IMF ¦ Guidance Note for Addressing AML/CFT Issues in Surveillance, Financial Sector Assessment Programs, and Use of Fund Resources

AML/CFT in 2026: why financial integrity is a macro-critical issue

Anti-money laundering and countering the financing of terrorism has moved far beyond a box-ticking exercise for banks and supervisors. The latest policy direction puts financial integrity at the center of macroeconomic stability, financial sector resilience, and cross-border spillover analysis. That shift matters because money laundering, predicate offences, terrorism financing, and related illicit financial flows are not isolated criminal risks. They can weaken fiscal capacity, distort credit allocation, damage trust in institutions, and disrupt access to the international financial system.

When financial crime becomes severe enough, it becomes macro-critical. That means it belongs in surveillance, financial sector assessments, and program design, not just in supervisory manuals and compliance reviews.

A broader view of financial integrity risk

The modern AML/CFT lens is wider than traditional bank compliance. It includes the laundering of proceeds from corruption, fraud, tax crimes, drug trafficking, organized crime, environmental crime, and other predicate offences. It also includes terrorism financing, which often uses the same channels of opacity and weak oversight that criminals exploit.

This broader view is important because the economic harm rarely comes only from the underlying offence. Harm also comes from the movement, concealment, and integration of illicit proceeds into the formal economy. Once those funds enter banks, real estate, trade, or corporate structures, they can distort prices, inflate asset values, weaken competition, and create reputational risk for the entire jurisdiction.

Bastian Schwind-Wagner _Follow

"AML/CFT policy is increasingly treated as a core stability issue rather than a narrow compliance function. When money laundering, terrorism financing, and related financial crimes are severe enough, they can weaken fiscal capacity, disrupt payments, and strain access to the international financial system.

The strongest policy responses are risk-based, country-specific, and closely linked to supervision, transparency, and governance. Beneficial ownership disclosure, better oversight of higher-risk sectors, and targeted reforms to reduce informality can all help limit the economic damage caused by illicit financial flows."

Why context determines the economic damage

Financial crime does not affect every country in the same way. In fragile and conflict-affected states, it can reinforce instability, finance violence, and weaken already limited state capacity. In low-income countries, tax evasion, smuggling, corruption, and informality can reduce revenue, widen governance gaps, and make public finance less reliable. In small developing states, especially those with offshore activity or non-resident business models, the main pressure often comes from correspondent banking, de-risking, and reputational shocks. In emerging markets, illicit flows can undermine fiscal space, distort investment, and affect financial sector stability. In advanced economies, the key issue is often the absorption of foreign illicit proceeds into deep, open financial systems, with major effects on real estate, professional services, and the integrity of corporate ownership structures.

AML/CFT policy has to be risk-based and country-specific. A one-size-fits-all approach misses the actual transmission channels.

Cross-border spillovers are a central concern

One of the most important developments in this policy area is the recognition that weak AML/CFT frameworks create spillovers beyond national borders. Illicit funds often move through multiple jurisdictions. If one country’s controls are weak, it can become a transit point, a safe haven, or a destination for criminal proceeds. That affects not only local institutions but also neighboring and partner economies.

The spillover channels are familiar but increasingly interconnected. They include pressure on correspondent banking relationships, volatility in payment systems, distortions in trade and capital flows, and the migration of criminal activity across borders. Digital channels add a further layer of complexity. Virtual assets, stablecoins, cyber-enabled fraud, and faster cross-border value transfer tools create new opportunities for concealment and arbitrage. The policy response therefore has to be international, coordinated, and data driven.

Crises make financial crime easier to hide

Economic and financial crises often intensify AML/CFT risks. When economies move into stress, more activity shifts into cash, informal networks, and opaque channels. Capital controls, exchange restrictions, devaluations, and payment disruptions can generate incentives for trade mis-invoicing, cash smuggling, parallel exchange markets, and the use of unregulated transfer systems. In that environment, illicit actors find it easier to blend in.

Crises also weaken public institutions. Supervisors, law enforcement bodies, tax authorities, and courts can all become less effective when fiscal and operational capacity is strained. That creates a dangerous feedback loop: the crisis expands the room for crime, and crime makes the crisis harder to resolve.

AML/CFT is part of surveillance

For surveillance purposes, the main test is macro-criticality. The question is not whether a country has AML/CFT shortcomings in the abstract. The question is whether those shortcomings have a meaningful impact on domestic stability, balance of payments stability, or global spillovers. If they do, then they belong in Article IV discussions.

That coverage can reach beyond financial sector policy. Weak AML/CFT regimes can affect exchange rate policy by undermining confidence and triggering capital flight. They can affect monetary policy by pushing activity into cash and informal channels. They can affect fiscal policy by enabling tax evasion, corruption, and illicit outflows. In other words, AML/CFT is increasingly treated as part of the macroeconomic toolkit.

Financial sector assessments need a stability lens

Financial sector assessments place greater emphasis on the link between financial integrity and financial stability. That means the focus is not just on whether a country technically meets a standard, but on whether AML/CFT weaknesses could transmit stress through banks, payment systems, cross-border funding, or other key parts of the financial system.

In practice, the most relevant issues are often ownership transparency, customer due diligence (CDD), supervision of higher-risk sectors, cross-border transaction monitoring, and the interaction between prudential supervision and AML/CFT supervision. In some cases, risks extend to real estate, professional enablers, virtual asset service providers (VASPs), and other non-bank channels.

The stability question is especially acute where foreign counterparties may respond to AML/CFT concerns by cutting ties, tightening controls, or reducing exposures. That can quickly become a broader financial issue, not just a compliance problem.

Program conditionality is becoming more targeted

AML/CFT can also appear in Fund-supported programs where the measures are critical to program success, external viability, or the implementation of agreed policies. The trend is toward more tailored, risk-based conditionality rather than generic reform lists.

The most common categories are legal and regulatory reform, institutional strengthening, and effectiveness measures. That can include better beneficial ownership transparency, stronger supervision of high-risk sectors, improved suspicious transaction reporting, targeted reforms to financial intelligence units (FIUs), and measures to reduce the misuse of corporate vehicles. In fragile states, low-income countries, and small developing states, the emphasis often falls on practical steps that can be implemented within constrained capacity and tight timelines.

The key principle is that conditionality should be specific, critical, and achievable. It should support the member’s own stabilization goals, not simply mirror an external checklist.

Why beneficial ownership transparency keeps coming up

Few AML/CFT themes are as central as beneficial ownership transparency. Opaque legal persons and arrangements remain one of the most effective ways to hide the proceeds of crime, corruption, and tax evasion. They also facilitate the misuse of public procurement, real estate, and cross-border transactions.

That is why policy advice increasingly supports registries that are accurate, timely, and useful to competent authorities, and in some cases accessible to the public. Transparency in ownership is not a cure-all, but it is one of the most effective ways to reduce concealment risk and improve enforcement.

The new policy baseline

The practical takeaway for financial crime professionals is that AML/CFT is not confined to compliance teams and typology reports. It is a core part of macro-financial stability analysis, cross-border risk management, and reform design. Countries with weak frameworks face more than reputational damage. They may face harder funding conditions, weaker investment flows, degraded correspondent banking access, and long-run damage to institutional trust.

Financial integrity is part of economic resilience. Jurisdictions that treat it as a strategic priority will be better placed to protect stability, preserve market access, and limit the cost of crime on the real economy.

Dive deeper

• International Monetary Fund (IMF) ¦ International Monetary Fund. Legal Dept. “Guidance Note for Addressing Anti Money Laundering/Combating the Financing of Terrorism Issues in Surveillance, Financial Sector Assessment Programs, and Use of Fund Resources”, Policy Papers 2026, 022 (2026), accessed 25.7.2026, https://doi.org/10.5089/9798229053686.007 ¦ Link