AML regulations build institutional quality and lowers corruption

ML = Money Laundering, AML = Anti Money Laundering, SDI = Sustainable Development Indicator

From the policy and practical perspective, this study offers some insights for policymakers seeking to improve and implement anti-money laundering regulations in business practices, and for the economy as a whole. The findings of this paper reinforce that AML regulation is favorable towards the achievement of sustainable development in least developed nations. Therefore, to combat and control the level of money laundering, developing nations must set up and enforce AML framework. AML regulation fosters the effectiveness of institutions and financial development towards sustainable development. It also guarantees financial transparency, standards and promotes public accountability. AML regulations strengthen the legal system and reduce the level of corruption common to most developing countries. Second, the study reveals that AML regulation stimulates sustainable development for developing countries. On this note, it becomes appropriate for policymakers to effectively implement the AML regulations and ensure compliance. Financial regulators and authorities should ensure that the AML framework is entrenched in their supervisory roles, and is cost-effective.