WP 163.qxd:WP 163
4/3/09
5:21 PM
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Introduction
Bilateral Remittance Corridor Analysis The Bilateral Remittance Corridor Analysis (BRCA) effort was launched when the Asia Pacific Economic Community (APEC) asked the World Bank to study the global implications of remittances and of alternative value transfer systems (referred to as alternative remittance system, ARS). Both have become significant in the new era of fighting money laundering and terrorist financing. The Financial Market Integrity Unit of the World Bank accepted the task within its global Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) mandate. The study evolved into an analysis of bilateral remittance corridors within and across various regions, and this was found to be the best approach to understanding remittance flows, the factors determining their volume and characteristics, as well as the evolving trends of the remittance market. The findings of the studies provide information and analysis that both remittance sending and remittance receiving countries will find useful as policy guides. The BRCA’s key concern was one of integrity, namely the possibility of the criminal use of remittance channels for money laundering and terrorist financing purposes (ML/TF). Enhanced supervision of remittance channels means that money launderers and terrorist financiers are less likely to use them because both the risks and the costs associated with their illegal venture increase. However, in most countries, the lack of data on illegal flows, as well as the incipient nature of AML/CFT frameworks, makes judgments on effectiveness of AML/CFT measures difficult, though anecdotal evidence is persuasive. BRCA, therefore, has collected a great deal of data about formal remittance channels and also uses available data and information from AML/CFT assessment reports. It is critical, however, that BRCA analysis should also investigate remittance flows through informal channels, since these channels are more vulnerable to money laundering and terrorist financing risks. 1