Trade Finance Scorecard: Regulation and Market Feedback
This Scorecard is a new tool to help implement effective measures to fight money-laundering and terrorism financing while addressing market gaps from their unintended consequences.
Preventing criminals and terrorists from using the global financial system is critically important.
Implementing global regulation across jurisdictions with multiple stakeholders is a challenge, which can have unintended negative consequences.
ADB’s 2017 Trade Finance Gaps, Growth and Jobs Study identified unintended consequences from anti-money laundering and combating the financing of terrorism (AML/CFT) regulation as an important contributor to global market gaps for small and medium-sized enterprises financing, including in developing countries.
The Trade Finance Scorecard: Regulation and Market Regulation is the start of a work in progress. It offers unique features complementary to other efforts to address unintended consequences:
- Rather than rating entities associated with creating and implementing AML/CFT regulation, it scores related issues.
- Complementing the Financial Action Task Force and Financial Stability Board work in this area, the Scorecard offers a new diagnostic tool to identify and overcome unintended consequences of AML/CFT regulations, including their interpretation and implementation.
- It provides a new channel facilitated by ADB through which stakeholders can engage to resolve issues.
The Scorecard is not an end in itself, but the beginning of a process. The next step is a workshop with stakeholders to address issues.