectiveness is shaped less by legal form alone than by the institutional architecture through which the law is put to work.