How strongmen abuse tools for fighting financial crime

In principle fatf recommendations are non-binding. In practice almost no country can afford to ignore them. Any that receive poor marks risk ending up on a “grey” list, which causes capital inflows to dwindle as foreign banks retreat. Those on the “black” list—Iran, Myanmar and North Korea—are largely cut off from the global, dollar-based financial system. Despite this, the task-force’s standards are vaguely worded and allow strong measures to be taken, based not on criminal convictions, or even allegations supported by evidence, but on mere suspicions. The worst offenders are autocratic regimes keen to maintain a pretence of democratic rule, says Stephen Reimer of the Royal United Services Institute (RUSI), a think-tank. But even democracies are sometimes tempted. In 2022 Canada broadened its anti-money-laundering laws to stop funding for a protest by lorry drivers that had paralysed Ottawa. A recent study by RUSI suggests that abuses are most common during elections, referendums, the passing of controversial laws and periods of military tension.