Money Laundering: Impact on Financial Institutions and International Law-A Systematic Literature Review

Shatha Ismaeel

https://doi.org/10.62271/pjc.16.4.823.835

Abstract

This study investigates the impact of money laundering on financial institutions and the effectiveness of international legal frameworks in combating this pervasive issue. Utilizing a systematic literature review methodology, the research analyzes key themes, including vulnerabilities of financial institutions, the efficacy of regulatory frameworks, the consequences of money laundering, and the evolving techniques employed by criminals. The findings reveal significant weaknesses in compliance measures within financial institutions, leading to reputational damage and substantial financial penalties. Additionally, while international frameworks like the FATF’s recommendations provide essential guidelines, inconsistent compliance and outdated regulations hinder their effectiveness. The consequences of money laundering extend beyond individual institutions, distorting market dynamics and exacerbating inequality, particularly in jurisdictions with weak regulatory systems. The study highlights the urgent need for enhanced collaboration among stakeholders, proactive regulatory adaptations, and a comprehensive approach that integrates technology and intelligence sharing. Ultimately, the research underscores the importance of a coordinated global response to effectively address the challenges posed by money laundering, contributing to the integrity and stability of the financial system.

Keywords: Money Laundering, Financial Institutions, International Legal Frameworks, Systematic Literature Review, Compliance, Regulatory Effectiveness