FATF ¦ IO7 Mon­ey Laund­er­ing In­ves­ti­ga­tion & Pro­se­cu­tion

Immediate Outcome 7: Ensuring Cross-Border Money Laundering Cases Lead to Convictions

Immediate Outcome 7 measures whether a jurisdiction actually translates its anti-money laundering framework into real-world results: money laundering activities are identified and investigated, offenders are prosecuted and convictions lead to sanctions that are effective, proportionate and dissuasive. The goal is simple but demanding — ensure that the prospect of detection, conviction and punishment meaningfully deters criminals from laundering proceeds of crime. This outcome sits at the intersection of investigation, prosecution, judicial decision-making and international cooperation, and it directly tests whether the AML/CFT/CPF system works in practice against major proceeds-generating offences and complex, cross-border laundering schemes.

How assessors evaluate performance

Assessment of Immediate Outcome 7 is not a checklist exercise; it focuses on practical performance and systemic coherence. Assessors look for evidence that law enforcement and prosecuting authorities can identify money laundering (ML) activity, open and carry forward investigations, mount prosecutions across different ML types (including stand-alone offences, third-party laundering and self-laundering), and secure convictions followed by meaningful sanctions. They also assess whether parallel financial investigations are used, whether investigations addressing predicate offences outside the jurisdiction are pursued, and whether the different parts of the criminal justice system — investigators, prosecutors and courts — operate coherently to mitigate ML risk.

Key dimensions the methodology highlights

Identification and initiation of investigations: Assessors expect authorities to prioritize ML investigations in line with risk, with particular attention to major proceeds-generating crimes. Evidence includes sources that trigger investigations (suspicious transaction reports, financial intelligence, open-source and domestic or foreign intelligence), examples of significant or complex cases, and records of cases rejected for lack of evidence. Crucially, assessors consider whether the country can obtain timely financial intelligence and other information needed to investigate ML.

Investigative methods and use of financial probes: Effective systems use specialized tools and techniques such as parallel financial investigations, multi-disciplinary or joint investigative units, and investigative measures that preserve evidence while identifying perpetrators (for example, controlled transactions or postponing seizure to track flows). The methodology asks whether these techniques are used against major proceeds-generating offences and whether investigative resources and capabilities are sufficient and prioritized appropriately.

Prosecution and conviction of ML offences: Assessors examine the volume, nature and outcomes of prosecutions — the number of ML investigations leading to indictment, the types of ML prosecuted (stand-alone, third-party, self-laundering, foreign-predicate related), and conviction rates. They also evaluate how prosecutors prepare cases for trial, what circumstances lead to decisions not to prosecute despite indicative evidence, and whether ML prosecutions are linked to predicate crime prosecutions or pursued autonomously where necessary.

Sanctions: Beyond convictions, the methodology focuses on whether sanctions against natural and legal persons are effective, proportionate and dissuasive. That requires comparing penalties in ML cases with those for comparable economic offences, and judging whether penalties deter future offending. Assessors will expect courts to impose penalties that reflect the seriousness and scale of laundering, including fines, custodial sentences and asset-based remedies where appropriate.

Alternative criminal justice measures: The methodology recognises that in some cases a money laundering conviction may not be possible for justifiable reasons, and requires that jurisdictions apply alternative measures without letting those measures substitute for robust ML prosecutions. Examples include deferred prosecution agreements involving legal persons, charges under closely related offences (e.g., illicit enrichment or cash-smuggling), or asset recovery and confiscation proceedings. Assessors look for appropriate use of alternatives that preserve deterrence and accountability.

Bastian Schwind-Wagner _Follow

"Immediate Outcome 7 puts the emphasis on whether money laundering is effectively countered through timely investigations, risk-focused prosecutions and sanctions that deter future offences. Strengthening financial intelligence access, investigative tools and international cooperation will increase the likelihood of successful prosecutions and meaningful penalties.

Sustained coordination between investigators, prosecutors and the courts, alongside well-resourced specialized units, is essential to translate legal frameworks into results. Jurisdictions should ensure alternatives to convictions do not become a routine substitute for prosecuting core money laundering offences."

International cooperation and foreign predicates

Cross-border cooperation is central to effective ML investigations. Assessors consider the extent to which law enforcement seeks and obtains assistance from foreign counterparts in tracing cross-border proceeds, securing evidence, and prosecuting cases involving foreign predicate offences. The methodology requires evaluating how authorities handle ML linked to foreign predicates and whether prosecutions are pursued despite territorial limitations on predicate offences by prosecuting ML autonomously when needed.

Risk alignment and case prioritization

Evaluators must take into account the country’s assessed ML risk profile and the characteristics of laundering threats: whether authorities focus on domestic versus foreign predicates, prioritize large or complex cases over minor matters, and apply resources where they will have the greatest effect. The methodology explicitly asks assessors to consider whether activities and measures align with the country’s risk picture, including trends and techniques used by criminals.

Operational and structural factors

A number of practical and institutional questions influence performance:

• how quickly authorities can access financial intelligence;
• whether dedicated units, trained staff and investigative tools exist;
• how investigative work is coordinated with prosecutors; and
• whether judicial processes create undue barriers to effective ML prosecutions.

The methodology also considers resource sufficiency, the existence of specialized personnel, and whether ML investigations are properly prioritized where resources are shared across multiple mandates.

What strong performance looks like

A jurisdiction performing well on Immediate Outcome 7 will demonstrate a pattern of investigations and prosecutions that reflect the assessed ML risks, including cases against major proceeds-generating offences and complex laundering schemes. Investigations will make effective use of financial intelligence and parallel financial investigations; prosecutors will receive well-prepared cases and pursue ML charges where merited; courts will impose sanctions that reflect the gravity of the conduct; and authorities will effectively engage foreign partners in cross-border matters. Alternative measures will be used sparingly and appropriately, not as routine substitutes for ML convictions.

Common weaknesses that undermine effectiveness

Frequent shortcomings include failure to prioritize high-value or complex ML cases, weak use of financial investigation techniques, insufficient coordination between investigators and prosecutors, delays or gaps in accessing financial intelligence, limited capacity to pursue cross-border predicates, overreliance on alternative measures that diminish the focus on ML convictions, and sanctions that lack proportionality or deterrent effect. Any of these gaps can hollow out the deterrent effect of the AML/CFT framework.

Practical implications for policymakers and practitioners

To strengthen Immediate Outcome 7, countries should ensure investigators and prosecutors have timely access to financial intelligence, robust tools for asset tracing and parallel investigations, clearly defined case prioritization linked to national ML risk assessments, and specialized training and units for complex financial crime work. Legislative and procedural frameworks should enable prosecution of autonomous ML where predicate evidence is inaccessible, and sanctions regimes should be calibrated to be proportionate and dissuasive. Finally, sustained emphasis on international cooperation and prompt mutual legal assistance is essential to address laundering that crosses borders.

Conclusion

Immediate Outcome 7 puts the spotlight on outcomes: identification, investigation, prosecution and sanctioning of money laundering. A system that only looks good on paper but fails to produce timely, risk-focused investigations, successful prosecutions and meaningful sanctions will not deter criminals. The FATF methodology demands coherent performance across the investigative, prosecutorial and judicial chain, backed by adequate resources, international cooperation and alignment with assessed risks. Only then will the AML/CFT/CPF framework achieve its intended effect of disrupting the laundering of proceeds and discouraging future offending.

Dive deeper

• FATF ¦ The FATF Recommendations ¦ Link
• FATF ¦ Luxembourg’s measures to combat money laundering and terrorist financing ¦ Link