Finnish anti-money laundering regulation effectiveness and impact assessment

FINNISH ANTI-MONEY LAUNDERING REGULATION EFFECTIVENESS AND IMPACT ASSESSMENT Jyväskylä University School of Business and Economics Master’s Thesis 2024 Author: Beatrice Corander Subject: Banking and International Finance Supervisor: Heikki Lehkonen, Kari Heimonen ABSTRACT Author Beatrice Corander Title Finnish Anti-money laundering regulation effectiveness and impact assessment Subject Banking and International Finance Type of work Master’s thesis Date 11.06.2024 Number of pages 90 Abstract Money laundering activities are known to take place globally are on a very large scale, which increases the need for assessing the effectiveness of existing antimoney laundering systems. The thesis aims to examine the effectiveness of Finnish anti-money laundering regulation and possible improvements to impact assessment. The main purpose is to find out whether the current anti-money laundering actions are cost-effective. Research on the possible use of formalized cost-benefit analysis for Finnish anti-money laundering governmental proposals is another main aspect of the thesis. For a more comprehensive review, we also accessed and analysed data in a comparative manner from other Nordic countries, including Sweden, Norway, and Denmark. The thesis reviews the theoretical framework for criminal economics of money laundering in order to show how the money laundering process model could guide further work on regulative and legislative impact assessment. Further by reviewing several proposals to the use of cost-benefit analysis, we provide further guidance on how to adapt impact assessment to a particular legislative context. Our analysis of data about suspicious reports, sentences related to money laundering, and assets seized and frozen, from the earlier mentioned countries, shows that there has been a clear change in the frequency of the suspicious reports over time. The results further indicate that the number of Finnish suspicious reports is considerably higher than in the other compared countries, while the turnover rate of suspicious reports to sentences is consistently smaller in Finland. The presented impact assessment framework shows possible future use cases of the cost-benefit analysis for Finnish anti-money laundering governmental proposals. We also discuss the role of a cost-benefit analysis as an important addition to the existing procedures for impact assessments of legislative work. We thus anticipate that the research presented in this thesis can be useful for the Finnish Finance Ministry’s unit for prevention of money laundering and terrorism financing, for future reviews on their actions and improving their impact assessment. Key words Money laundering, anti-money laundering, legislation, impact assessment, costeffectiveness, cost-benefit analysis, criminal economics Place of storage Jyväskylä University Library TIIVISTELMÄ Tekijä Beatrice Corander Työn nimi Suomen rahanpesun vastaisen sääntelyn tehokkuus ja vaikutusten arviointi Oppiaine Banking and International Finance Työn laji Pro Gradu -tutkielma Päivämäärä 11.06.2024 Sivumäärä 90 Tiivistelmä Rahanpesutoimintaa tapahtuu maailmanlaajuisesti laajassa mittakaavassa, mikä lisää tarvetta arvioida nykyisten rahanpesun torjuntajärjestelmien tehokkuutta. Tämän Pro Gradu -tutkielman tavoitteena on tarkastella Suomen rahanpesun ehkäisyn sääntelyn tehokkuutta ja mahdollisia parannuksia vaikutustenarviointiin. Päätarkoituksena on selvittää, ovatko nykyiset rahanpesun vastaiset toimet kustannustehokkaita. Toisena Pro Gradu -tutkielman keskeisenä aiheena on tutkia formalisoidun kustannus-hyötyanalyysin implementointia Suomen rahanpesun estämisen hallitusesityksissä. Kattavampaa katsausta varten käytimme ja analysoimme vertailevasti tietoja muista Pohjoismaista, mukaan lukien Ruotsista, Norjasta ja Tanskasta. Pro Gradu -tutkielmassa tarkastellaan rahanpesun rikostaloustieteen teoreettista viitekehystä, jotta voidaan osoittaa kuinka rahanpesun prosessimalli voisi ohjata jatkotyötä säädösten ja lainsäädännöllisten vaikutusten arvioinnin parissa. Tarkastelemalla useita kustannus-hyötyanalyysin käyttöä koskevia ehdotuksia annamme lisäohjeita vaikutustenarvioinnin mukauttamiseen tiettyyn lainsäädäntöön. Aiemmin mainituista maista peräisin olevien epäilyttävien ilmoitusten, rahanpesuun liittyvien tuomioiden ja takavarikoitujen ja jäädytettyjen varojen analysointi osoittaa, että epäilyttävien ilmoitusten esiintymistiheydessä on tapahtunut selkeä muutos ajan myötä. Tulokset osoittavat tämän lisäksi, että suomalaisten epäilyttäviä ilmoituksia on huomattavasti enemmän kuin muissa vertailumaissa, kun taas tuomioihin johtava osuus epäilyttävistä ilmoituksista on Suomessa jatkuvasti pienempi. Esitetty vaikutustenarvioinnin viitekehys esittää kustannus-hyötyanalyysin mahdollisia tulevaisuuden käyttötapoja Suomen rahanpesun estämisen hallitusehdotuksissa. Keskustelemme myös kustannus-hyötyanalyysin roolista tärkeänä lisäyksenä olemassa oleviin lainsäädäntötyön vaikutustenarviointimenettelyihin. Näin ollen odotamme, että tässä Pro Gradu -tutkielmassa esitetyistä tutkimustuloksista voi olla hyötyä Valtiovarainministeriön rahanpesun ja terrorismin rahoituksen estämisenyksikölle, toiminnan arvioinnissa ja vaikutusarvioinnin parantamisessa. Asiasanat Rahanpesu, rahanpesunestäminen, lainsäädäntö, vaikutustenarviointi, kustannustehokkuss, kustannus-hyötyanalyysi, rikostaloustiede Säilytyspaikka Jyväskylän Yliopiston Kirjasto CONTENTS ABSTRACT TIIVISTELMÄ (ABSTRACT IN FINNISH) LIST OF TABLES AND FIGURES LIST OF ABBREVIATIONS 1 INTRODUCTION ................................................................................................ 9 1.1 Motivation .................................................................................................... 9 1.2 Research questions ................................................................................... 10 1.3 Definitions .................................................................................................. 11 1.4 Demarcation .............................................................................................. 12 1.5 Thesis structure ......................................................................................... 13 2 THEORETICAL FRAMEWORK ...................................................................... 14 2.1 FATF ........................................................................................................... 14 2.1.1 Methodology, Guidance, and Recommendations .................... 15 2.1.2 Country mutual evaluations ........................................................ 17 2.2 Legislation .................................................................................................. 21 2.3 Prevention of money laundering and terrorism financing ................. 23 2.4 Criminal economics in money laundering ............................................ 25 2.5 Cost-Benefit Analysis ............................................................................... 27 2.6 Legislative impact assessment ................................................................ 38 3 LITERATURE REVIEW ..................................................................................... 42 3.1 Impact and Effectiveness ......................................................................... 46 3.2 Cost-benefit analysis in anti-money laundering regulations ............. 49 4 DATA AND METHODOLOGY ....................................................................... 51 4.1 Data Description ....................................................................................... 51 4.1.1 Suspicious activity reports ........................................................... 52 4.1.2 Sentences in relation to Money laundering ............................... 55 4.1.3 Frozen and Seized assets .............................................................. 61 4.2 S Statistical tests ........................................................................................ 70 4.3 Methodology ............................................................................................. 72 5 RESULTS ............................................................................................................. 73 5.1 Effectiveness of AML ............................................................................... 73 5.2 Impact assessment framework ............................................................... 75 6 CONCLUSIONS ................................................................................................. 78 REFERENCES ............................................................................................................... 81 APPENDIX 1: DATA SETS ........................................................................................ 87 LIST OF TABLES AND FIGURES TABLES Table 1 Technical compliance ratings based on FATF (2024d) .............................. 20 Table 2 Effectiveness ratings based on FATF (2024d) ............................................. 21 Table 3 Costs of AML/CFT policy based on Unger et al. (2013) ........................... 29 Table 4 Benefits of AML/CFT policy based on Unger et al. (2013) ....................... 29 Table 5 Establishment and ongoing costs survey entities based on Deloitte (2016) 31 Table 6 Costs of compliance requirements categorization based on Deloitte (2016) 32 Table 7 AML/CFT Benefits based on Deloitte (2016) .............................................. 33 Table 8 AML/CFT CBA based on Ministry of Justice (2017) ................................. 34 Table 9 AML/CFT impact summary based on Ministry of Justice (2017) ........... 35 Table 10 CBA based on Sproat (2007) ........................................................................ 36 Table 11 CBA based on Harvey (2004) ...................................................................... 37 Table 12 CBA based on Financial Conduct Authority (2024) ................................. 38 Table 13 Research articles listed with main findings and results .......................... 42 Table 14 Turnover rate of SR’s to Sentences ............................................................. 69 Table 15 Turnover rates in Finland ............................................................................ 70 Table 16 SRs numbers per country and year ............................................................ 87 Table 17 Money Laundering Sentences in Finland 2018–2022 ............................... 87 Table 18 Money laundering imputable offenses in Finland 2018–2022 ................ 88 Table 19 ML offences known and solved in Finland 2006-2022 ............................ 88 Table 20 Money laundering sentences in Sweden 2018-2022 ................................. 89 Table 21 Money laundering sentences in Norway .................................................. 89 Table 22 Money laundering sentences in Denmark 2019-2022 .............................. 89 Table 23 ML frozen and seized assets in Finland ..................................................... 89 Table 24 ML frozen assets and frozen and seizure orders in Sweden .................. 90 Table 25 ML frozen and seized assets in Norway .................................................... 90 FIGURES Figure 1 The money laundering process based on Masciandaro (1999) .............. 25 Figure 2 Possible decisions and utilities of the resulting outcomes based on Masciandaro (2007) ....................................................................................................... 26 Figure 3 SRs for Sweden, Norway, and Denmark, Finland .................................. 55 Figure 4 SRs for 2021-2022 in Finland, Sweden, Norway, and Denmark ........... 55 Figure 5 Money laundering sentences in Finland 2018–2022 ................................ 56 Figure 6 ML offences known and solved in Finland 2013–2022 ........................... 57 Figure 7 ML sentences and imputable offences in Finland ................................... 58 Figure 8 Sentences relating to money laundering in Sweden for 2015-2022 ....... 59 Figure 9 Sentences relating to money laundering in Norway for 2015-2022 ...... 60 Figure 10 Money laundering sentences in Denmark .............................................. 60 Figure 11 ML sentences in Finland, Sweden, Norway, and Denmark ................ 61 Figure 12 Frozen and seized assets relating to money laundering in Finland ... 62 Figure 13 Asset freezing orders relating to money laundering in Finland ......... 62 Figure 14 Frozen assets average per number of freezing orders in Finland ....... 63 Figure 15 ML frozen assets in Sweden ..................................................................... 64 Figure 16 Number of ML freezing orders in Sweden ............................................. 64 Figure 17 ML frozen assets and number of freezing orders in Sweden .............. 65 Figure 18 Number of ML asset seizure orders in Sweden ..................................... 65 Figure 19 Amount of seized assets in NOK 2020-2022 in Norway ...................... 66 Figure 20 SR’s and Sentences in Finland between 2015-2022 ................................ 67 Figure 21 SRs 2015-2020 and Sentences 2015-2022 in Finland .............................. 67 Figure 22 SRs and Sentences in Sweden between 2015-2022 ................................ 68 Figure 23 SRs and Sentences in Norway between 2015-2022 ................................ 68 Figure 24 SRs and Sentences in Denmark between 2016-2022 .............................. 69 Figure 25 Timeseries of offences known .................................................................. 71 Figure 26 Timeseries offences solved ....................................................................... 71 LIST OF ABBREVIATIONS AML Anti-money laundering BCR Benefit cost ratio CBA Cost-Benefit Analysis CFT Combating the financing of terrorism/combating terrorist financing EEA European Economic Area EU European Union FATF Financial Action Task Force FIU Financial Intelligence Unit GDP Gross domestic product HE Hallituksen esitys (governmental proposal) KYC Know your customer ML Money laundering N/A Not available SAR Suspicious activity report SBT Suspicious business transactions STR Suspicious transaction report This master’s thesis considers the world of money laundering and terrorism financing, and how the impact of relevant legislation to prevent these activities can be investigated in a quantitative manner. In general, legislative bodies need to have a clear understanding of how well-functioning their legislative measures are and whether any changes to them are expected to have an improved impact. It is thus vital to know the cost-effectiveness of legislation for future development, as well as being able to create a comprehensive impact assessment framework for legislative changes. These aims apply generally to most legislative work but are particularly relevant for prevention of money laundering due to its negative impact on society and the uncertainties associated with both the extent to which money is laundered in the first place and what legislative measures do actually have an impact on it. 1.1 Motivation The timeliness and urgency of the thesis topic can be clearly seen from the global scale of money laundering and terrorism financing activities, which according to the United Nations1 report equal in one year between 2 % and 5 % of the global GDP. This brings a strong motivation to perform research on the effectiveness of current systems. The seriousness of these activities are also highlighted in the Europol (2022) in Brief, where it is mentioned that the most crucial types of crimes for law enforcement are financial and economic crimes. Money laundering has effects on the economy, as Hendriyetty and Grewal (2017) state, are there major impacts on macroeconomic stabilization e.g. by tax evasion, a predicate offence of money laundering, when taxes are a major part of a government’s revenue. 1 United Nations. Money Laundering. Office on Drugs and Crime. Retrieved September 2, 2023, from https://www.unodc.org/unodc/en/money-laundering/overview.html 1 INTRODUCTION guidance. The risk management concepts involve the development of suitable and relevant measures to reduce the level of risk from the assessed level to a lower or adequate level (FATF 2013). The FATF (2013) guidance for assessing money laundering and terrorist financing risk nationally uses key concepts, risk and three factors: threat, vulnerabilities, and consequence of which risk can be seen as a function of. Further FATF (2013) states that identifying and understanding the money laundering and terrorist financing risks, is the first step in addressing them, and the ideal risk assessment should include judgment on threats, vulnerabilities, and consequences. The use of the risk assessment is diverse according to FATF (2013), but particularly for policymakers it provides a framework to formulate the national anti-money laundering and combating financing of terrorism policies. Furthermore, it can help to make reasonable decisions on the allocation of resources, in addition to legal and regulatory frameworks. The allocation of resources to competent authorities is based on number two of FATF (2012-2023) Recommendations. It is stated in FATF (2012- 2023) Recommendations that countries should ensure effective mechanisms for cooperation, coordination, and information exchange between policymakers, the Financial Intelligence Unit (FIU), law enforcement authorities, supervisory authorities, as well as other relevant competent authorities domestically. This includes resources for the development and implementation of policies, and activities to combat money laundering, terrorist- and proliferation financing. These cooperation’s and coordination’s are crucial for the exchange of information domestically as well as internationally, which is crucial for the united fight against money laundering and terrorism financing. Some of the most relevant and important recommendations of the FATF (2012-2023) to cover in this thesis are described as follows. Recommendation number 1 covers the risk assessment and risk-based approach application, meaning a country should identify, assess, and understand risks relevant for the country relating to money laundering and terrorist financing. Recommendation 3 states that a country should criminalize money laundering and should be applied to all serious offences, including the predicate offences. Recommendation 4 states how policies and operational frameworks in place with a priority on asset recovery on a domestic and international level should be ensured by countries. Recommendation number 20 states that a financial institution should be required by law to report immediately any suspicions, or in case of reasonable grounds of suspicious funds as proceeds of criminal activity to the FIU. Recommendation number 26 discusses how financial institutions should be subject to regulation and supervision as well as ensure that they are implementing the FATF recommendations in an effective manner. According to FATF (2012-2023) recommendations number 29 should a country have an independent and separate entity as a Financial Intelligence Unit which receives and makes analyses on suspicious transaction reports, as well as other information relevant to money laundering and terrorist financing crimes. The FIU should also be responsible for the distribution and publishing of the results of the analyses. Recommendation 30 of responsibilities of law enforcement and investigative authorities states how a designated law enforcement authority, within the national anti-money laundering and countering of terrorist financing policies framework, is responsible for money laundering and terrorist financing investigations. Recommendation 31 on the powers of law enforcement and investigative authorities continues how they should have the ability to acquire all necessary information and documents for the investigations of money laundering, related predicate offences and terrorist financing. Further does recommendation 33 note how countries should keep statistics related to the effectiveness of the respective country’s anti-money laundering and countering of terrorist financing systems. This includes suspicious transaction reports received and the counts of money laundering and terrorist financing investigations, prosecutions and convictions, frozen property, seized property, and confiscated property, as well as mutual legal assistance or international requests for cooperation. 2.1.2 Country mutual evaluations FATF mutual evaluations are country reports where the implementation and effectiveness of measures to combat money laundering, terrorist and proliferation financing is analysed in depth (FATF 2024b). The reports are then peer reviewed by members from different countries, and the focus of the report is the systems of anti-money laundering and combating of terrorist financing, and a focused recommendation for further strengthening of these systems (FATF 2024b). The total length of the mutual evaluation process takes up to 18 months to complete going through various stages within the process (FATF 2024b). The mutual evaluation process (FATF 2024b) begins with the choice of the assessment team experts, after which the country provides laws and regulations relevant for the technical review. The technical requirements of FATF Standards are analysed, after which a draft report identifying the focus areas for the on-site-visit is made and can be commented on by the country (FATF 2024b). During the next stage of the process (FATF 2024b) are assessors conducting the one-site visit and meeting public and private sectors to see the laws in practice to confirm the effectiveness of them, following a draft of the implemented FATF Standards effectiveness. The mutual evaluation report is then drafted, including the technical compliance and effectiveness, following several rounds of discussion and review by the assessed country and independent reviewers (FATF 2024b). The next stage of the process (FATF 2024b) is when the decision-making body, the FATF Plenary (FATF 2024c) discusses the findings of the report after which the final report is adopted for publication. The final stage of the process (FATF 2024b) is the review for technical quality and consistency by the 198 country members of the FATF Global, following the publication of the final report including an in-depth analysis and recommendations for the country to take for strengthening measures to prevent criminal abuse of the financial system. FATF (2024b) notes that the mutual evaluation report should not be seen as the end of the process, but as the beginning of the country strengthening their measures of anti-money laundering, countering of terrorism financing, and the financing of proliferation. The rating of effectiveness of a country is the most important part of the evaluation, which is conducted through an on-site visit by a team of experts. The visit scrutinizes evidence that the country being assessed has functioning measures and that these measures are able to deliver the wanted results (FATF 2024b). Further FATF (2024b) states that the other important component is the assessment of technical compliance, which includes providing the information on the laws, regulations, and other legal instruments of a country for combating money laundering, terrorism- and proliferation financing. The current key documents in the FATF mutual evaluation process, are the FATF Recommendations, Methodology, and Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations (FATF 2024b). The latest Anti-money laundering and counter-terrorist financing measures Follow-up Report & Technical Compliance Re-Rating for Finland was published in October of 2023 (FATF 2023). The conclusion states that Finland has made progress regarding most deficiencies of technical compliance. There are only three recommendations which are rated partially compliant, and none have the rating non-compliant. Regarding recommendation 2, the National cooperation and coordination, the rating was largely compliant, and the underlying reason was that the Åland authorities’ participation in any of the mechanisms to cooperate and share information for AML/CFT purposes, is non-existent. The rating of recommendation 20 (Reporting of suspicious transactions) was compliant since the recommendation has been fully observed. Recommendation 26 (Regulation and supervision of financial institutions) was rated as largely compliant. Recommendation 29 (Financial intelligence unit) was rated as compliant since the recommendation has been fully observed. The rating of recommendation 33 (Statistics) was largely compliant, and the reason underlying the rating was that there are no comprehensive and reliable sets of statistics available regarding frozen property, seized property, and confiscated property in cases relating to money laundering and terrorist financing. Additional factors were related to missing information on mutual legal assistance (MLA), as well as other international requests on money laundering and terrorist financing cases to or from judicial authorities. Finland’s anti-money laundering and countering of terrorist financing measures will again be evaluated in the 5th round of mutual evaluation, meaning that Finland is no longer under enhanced follow-up investigation. Finland received 9 ratings of compliance, 28 ratings of largely complaint, and 3 ratings of partially compliant in their technical compliance. According to the consolidated table of assessment ratings by FATF (2024d), Finland has received 1 rating of high level of effectiveness, 3 ratings of substantial level of effectiveness, 6 ratings of moderate level of effectiveness, and 1 rating of low level of effectiveness. The latest Anti-money laundering and counter-terrorist financing measures 1st Regular Follow-up Report & Technical Compliance Re-Rating for Sweden was published in September of 2020 (FATF 2020). The conclusion of the report states that Sweden has been able to make progress towards correcting the identified gaps within their technical compliance. Their rating for Recommendation 26 (Regulation and supervision of financial institutions) was upgraded to largely compliant, based on the taken legislative measures, even though minor deficiencies remain. Their rating for Recommendation 15. on new technologies was lowered to largely compliant rating, based on identified deficiencies, and Sweden continues in regular follow up. Sweden received 14 ratings of compliance, 23 ratings of largely complaint, and 3 ratings of partially compliant. According to the consolidated table of assessment ratings by FATF (2024d), Sweden has received 1 rating of high level of effectiveness, 4 ratings of substantial level of effectiveness, and 6 ratings of moderate level of effectiveness. The latest Anti-money laundering and counter-terrorist financing measures 1st Regular Follow-up Report & Technical Compliance Re-Rating for Norway was published in February of 2023 (FATF 2023a). The conclusion of the report states that Norway has been able to make progress in addressing most deficiencies identified within their technical compliance, only including minor deficiencies. Their rating for Recommendation 15 on new technologies was largely compliant, which was lower than the previous rating. Their rating for Recommendation 26 was upgraded to largely compliant, based on their legislative measures taken, and Norway continues in regular follow up. Changes to Recommendation 15 and 26 were the only once made from the previous follow-up report. Norway received 19 ratings of compliance, 18 ratings of largely complaint, and 3 ratings of partially compliant. According to the consolidated table of assessment ratings by FATF (2024d), Norway has received 5 ratings of substantial level of effectiveness, and 6 ratings of moderate level of effectiveness. The latest Anti-money laundering and counter-terrorist financing measures 3rd Enhanced Follow-up Report & Technical Compliance Re-Rating for Denmark was published in February 2021 (FATF 2021). The conclusion of the report states that Denmark has been able to make progress in addressing most deficiencies identified within their technical compliance. Their rating for Recommendation 15. on new technologies was lowered to partially compliant rating, based on moderate deficiencies. Denmark continues to stay in enhanced follow up, since improvements on the anti-money laundering and countering financing of terrorism measures still need to be made. Denmark received 6 ratings of compliance, 32 ratings of largely compliant, and 2 ratings of partially compliant. According to the consolidated table of assessment ratings by FATF (2024d), Denmark has received 3 ratings of substantial level of effectiveness, 6 ratings of moderate level of effectiveness, and 2 rating of low level of effectiveness. Found below in Table 1 and Table 2, are the countries technical compliance ratings and effectiveness ratings presented in a consolidated manner. Table 1 Technical compliance ratings based on FATF (2024d) Table 2 Effectiveness ratings based on FATF (2024d) 2.2 Legislation This subchapter introduces legislation relating to anti-money laundering and combatting terrorist financing on the EU level as well as the countries chosen for the focus of this thesis. Anti-money laundering and terrorism financing legislations and regulations in Finland are based on EU directives and guidelines, as well as FATF recommendations. The three other countries, Sweden, Norway, and Denmark, that are included in this thesis are also members of FATF and similarly follow their recommendations. EU directives and guidelines are followed by the member countries Finland, Sweden, and Denmark. Whereas Norway is governed by the same basic rules as other EU member states, and some of the rules and directives set by EU, since it is a part of the European Economic Area (EEA). As an example, these include the EU’s anti-money laundering directives (Norway and the EU, 2022). Motivation for using the selected countries in comparison to each other and examining them together, can also be found in the similarity of their AML regulations. The most important document from the European Commission relating to anti-money laundering and impact assessment, is the working document on impact assessment accompanying the anti-money laundering package from 2021, and the methodology for assessing technical compliance with the FATF recommendations and the effectiveness of AML/CFT systems from FATF. The European Commission has the responsibility for producing the risk assessments of risks affecting the internal market of the EU (supranational risk-assessment, SNRA), and the European Union endorses anti-money laundering and combating terrorism financing legislation with strong objectives for the international contributions outright. The EU directives, DIRECTIVE (EU) 2015/849 on preventing the use of the financial systems for money laundering or terrorist financing, and the REGULATION (EU) 2015/847 on information on the payer accompanying transfers of funds, take into consideration the FATF recommendations of 2012, and were modernized in 2015. In addition, are these above-mentioned directives further strengthening some aspects for strong and high quality in the combatting of money laundering and terrorism financing. The 5th anti-money laundering Directive was published in 2018, but already in 2021, presented the European Commission a new package of legislative proposals for further strengthening the EU’s anti-money laundering and countering terrorist financing rules. The Anti-money laundering and countering the financing of terrorism legislative package contains four legislative proposals: the regulation on establishing of a new EU anti-money laundering and countering financing of terrorism authority, regulation on anti-money laundering and countering financing of terrorism including rules for the beneficial ownerships and customer due diligence, a 6th anti-money laundering Directive, and the 2015 regulation on transfers of funds a revision with the objective of tracing crypto-asset transfers. The final elements of the legislative package have been approved in 2024 by the co-legislators and are expected to come into force in July 2024. The new rules will mostly apply from 20277. The Ministry of Finance and the Ministry of the Interior are responsible for the prevention of money laundering and terrorist financing in Finland. Additional Ministries associated with the preventative work are the Ministry of Justice, the Ministry for Foreign Affairs, the Ministry of Economic Affairs and Employment, and the Ministry of Social Affairs and Health8. The Ministry of Finance8 oversees regulations issued relating to money laundering, and the risk 7 Retrieved May 5, 2024, from Latest update on Anti-money laundering and countering the financing of terrorism legislative package - European Commission (europa.eu) 8 Valtiovarainministeriö. Rahanpesun ja terrorismin rahoittamisen estäminen. Retrieved October 25, 2023, from https://vm.fi/rahanpesu assessment of money laundering and terrorism financing and is also responsible for the Anti-money Laundering Act. Current Finnish national laws relating to money laundering and terrorism financing, are listed as follows: The Anti-Money Laundering Act (Act on Detecting and Preventing Money Laundering and Terrorist Financing), Act on Virtual Currency Providers, Government Decree on Customer Due Diligence Procedures and Risk Factors in Preventing Money Laundering and Terrorist Financing, Government Decree on Politically Exposed Persons, Act on the Bank and Payment Accounts Control System, Act on the Financial Intelligence Unit, The Criminal Code of Finland, Administrative freezing of terrorist funds, Trade Register Act, Associations Act, Freedom of Religion Act, Foundations Act, Business Information Act, International Financial sanctions9. According to the Swedish Police (Polisen 2023a) there are three main laws on the fight against money laundering and terrorism financing. These are listed as follows: The Act on Measures Against Money Laundering and Financing of Terrorism (Money Laundering Act) law (2017:630), The Act on Punishment for Money Laundering Crimes, law (2014:307), and the Terrorist Crimes Act, law (2022:666). In addition to these, there are the ordinance (2009:92) on measures against money laundering and the financing of terrorism, Act (2017:631), on registration of beneficial owners, and the law (2022:666), the Terrorist Crimes Act. According to the financial supervisory authority of Norway (Finanstilsynet 2023a), is the current main law on the fight against money laundering and terrorism financing the Act relating to Measures to Combat Money Laundering and Terrorist Financing (the Anti-Money Laundering Act). According to the financial supervisory authority of Denmark (Finanstilsynet 2023), is the current main law on the fight against money laundering and terrorism financing the Act on Measures to Prevent Money Laundering and Terrorism Financing (the Anti- Money Laundering Act). 2.3 Prevention of money laundering and terrorism financing This subchapter shortly presents the prevention work of money laundering and terrorism financing in Finland, Sweden, Norway, and Denmark. The Financial Intelligence Unit of the National Bureau of Investigations in Finland is in charge of preventing, detecting, and commencing the investigation into money laundering and terrorism financing, as well as exposing such activities (Poliisi 2023a). As mentioned earlier in the FATF section, the FIU itself does not investigate any crimes and is an independent and nonpartisan unit. The main preventive actions are required to be done by merchants and financial operators encountering signs of money laundering in their business operations, and when such signs are encountered, are they obliged to file a report of it to the Financial Intelligence Unit Poliisi 2023a). The prevention of terrorism financing is mainly 9 Rahanpesu.fi. Legislation – Prevention of money laundering and terrorist financing. Retrieved October 11, 2023, from https://rahanpesu.fi/en/legislation done by freezing assets which are suspected to be used for the purpose of terrorist financing (Poliisi 2023a). In addition to handling reports of suspicious activity, the Financial Intelligence Unit does handle, analyse, and provide relevant information to other authorities in Finland and works closely internationally with other authorities (Poliisi 2023a) The prevention of money laundering and terrorism financing is a collaborative effort, where obliged entities follow obligations set in the Anti-Money Laundering Act, in addition to the supervisory authorities which the obliged entity also might have to register to10. Obliged entities should prepare a money laundering risk assessment relating to their business activities, know their customers and track their activities, as well as ensure enough knowledge and training for the staff to be able to observe obligations under the Anti-Money Laundering Act10. The Swedish police (Polisen 2023b) is in charge of the preventative work of money laundering and terrorism financing, in collaboration with 16 other authorities and organizations. This coordinated function is among other things in charge of producing the yearly national risk assessment of money laundering and terrorism financing according to Finansinspektionen (2023). According to the Norwegian National Bureau of Investigation’s Financial Intelligence Unit11 are preventative measures against economic crime taken before, during, and after the offenses. Crime prevention includes a difference between social prevention, which relates to influencing people’s behaviour, and situational prevention, which relates to the physical environmental changes, making the carrying out the offenses more difficult11. Økokrim11 continues, how the preventative measures can be split into vulnerability reduction measures and threat reduction measures, and based on protecting victims, and preventing the actualization of current threats are the measures then categorised. The emphasis on different factors when assessing relevant preventive measures within the individual threat can be e.g. reduction in recruitment to crime, deterrence, protecting current vulnerable targets, disabling though sanctions, and damage reduction, in addition to close collaboration with other public actors, the private sector, and voluntary organizations in their preventive actions11. Hvidvasksekretariatet12, the Danish Financial Intelligence Unit receives, analyses, and passes on information in relation to possible money laundering or terrorism financing. The Danish FIU12 operates independently with its competence and capacity to carry out tasks and make decisions on analysing, requesting, and distributing information. Despite operating independently does Hvidvasksekretariatet12 collaborate both nationally and internationally in the effort to fight money laundering and terrorism financing. 10 Rahanpesu.fi. Obliged entities. Retrieved November 2, 2023, from https://rahanpesu.fi/en/obliged-entities 11 Økokrim. Forebygging av økonomisk- og miljøkriminalitet. Retrieved April 17, 2024, from https://www.okokrim.no/forebygging.563199.no.html 12 Hvidvasksekretariatet. Om Hvidvasksekretariatet. Retrieved April 17, 2024, from https://hvidvask.dk/om-hvidvasksekretariatet 2.4 Criminal economics in money laundering This subchapter discusses the criminal economics in money laundering, regarding the model (models) being used in the thesis. A theoretical model related to economics of crime in money laundering has been derived by Masciandaro (1999, 2007). This model was also used in Ferwerda (2009) to consider if anti-money laundering regulation is actually able to reduce such criminal activity. The process of money laundering operation according to the economic model of Masciandaro (1999) is described in Figure 1. The model describes the sector of criminal actors as rational agents whose actions (optimal decisions) can be deduced from a set of assumptions that concern the cost of money laundering, the risk of being caught and the severity of penalties that apply. Figure 2 describes the set of actions the criminal actor can take, and the expected utilities associated with these actions. As further shown by Masciandaro (2007), the optimal decision regarding the level of liquidity to launder Y* equals under the model and the given constraints: Y* = [(1+r)(1-p)-c]/2pt Figure 1 The money laundering process based on Masciandaro (1999) Variables in Figure 1 are defined as follows. W = amount of liquidity initially available from criminal activity, Y(0<y<1) = fraction of money laundered, c(0<c<1) = cost of laundering operation as a fraction of liquidity to be laundered, q = fraction laundered liquidity to be reinvested in illegal markets, r(r>0) = a fraction of the differential in expected real returns between illegal and legal investments. Table 6 Costs of compliance requirements categorization based on Deloitte (2016) Compliance requirement Establishment cost Ongoing costs Internal External Total Internal External Total Customer due diligence Account and transaction monitoring Record keeping AML risk & compliance programme Suspicious transaction reporting Total costs The report (Ministry of Justice 2022) also estimates the actual AML/CFT costs for the private sector, presented by supervisor authority and by type of entity, and the public sector costs of the agencies responsible for AML/CFT functions. The benefits on a sectoral and entity level were surveyed by Deloitte (2016), though only compiling the top 3 benefit statements of each category. Through the results of Deloitte on the benefits (2016) is following Table 7 compiled for an overview of the important categories and questions for a view on the benefits. Table 7 AML/CFT Benefits based on Deloitte (2016) Benefit category Questions Financial and legal risks reduce Risk of breaching legal requirements will decrease / Risk of financial and reputational losses related to internal and external fraudulent activities decrease Improvement in business efficiency Improved systems, processes and reporting help achieve better business decisions / Quality customers are attracted and potentially harmful customers are deterred Improvement in governance and assurance processes Better information flow about business activities to senior management / Risk management and compliance abilities improve Improvement in employee awareness and training Employee engagement improved though being a respected and ethical business / Customer relationship and risk management skills of employees improve Protected and/or enhanced brand reputation Reputation of a safe and ethical business is enhanced or maintained / Businesses benefit from the country’s reputation of being a safe and ethical place to conduct business in As presented by the Ministry of Justice (2017) is their cost benefit analysis broken up in modelled benefits, and modelled costs, which is made up of business compliance costs and direct departmental costs. The Ministry of Justice (2017) also present strategic benefits, which includes deterrence value, decreases in social harm, and improved international reputation. The Ministry of Justice (2017) AML cost-benefit analysis impact analysis presents impacts of the proposal with monetary value, which are presented in Table 8 below. Table 8 AML/CFT CBA based on Ministry of Justice (2017) Costs Benefits Benefit cost ratio (BCR) Governmental expenses of the initiative Seizure and forfeiture revenues to the Government Compliance costs for businesses and consumers Crime reduction through the restraint and confiscation of money laundering funds Strategic and societal Benefit Resulting from/in Deterrence of money laundering Increased monitoring, consequent benefits from reduction in precedent crime Decrease in social harm Decrease in crime Improved international reputation Better trade terms, perception of a safe country to do business with The impact analysis by the Ministry of Justice (2017) includes a summary table, shown in Table 9 to provide an overview of the important sections, which could be generally considered in a cost-benefit analysis of an impact assessment in AML regulations. Table 9 AML/CFT impact summary based on Ministry of Justice (2017) Identified and listed impacts Certainty Decreased money laundering resulting in decrease in predicate crime Benefits model High/Medium/Low Cost of the initiative Fiscal operating and capital costs of the initiative Based on historical data by supervisors and the regulated sectors scale High/Medium/Low Government Benefits/(Costs) Forfeiture of revenue High/Medium/Low Total quantified government impact High/Medium/Low Wider societal benefits/(Costs) Sector compliance costs Startup and ongoing compliance costs High/Medium/Low Upper bound to crime deterred Not included in totals High/Medium/Low Drug harm prevented Not included in totals High/Medium/Low International Reputation/Trading risk Ease of Shell company establishing? Anti-corruption rating and ranking? High/Medium/Low Net present value of total quantified societal impacts Excludes fiscal cost of initiative High/Medium/Low Sproat (2007) research does a preliminary cost-benefit analysis of the UK’s anti-money laundering and asset recovery regime. This financial cost-benefit analysis calculates the financial costs and the financial benefits, where the financial costs include private costs, and the public costs. Table 10 summarizes the main results of Sproat (2007). Table 10 CBA based on Sproat (2007) Financial costs Financial benefits Private costs: Jurisdiction Public costs: public bodies Recovered assets Banking sector Primary AML/CFT legislator and ministry Restrained assets, removed from the reach of criminals which aren’t able to be re-in- vested at that point in time Other financial service institutions Prosecution office for money laundering offences Accountants and lawyers Judicial system processing the accused, and court services Estate agents, casinos and other Staff costs regarding asset recovery and AML tasks Financial intelligence unit Agency costs in confiscation and asset recovery Further investigating the preliminary cost benefit study by Harvey (2004) the consensus is that the costs and benefits of compliance with money laundering regulation can be divided into the private costs and benefits and the public societal costs and benefits. Harvey (2004) states how the integrity of the banking and financial industry and therefor the financial markets effective functioning is relying on its reputation. The optimal level between the costs on the society through money laundering regulation, and the benefits achieved for the society through the reduction in money laundering needs to be established according to Harvey (2004). It is further stated in Harvey (2004) research, how the inefficiencies imposed on society and the impact on all companies and individuals administrating financial transactions weight against the social benefits of the reduction in money laundering activity. Harvey (2004) states that the issue on quantifying the benefits throughout research on the costs and benefits of money laundering regulations remain. Harvey (2004) highlights the UK’s Financial Services Authority (FSA) comment on how the overall benefit in highly dependent on the practical contribution of suspicious transaction reports (STRs). According to Harvey (2004) there is a lack of prosecutions stemming from STRs. Thus, can it be justified to question the benefits in relation to the compliance cost burden. The turnover rate of prosecutions from STRs should thus be assessed, due to the burdensome compliance costs the industry faces, to further justify the relationship between the costs and benefits of AML and CFT regulations. Table 11 presents the findings of the preliminary cost benefits study by Harvey (2004). Table 11 CBA based on Harvey (2004) Costs Benefits Private costs Private benefits Tangible operational costs Costs avoided Physical and human capital used to comply with AMLR Intangible benefits Tangible benefits Overall reputation, affecting the relationship with customers, competitors, and the outside world Avoidance of penalties from non-compliance Reduction in vulnerability Societal costs Societal benefits Inefficiencies imposed on society Governmental reputation regarding compliance with international requirements Integrity of the financial system A review will further be done on the impact assessment conducted by the HM Treasury (2022) on the amendment on the UK’s Money Laundering and Terrorist Financing regulation, to receive further knowledge on how costs and benefits of an anti-money laundering regulation has been analysed in practice. The full economic assessment (HM Treasury 2022) presents the costs categorised into total transition, average annual, and total cost, with low, high, and best estimates. The full economic assessment (HM Treasury 2022) then further introduces the key monetised costs by main affected groups are presented as direct and indirect costs and then the non-monetised costs are presented as direct and indirect costs. Equivalently are the benefits in the full economic assessment (HM Treasury 2022) presented. The direct costs and benefits as well as the indirect costs and benefits on business is analysed in a corresponding manner. Further reviewing the UK’s Financial Conduct Authority (FCA) (2024) way of analysing the costs and benefits of their policies provides structured evaluation stages and elements to consider in estimating costs and benefits of policies. Some important steps taken and costs and benefits to be highlighted from the analysis (Financial Conduct Authority 2024) are presented in Table 12 below. Table 12 CBA based on Financial Conduct Authority (2024) Benefit estimation stages: Identifying the benefits, quantifying those affected by harm, quantifying those from whom harm is reduced, monetising benefits Compliance cost estimation steps: Identifying functions of firms affected, estimating the increase in the activities of those functions, one-off costs and ongoing costs of regulatory changes, monetising Benefits to consumers: Monetary and psychological benefits Costs to consumers: Cost passthrough Benefits to firms: Increased efficiency, trust and reputation, competition, risk reduction, market integrity, liquidity benefits Costs to firms: Staff time, capital invested in systems for compliance, fees to help with compliance activities LexisNexis (2017) survey report on the true cost of anti-money laundering compliance in Europe with a focus on the EU’s Fourth AML Directive. LexisNexis (2017) states how the most notable costs are relating to labour resources. Indirect costs can be among others, stated by LexisNexis (2017) lost productivity, customer on-boarding delays. Elements estimated by LexisNexis (2017) as AML compliance costs, were labour and resource costs, costs for systems, and governance costs which include such as transaction monitoring, sanctions screening, investigations, reporting, and risk assessments. The LexisNexis (2017) report states how AML compliance also brings benefits, some of which are presented as improvements in data management of customers and financial risks, an increased understanding of customers and their risk tolerance. The current method for cost-benefit analysis can be used in impact assessment to show the current efforts effectiveness and if they should be continued to further show the value of the impact of the legislation. This could also show the effectiveness of the current situation, after which an analysis of the costs and benefit the current drafted legislation could provide. 2.6 Legislative impact assessment This subchapter presents a review of a Finnish and Swedish impact assessment, the Finnish guidelines of impact assessments in law drafting, the legislation evaluation council’s review in 2021, and the Swedish review on a better impact assessment. This helps us to investigate the current situation of anti-money laundering impact assessments in law drafting and what guidelines Finland already have, which can be mirrored to the Swedish better impact assessment review suggestions. To start off, we will look at the impact assessment guidelines for law drafting (Valtioneuvosto 2022), and then a review of an impact assessment in a government proposal relating to anti-money laundering and countering of terrorism financing. The chosen governmental proposal for the example is chosen based on the governmental proposals which the legislation council gave a statement on (Valtioneuvoston kanslia 2021) to then be able to link their improvements to the governmental proposal itself. The governmental proposal (Hallituksen esitys HE 236/2021) to the parliament on amending sections 3 and 20b of the Act on the Prevention of Money Laundering and the Financing of Terrorism and the Act on Financial Supervision into laws. According to the Finnish Government’s (Valtioneuvosto 2022) law drafting impact assessment guidelines should the effects be primarily evaluated both quantitatively and qualitatively, since the methods of assessment are able to complement each other. Methods used for the quantitative assessment are statistical or mathematical calculations, which can relate to estimations of the magnitude of the effects in euros or to the size of a target group for example. The guidelines (Valtioneuvosto 2022) further states examples of methods which can be used in the impact assessment such as statistical explanatory analyses, statistical or mathematical modelling, the cost-benefit analysis, cost-effectiveness analysis, and the standard cost model. To highlight the importance of the quantitative analysis, it is also stated in the guidelines (Valtioneuvosto 2022), how efforts towards a quantitative assessment of the economic effects must be made. The impact assessment section of the drafted governmental proposal (Hallituksen esitys HE 236/2021) is broken down into subchapters under the section main effects. These subchapters are as follows: economic effects, effects on households, effects on companies, effects on the public finances, the national economic effects and overall assessment of economic effects, effects on the activities of the authorities, effects on audit supervision, effects in the financial supervisory authority and the regional state administrative agency for southern Finland, effects on all supervisory authorities, effects on the financial intelligence unit, effects on the prison and probation service of Finland, other authority effects, and lastly other social effects, under which effects on the status of citizens and the functioning of civil society is presented. The Finnish council of regulatory impact analysis statement on the drafted governmental proposal (Hallituksen esitys HE 236/2021) conveys how the drafted governmental proposal partially complies with the law drafting impact assessment guidelines. They further comment on how the qualitative analysis on the effects has been mostly done accurately and with care, providing a fairly good idea of the qualitative effects. In 2021 the legislation evaluation council (Valtioneuvoston kanslia 2021) gave a statement on the governmental proposal draft on the legislation on prevention of money laundering and financing of terrorism and the legislation on financial supervision by the Ministry of Finance. The council (Valtioneuvoston kanslia 2021) states how the proposal is lacking in examples of the application of the law as well as its impact. They further state how the broadness of the actions generate to the obliged entities and the supervisory authorities should be able to be deduced from the proposal. The council (Valtioneuvoston kanslia 2021) also comments how the proposal should weigh the administrative burden it would cause, against the benefits of crime prevention, and a more specific assessment of the effects of money laundering and terrorism financing should be conducted. Further mentioning how the proposals should also specify the effects it would have on tens of thousands of obliged entities. The current money laundering and terrorism financing situation should be presented within the proposal, since based on the draft it isn’t possible to get a sufficient understanding of the current scale of money laundering and terrorism financing. The Swedish governmental proposal, Cooperation against money laundering and financing of terrorism (Regeringens proposition 2021/22:251), is chosen to be reviewed in this case to receive a wider knowledge on the content of an impact assessment on legislation of prevention money laundering and terrorism financing. The government assessed that the proposal (Regeringens proposition 2021/22:251) would add to the increase in efficiency of the authorities’ and credit institutions’ contribution to anti-money laundering and countering of terrorism financing work, with positive social-economic effects. It is further stated that the participating credit institutions may initially expect somewhat higher costs in e.g. the training of personnel but is outweighed by the advantages the governmental proposal would bring to these institutions. The governmental proposal assessment (Regeringens proposition 2021/22:251) states that there wouldn’t be any costs for the authorities participating but would increase efficiency in its information exchange. On the other hand, would some costs increase for the companies concerned, the country administrative board, and the Swedish companies’ registration office. The assessment of the proposal (Regeringens proposition 2021/22:251) states the any additional costs for the authorities must be managed within existing frameworks as well as through fee collections. The investigation’s assessment mostly agrees with the government’s assessment of the governmental proposals (Regeringens proposition 2021/22:251) impact assessment, and most of the entities giving a statement confirm or have no objection to the assessment. The entities giving a statement on the governmental proposal regarding the impact of it, are as follows: the Swedish estate agents inspectorate, the trade union for employees in the financial sector (Finansförbundet), the association of Swedish Finance houses, the Swedish bankers’ association, the administrative court in Stockholm, the Swedish better regulation council, and the Swedish bar association. By reviewing the governmental proposals (Regeringens proposition 2021/22:251) impact assessment, it can be stated that there is a lack of any calculations on the costs and benefit of the proposal, and is a qualitative analysis based on the opinions of the entities giving a statement on the proposal’s impact. The discussion on the costs is only related to comments on their accommodation within existing financial frameworks. The Swedish Finance Ministry has presented an extensive review on a better impact assessment in 2022 (Finansdeparementet 2022), which states that the quality of the impact assessments can be strengthened. It is further stated, how the Swedish impact assessments have received reoccurring criticism from the Swedish national audit office, the Swedish agency for public management, and the organization for economic co-operation and development (OECD). The review (Finansdeparementet 2022) states how the committee’s handbook (Ds 2000:1) clarifies the impact assessment requirements, and includes support regarding cost calculations, as well as notes how the impact assessment should begin early in the proses of government proposal preparation. The review (Finansdeparementet 2022) further states how the better regulation in Europe: Sweden 2010 report by OECD critics the lack of quantified benefits and costs in Swedish impact assessments, and how all significant impacts should be assessed, not only once relating to companies. It is further emphasized in the review (Finansdeparementet 2022) how the UK has ranked at the top of the OECD’s country comparison of impact assessment work. The review points out how the UK’s finance ministry, HM Treasury, is responsible for guidance on the impact assessments, including a template for the presentation of most important results. The summary of the assessment must include the comprehensive goals of the proposal, alternative proposals considered, and the results of a socio-economic analysis, including quantified and non-quantified consequences. The review (Finansdeparementet 2022) suggests that impact assessments must consist of an analysis of the proposal, including a description and calculation of the proposal’s costs, revenues, as well as other relevant consequences. It is further stated how the assessments and calculations should be based on empirical data and be as realistic and well-founded as possible. The review (Finansdepartementet 2022) also notes that in case the effects cannot be calculated, the lack of calculations must be justified. Based on the review (Finansdepartementet 2022) on the quality of the impact assessment, the impact assessments need to be strengthened. The reviewed information in this section of legislative impact assessment will aid in the suggestions given for better quality in future impact assessments relating to anti-money laundering and countering of terrorist financing legislations. The main giveaway from the information review in this subchapter is the need for a cost-benefit analysis in the impact assessments. activities. Based on Ofoeda (2022) there is a link between the anti-money laundering regulations and financial inclusion globally, but as results from Ofoeda et al. (2020) indicate, there is also a need for an equilibrium in this context. The results of Ofoeda (2022) show that anti-money laundering regulations further contribute to inclusivity in finance through building trust and confidence in the financial system but can have a negative impact at a certain point, through costs these regulations impose on banks. According to the research conducted by Sproat (2023), the number of drug deals or level of organized crime has not decreased through the implementation of anti-money laundering system and the police work conducted, which strongly suggests that the UK’s anti-money laundering system has not been effective or have had an impact according to its intended purpose. To further discuss the issue of the effectiveness of money laundering regulations in the UK, it is relevant to note the research of Harvey (2008), where it is emphasized how the reputation of institutions is a driving factor of covering anti-money laundering costs. However, this is not seen to be a general concern by the public. Harvey (2008) further argues for the complicated association between anti-money laundering compliance and its reduction, through the regulation generating an externalized solution. Discussing the costs and benefits further, Harvey (2008) does mention how compelling the argument is for the removal of government intervention and thus letting the free market to regulate instead, since 1) the benefits cannot be shown to exceed the costs, 2) the impact on money laundering activity is minimal, 3) there has been no evidence of the collapse of the banking system. Importantly, this can be argued against based on other research showing that anti-money laundering regulation is important for the financial development and stability of a country. Referring to Harvey (2008) and to Franks et al. (1998), where they cite Lomax (1987) statement of a financial industry’s biggest threat being overreaching or inappropriate regulations. Based on this it can again be concluded that it is of importance to do research on the expected effectiveness and impact any given level of regulation has, and in this case the impact of antimoney laundering regulations. The imminent problem of legislators, regulatory bodies, and supervisory authorities is to keep up with the criminal actors, and their constantly changing ways to operate. This is highlighted in the research by Mugarura (2020), who comments on the importance of regulators understanding the main objective of money laundering, which is to recycle the illegally obtained money into the financial system, with the intent of making it appear legal in the end. Due to criminals seeking out loopholes in the financial systems, countries and sectors with weaker anti-money laundering regulations and prevention systems are an obvious target, according to Mugarura (2020). Thus, is it important for regulators to keep up with the changing money laundering approaches in order to protect the financial system, the economy and the society in the end. This again highlights the importance in understanding if the current regulatory measures taken, have been able to have an impact on the criminal money laundering actions, or if it has created more harm than good in the end. Conclusively based on research discussed above, the question of whether anti-money laundering and terrorism financing regulations have the right impact on society and the financial systems is clearly highlighted. As stated previously, this is raising the need for further research on the impact of anti-money laundering and terrorism financing, and how the assessment of the impact should be further developed for better and relevant results of the regulatory changes. The impact of regulation preventing money laundering and terrorism financing should be positive on many different sections of the society and be able to further promote economic growth, financial development, in addition to not having a negative impact on business, their employees and customers, competition, legal entities, the supervisory authorities, or private citizens. If a positive impact of the anti-money laundering and prevention of terrorism financing regulations cannot be identified, policymakers and regulatory bodies need to conduct a thorough assessment of the situation and relevant legislation to improve their operations. 3.2 Cost-benefit analysis in anti-money laundering regulations The question raised by Saperstein et al. (2015) is, why is there a lack of the costbenefit analysis, since it is not clear if the regulations set by the regulators are actually beneficial in terms of the costs not exceeding the benefits of set regulations. As also Ferwerda (2018) comments, the cost-benefit analysis is a standard in most fields of policy making but is mostly missing in anti-money laundering policies. Saperstein et al. (2015) suggest that in order to regulations to achieve the preferred outcome, the situation could require a specifically adapted cost-benefit analysis. Saperstein et al. (2015) further comment on how researchers have been advocating an existence of the cost-benefit analysis for the purpose of an optimal regulatory system. By lacking an estimation of the benefits and comparing them against the alternative options, Saperstein et al. (2015) state that the regulations are at risk of not being suitable for their purpose and unnecessarily taxing on different parties involved in the anti-money laundering and prevention of terrorism financing work. Even if the purpose of the regulations is of good nature, it does not mean that they are able to create the wanted outcome. As stated by Saperstein et al. (2015), the fact that regulators continue to rely on punishment for the banks in case of lack of compliance with regulations and standards, can result in more harm than good. Saperstein et al. (2015) continue by commenting that legal scholars have been advocating for the cost-benefit analysis for a long time. By requiring a qualitative and quantitative assessment of costs and benefits, regulators would be able to make a better analysis of the impact of their actions and make an individualized assessment of the regulations positive and negative impacts (Saperstein et al. 2015). Hahn (2004) concludes that for systematically assessing details and to get a bigger picture, are quantitative tools useful. Furthermore, can quantitative cost-benefit analysis and cost-effectiveness analysis support regulations in suggestions of eliminating regulation or the need to change regulations according to Hahn (2004). Banks have for example been subjected to liabilities of compliance failures, in addition to huge compliance costs, but the total benefit of these costs remains unclear Saperstein et al. (2015). The research of Geiger and Wuensch (2007) carried out a stylized costbenefit analysis of anti-money laundering laws and regulations. Geiger and Wuensch (2007) give a set of questions to be considered, without making any specific recommendations. Firstly, effectiveness to achieve the set goals should judge the anti-money laundering measures in the financial system based on Geiger and Wuensch (2007) conclusion. Secondly, Geiger and Wuensch (2007) suggest that benefits should be defined related to predicate crime, to fight against the abuse of the financial system by criminals is not an achievable goal. Geiger and Wuensch (2007) continue by stating that a limit for accepted direct costs and collateral damage should be set, and the cost-benefit analysis performed, and alternatives considered. Lastly, Geiger and Wuensch (2007) state that the measure considered, should only be introduced into effect only in the case of the benefits exceeding the costs, since otherwise a burden could be placed on the society and its economy without receiving desired results. Ferwerda (2018) considers two different ways of calculation, the historical approach, and the current approach. The approaches presented by Ferwerda (2018) differ from the historical approach comparing the costs of establishing anti-money laundering policy to the amount of derived benefit from said policy, and the current approach comparing the costs which could be saved if the current anti-money laundering policy was discontinued against the benefits which would thus be lost. Ferwerda (2018) continues by stating how the historical approach could review if setting up anti-money laundering and combating terrorism financing policy actions has been beneficial, and the current approach furthering if the current efforts should be continued or not. Based on interviews and discussions, as well as a literature review, Ferwerda (2018) was able to identify the most significant components of a cost-benefit analysis for anti-money laundering. Ferwerda (2018) lists the costs as follows: ongoing policy making, sanction costs (repressive), financial intelligence unit, supervision, law enforcement and judiciary, duties of the private sector, reduction in privacy, efficiency costs for society and the financial system. Further Ferwerda (2018) lists the benefits as follows: fines (preventive and repressive), confiscated proceeds, reduction in the amount of money laundering, less predicate crimes, reduced damage effect on real economy, less risk for the financial sector. In conclusion does Ferwerda (2018) state that based on their estimations, are the reporting sector and supervisory entities responsible for 84 % of the costs. The basis of this chapter is to present the data and methodology used in this master’s thesis for the purpose of analysing the current anti-money laundering and terrorism financing regulations cost-effectiveness, as well as legislative impact on money laundering and terrorism financing activities. Furthermore, for the analysis and improvement of impact assessments relating to anti-money laundering and terrorism financing legislations. The SRs, sentences, frozen and seized assets are presented, and we show how they have changed over time across the selected Nordic countries. According to Harvey (2008) research was the most reliable measure for the effectiveness evaluation in anti-money laundering and combating terrorist financing legislation, based on suspicious activity reports (SAR), prosecution and asset recovery, thus will the datasets be included in this master’s thesis. The data used in the thesis is based on money laundering activity recorded by the Finnish Financial Intelligence Unit, and from various official statistics available from the other 3 Nordic countries chosen for comparative purposes. The thesis thus uses a quantitative data analysis, to be able to make an assessment on the effectiveness of the regulations. 4.1 Data Description Data on the number of Suspicion Reports (SRs), transactions recorded in the money laundering register, information disclosure, freezing orders, and proceeds of crime, can be found in the annual report of the National Bureau of Investigation’s Financial Intelligence Unit (Rahanpesun selvittelykseskus). Crimes brought to the attention of the authorities in the money laundering category can also be found on the Statistics Finland register. Comparable data sets were acquired by the author through investigation of official statistics for the three other Nordic countries, Sweden, Norway, and Denmark. The data on Swedish SRs can be found in the annual report of the Swedish National Bureau of Investigation’s Financial Intelligence Unit (Finanspolisen). The same data can 4 DATA AND METHODOLOGY be found in the Norwegian National Bureau of Investigation’s Financial Intelligence Unit (Økokrim). Finally, Danish data were acquired from the reports of the Danish National Bureau of Investigation’s Financial Intelligence Unit (Danmarks Finansielle Efterretningsenhed 2023). The data regarding assets recovered for the specified countries can also be found on the respective countries’ annual reports, as well as the Swedish Prosecution Authority’s annual report (Åklagarmyndighetens årsredovisning). The data regarding Finnish sentences regarding money laundering and terrorism financing can be found on Statistics Finland database. The data regarding the Swedish sentences can be found on the Swedish National Council for Crime Prevention (Brå) website, whereas the Norwegian sentences are found on Statistics Norway database. The Danish sentences can be found in the annual report of the Danish National Bureau of Investigation’s Financial Intelligence Unit (Danmarks Finansielle Efterretningsenhed 2023). The exact data sets used in this chapter can be found in tables within APPENDIX 1. 4.1.1 Suspicious activity reports To highlight the importance of suspicious activity reports in the fight against money laundering and terrorist financing, some important factors brought up by Europol in their report on converting financial intelligence into greater operational impact, will be considered before presenting the data of suspicion reports. The Europol (2017) report on converting suspicion to action, states that since 2006 has the average fraction of further investigated suspicious transaction reports (STRs) out of those collected in total not changed from approximately 10 %. The report by Europol (2017) shows how beneficial STRs are in the investigation of money laundering, as well as the overall value of financial intelligence. Europol (2017) further states how financial intelligence is an investigative tool, which provides important information on criminals’ activities, and thus does STR reporting do more than exist as a deterrent. Financial intelligence is also an element in seizures and confiscations according to Europol (2017). Europol (2017) also highlights how cooperation between all involved entities including the public and private sectors, shows benefits in tackling financial crime. Further, re-directing resources of the AML/CFT regime to a more targeted approach could result in greater benefits. When discussing suspicious activity reports, we need to consider the different types of reports obliged entities are required to file a report on to the investigative authority, or other responsible entity. According to the Finnish police (Poliisi 2023) are obliged entities obligated to report suspicious business transactions (SBT). According to the Swedish police (Polisen 2023) are obliged entities required to report SBT’s and make suspicious activity reports (SAR). Based on the annual report of the Norwegian Financial Intelligence Unit’s (Økokrim 2022) are their reports based on received reports on suspicious circumstances (MT). Based on the Danish Financial Intelligence Unit’s annual report (Danmarks Finansielle Efterretningsenhed 2023) is their reporting based on three different categories, suspicious transaction reports (STR) reports of transactions with a possible money laundering suspicion, suspicious activity reports (SAR) reports on suspicious activity, conduct event, which doesn’t include transactions, and terror financing reports (TFR) reports on suspicious transactions such as transaction to and from high-risk countries. Further in this master’s thesis will all of these reports be discussed using the same term: suspicion reports (SR). According to the Finnish Financial Intelligence Unit’s annual report (Keskusrikospoliisi 2023) they received during 2022 a total of 230 171 suspicion reports, and almost 37 % of these were done by cryptocurrency service providers. The number of suspicion reports was the second largest amount ever received during a year. The main service provider categories which reports were received from, were general payment brokerages including currency exchange, credit and financial institutions, and cryptocurrency service providers. According to the annual report (Keskusrikospoliisi 2023) was the number of received suspicion reports in 2022 significantly smaller than the number of 3 692 641 suspicion reports in 2021. Based on the annual report (Keskusrikospoliisi 2021) was the number of suspicion reports in 2020 was 62 041, and in 2019 the number of suspicion reports were 66 460. According to the annual report (Keskusrikospoliisi 2023) is the decrease in suspicion reports between 2021 to 2022 related to the sudden rise in numbers between 2020 and 2021, which was due to 98,35 % being from cryptocurrency service providers. Even though we see a decrease of almost 94 % in the total amount of suspicion reports between 2021 and 2022, is there actually an increase of 271 % between the number of suspicion reports in 2020 and 2022. The data between 2018 and 2015 can be found on the annual reports (Keskusrikospoliisi 2021, 2018). Based on the Swedish Financial Intelligence Unit’s annual report (Polismyndigheten 2023) is it reported that they received 45 113 suspicion reports during 2022, which is slightly over 20 % more than the previous year’s 37 528 number of suspicion reports. 75 % of the suspicion reports in 2022 were received from banks, 15 % from the rest of the financial sector, and 9 % from the gambling sector. The annual report explains this to be mostly due to reports from the banking sector increasing a little over 20 %. Another increase was seen in reports from the gambling sector and explained with an increase in training from the sector. The total increase was 53 % from the number of 24 505 suspicion reports in 2020 to the 37 528 in 2021. The increase between 2019 number of suspicion reports of 21 709 and 2020’s 24 505 was only 13 %, and the rise between the number of 19 306 suspicion reports in 2018 and 2019 was only 12 %. The data on Swedish suspicion reports between 2015 and 2017 can be found on the annual report (Polismyndigheten 2020) of 2019. The Norwegian Financial Intelligence Unit’s annual report (Økokrim 2022) shows that during 2022 did banks, brokers mainly including real estate agents, and payment processing businesses produce 91 % of the year's suspicion reports. Banks produced over 13 600 reports, and both brokers mainly including real estate agents, and payment processing businesses produced over 2 000 reports each. The last 9 % of the reports were produced by other reporting obligated entities. During the past five years the number of reports has been steadily increasing. The number of reports rose 20 % between 2021 and 2022, which was still less than the rise between 2020 and 2021 (equaling 30 %). The previous year it only rose 10 % between 2019 and 2020, and between 2018 and 2019 only 7 %. The total amount of reports in 2022 was 19 783, in 2021 the number was 16 513, in 2020 it was 12 701, in 2019 it was 11 539, and in 2018 the number of SAR’s reports was 10 748. The data for 2016 and 2017 can be found on the trend report by the Norwegian Financial Intelligence Unit (Økokrim 2021). Denmark’s Financial Intelligence Unit shows in their annual report for 2022 (Danmarks Finansielle Efterretningsenhed 2023) that during 2022 they received a total of 89 783 suspicion reports. The largest number of suspicion reports were received from banks, which was 75 % of the total of reports, and from gambling service providers it was 15 % of the total of reports. In 2021 the total number of suspicion reports were 70 449, which was less than the 73 447 number of reports in 2020. The number of reports in 2020 was 37 % higher than in 2019 when the number of received reports were 53 454, and the number in 2019 was 49 % higher than the number 35 768 number of reports received in 2018, based on the annual report of the Danish Financial Intelligence Unit in 2020 (Danmark finansielle efterretningsenhed 2020). The data for number of SRs for 2016 and 2017 are gathered from the Danish financial Intelligence Unit (Danmarks Finansielle Efterretningsenhed 2022) annual report. The total sum of SRs in Finland between 2015 and 2020, in Sweden between 2015 and 2022, and in Norway and Denmark between 2016 and 2022 can be seen in Figure 3 below. Finland has been excluded for 2021 and 2022 from Figure 3 due to the number of SRs being so high, that the other years and countries would not be seen clearly. SRs between 2021 and 2022 including all four countries, are instead presented in the Figure 4. When looking at Figure 3 and Figure 4, it can be seen that Finland has the largest reported numbers of SRs except for in 2020, where Denmark has over 10 000 more SRs than Finland. The lowest number of SRs can consistently be seen for Norway, where the number has made only a slow increase each year. For Sweden the number of SRs can be seen to steadily increase each year, and the same applies to Denmark (except for 2021 when, the number decreased slightly). For Finland the number fluctuates more from year to year. The SRs of Sweden, Norway, and Denmark have been mostly making a steady increase during the years, whereas Finland’s numbers are more varying each year with declines and increases, but the longer 8-year data shows an increasing overall trend. An important remark to note regarding the SR’s is the spike between the Finnish SR numbers between 2018 and 2019, which could be linked to the Danske Bank money laundering scandal in 2018 (SVT 2023). The same could be pointed out for the Swedish SR numbers increase between 2019 and 2020, after the Swedbank money laundering scandal in 2019 (SVT 2023). It could be argued that these money laundering scandals of banks may have affected the numbers of SR’s due to banks and other supervised entities increasing their AML actions and with their, know your customer (KYC) and customer due diligence work, to avoid another money laundering scandal. Figure 3 SRs for Sweden, Norway, and Denmark, Finland Figure 4 SRs for 2021-2022 in Finland, Sweden, Norway, and Denmark 4.1.2 Sentences in relation to Money laundering According to Statistics Finland database13 there were in 2018 a total of 284 sentences in Finland by district court and offense (district courts and courts of appeal 13 https://pxdata.stat.fi/PxWeb/pxweb/en/StatFin/StatFin__syyttr/statfin_syyttr_pxt_13r7.px/ 13r7 -- Sentences by district court and offence (district courts and courts of appeal as first court instance), 2018-2022, Information: Number of penalties, Year: 2022-2018, Court: Total, Principal offence: Money laundering 32:6§1/1-2 / Attempted money laundering 32:6§2 / Aggravated money laundering 32:7§1/1-2 / Attempted aggravated money laundering 32:7§2 / Conspiracy for the commission of aggravated money as first court instance), in the following categories: Money laundering 32:6§1/1- 2, Attempted money laundering 32:6§2, Aggravated money laundering 32:7§1/1- 2, Attempted aggravated money laundering 32:7§2, Negligent money laundering 32:9§, and Money laundering violation 32:10§. In 2019 the number of total sentences was 309, in 2020 256, in 2021 343, and in 2022 379. Between 2018 and 2022 does Money Laundering sentences cover between 55 % and 63 % of the total number of sentences. Figure 5 Money laundering sentences in Finland 2018–2022 In Figure 6 the money laundering offences known to authorities which include Police, customs or border guard, and offences solved in Finland 2013– 202214. There can be seen a clear increase in both the offences known to authorities and the offences solved between the years presented. laundering 32:8§ / Negligent money laundering 32:9§ / Money laundering violation 32:10§, Sentence: Persons sentenced in court (number). 14 https://pxdata.stat.fi/PxWeb/pxweb/en/StatFin/StatFin__rpk/statfin_rpk_pxt_13gw.px/ 13gw -- Offences recorded and their solving by offence heading according to the investigating authority, 2006-2023, Information: Offences known to the authorities (number)/Solved offences total (number), Year: 2022-2006, Offence heading: Money laundering 32:6§1/1-2 / Attempted money laundering 32:6§2 / Aggravated money laundering 32:7§1/1-2 / Attempted aggravated money laundering 32:7§2 / Conspiracy for the commission of aggravated money laundering 32:8§ / Negligent money laundering 32:9§ / Money laundering violation 32:10§ / Violation of the obligation to report money laundering (503/2008). Figure 6 ML offences known and solved in Finland 2013–2022 In Figure 7 presented below the persons sentenced in court13 and the imputable offences15 in court relating to money laundering in Finland between 2018 and 2022 can be seen. The imputable offences are according to the Finnish Financial Intelligence Unit report on money laundering crimes in legal practice (Keskusrikospoliisi 2022) an offence where evidence of a pre-crime has been shown by the prosecutor, even though details of the crime or the perpetrator cannot be found out. Further, the funds can be found to have originated from criminal activity, so there wouldn’t be any reasonable doubt of an illegal origin. Based on this these imputable offences are used in the analysis to represent the prosecutions. Presented in Table 14 the turnover rate of imputable offences in court to persons sentenced in court between 2018 and 2022 can be seen. The rate varies between 49 % and 65 %. 15 https://pxdata.stat.fi/PxWeb/pxweb/en/StatFin/StatFin__syyttr/statfin_syyttr_pxt_13r7.px/ 13r7 -- Sentences by district court and offence (district courts and courts of appeal as first court instance), 2018-2022, Information: Number of penalties, Year: 2022-2018, Court: Total, Principal offence: Money laundering 32:6§1/1-2 / Attempted money laundering 32:6§2 / Aggravated money laundering 32:7§1/1-2 / Attempted aggravated money laundering 32:7§2 / Conspiracy for the commission of aggravated money laundering 32:8§ / Negligent money laundering 32:9§ / Money laundering violation 32:10§, Sentence: Imputable offences in court (number). Figure 15 ML frozen assets in Sweden In Figure 16 are the number of asset freezing orders in Sweden between 2015 and 2022 presented. A clear increase is seen between 2016 and 2021, whereas a 69 % decline is found between 2021 and 2022. Figure 16 Number of ML freezing orders in Sweden Figure 17 presents the amount of frozen assets and the number of freezing orders in Sweden between 2015 and 2022 presented. Though it is important to remember that the amount of frozen assets can be high in one case and low in another, due to which the number of freezing orders can be seen to be higher in 2021 than in 2020, but the amount of frozen assets lower in 2021 than in 2020. Figure 17 ML frozen assets and number of freezing orders in Sweden In the Figure 18 below the number of asset seizure orders in Sweden is only presented for the time period between 2015-2019, due to the Swedish Prosecution Authority’s annual report not itemizing the asset seizure orders, and thus the data cannot be used for 2020-2022. Figure 18 Number of ML asset seizure orders in Sweden Regarding the data relating to frozen and seized assets for Norway, was data only found for seized assets between 2020 and 2022 seen below in Figure 19. The data are based on the Norwegian National Bureau of Investigation’s Financial Intelligence Unit annual report (Økokrim 2022). As mentioned in the annual report, the high number in 2020 is related to a judgment in which confiscation of NOK 825 million was imposed. It should also be noted that the amount for 2022, is based as of 24th of April 2023. The amount might still change due to more judgments becoming legally enforceable. This clearly shows the importance of knowing the number of cases and not only looking at the amount of assets, and how the amount of assets might vary case by case. To note, the frozen assets were not found regarding Norway, neither were the number of freezing or seizure orders available for Denmark. Figure 19 Amount of seized assets in NOK 2020-2022 in Norway The relationship between SRs and sentences of Finland can be seen in Figure 20 below. Of course, the extremely high number of SRs in 2021 makes it difficult to see the actual relationship between the Finnish SRs and Sentences. Figure 21 below excludes the two largest SR values and confirms that the numbers of sentences are extremely low in relation to the number of SRs. Figure 20 SR’s and Sentences in Finland between 2015-2022 Figure 21 SRs 2015-2020 and Sentences 2015-2022 in Finland When looking at Figure 22 below, we see the SRs and sentences in Sweden between 2015 and 2022. Here we see that the number of sentences is rising, and clearly during the last three years in relation to the rising number of SRs. 0 500000 1000000 1500000 2000000 2500000 3000000 3500000 4000000 2015 2016 2017 2018 2019 2020 2021 2022 SR & Sentences in Finland SR Sentences Figure 22 SRs and Sentences in Sweden between 2015-2022 When looking at Figure 23 below, we see the SRs and sentences in Norway, where no significant rise in sentences can be found, even though an even rise of SRs can be seen. Figure 23 SRs and Sentences in Norway between 2015-2022 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 2015 2016 2017 2018 2019 2020 2021 2022 SR & Sentences in Sweden SR Sentences 0 5000 10000 15000 20000 25000 2015 2016 2017 2018 2019 2020 2021 2022 SR & Sentences in Norway SR Sentences When looking at Figure 24 below, we see the SRs and sentences in Denmark between 2016 and 2022. Here we see that the number of sentences clearly rise in relation to the SRs during 2022. Figure 24 SRs and Sentences in Denmark between 2016-2022 SR’s turnover rate to sentences is presented in Table 14 below. As seen, Finland does not reach even 1 % during the considered years, and the rate actually declines each year, which can be connected to the large increase in SRs, whereas the sentences hold quite steady with minor fluctuations between the years. Even though Sweden’s SRs are on a steady incline, so are their sentences. It can be stated that the Swedish sentences are increasing with a higher rate than the Swedish SRs, since the turnover rate is steadily increasing during the years, reaching almost 4 % in 2022. Both Norway and Denmark are mostly comparable to Finland with under a 1 % turnover rate, expect for Denmark in 2022. A steady increase in Denmark’s SRs, but a staggering increase in sentences during 2022, has increased the turnover rate of 2022 to over 3 %. Table 14 Turnover rate of SR’s to Sentences 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000 2016 2017 2018 2019 2020 2021 2022 SR & Sentences in Denmark SR Sentences Finland Sweden Norway Denmark 2015 0,82 % 2016 0,75 % 0,19 % 2017 1,22 % 0,49 % 2018 0,72 % 1,35 % 0,39 % 0,00 % 2019 0,46 % 2,83 % 0,27 % 0,05 % 2020 0,41 % 3,57 % 0,26 % 0,04 % 2021 0,01 % 3,41 % 0,35 % 0,70 % 2022 0,16 % 3,72 % 0,42 % 3,03 % Table 15 Turnover rates in Finland Presented in Table 15 above we can see how the turnover rate of imputable offences to sentences where the rate varies between 49 % and 65 %. The rate can be seen to decline each year, even though both the number of imputable offences and sentences has mostly been increasing, meaning that the number of sentences has been increasing slower than the number of imputable offences. We can also see the turnover rate from SRs in Finland into imputable offences stays below 1 % except for in 2018 when it’s just below 1,20 %. The extremely high number of SRs in 2021 causes the turnover rate into imputable offences to decline from the previous years to a very low 0,02 %. The turnover rate table is created based on Harvey (2008), showing turnover from imputable offences in court to then actual persons sentenced in court. 4.2 S Statistical tests Within this subchapter null hypotheses for the relevant data sets are tested in R (R Core Team 2021). Due to the limited number of years for which data for SR’s, sentences, frozen and seized assets, imputable offences, were available for the Nordic countries, it is not meaningful to do a quantitative analysis of their relationships. The shortage of data as well as the outlier observations discussed above, would make statistical tests of relationships, such as correlation, difficult to interpret properly. However, as annual Finnish data of offences known to the authorities, as well as the offences solved, were available for the years 2006-2022, it was possible to use statistical tests to assess significance of trends. The testing of the existence of monotonic (increasing or decreasing) trend within the offences data sets was done using the Mann-Kendall non-parametric test available in R. The rank correlation coefficient (tau) measuring the monotonicity of the trend in the case of the offences known equals 0.853, indicating is a strong growing trend. The corresponding 2-sided p-value was equal to 2.1458e-06, indicating a high level of statistical significance for the observed trend within the data. The offences known timeseries is plotted in Figure 25. 2018 2019 2020 2021 2022 Imputable offence 466 473 446 584 769 Sentence 284 309 256 343 379 Conversion rate % 61 % 65 % 57 % 59 % 49 % SR's 39 231 66 460 62041 3692641 230171 Imputable offence % SR 1,19 % 0,71 % 0,72 % 0,02 % 0,33 % Figure 25 Timeseries of offences known Similarly, the rank correlation coefficient for the offences solved equals 0.868, and the 2-sided p-value was equal to 1.4305e-06. There is a high level of statistical significance within the trend also for these data. The offences solved timeseries is plotted in Figure 26. Figure 26 Timeseries offences solved Finally, we analysed existence of a trend for the ratio of solved to known offences using the Mann-Kendall test. For this variable the rank correlation coefficient is much weaker and equals -0.147, with 2-sided p-value 0.43383. This result is not statistically significant at the 5% level and suggests that the ratio just fluctuates randomly from year to year. 4.3 Methodology This subchapter presents the research methodology, including the method of analysis of the data used in this thesis. In this thesis AI-based language models have not been used. The empirical methodology for the evaluation of AML legislation effectiveness on reducing money laundering activity used in this thesis is based on Harvey (2008). Harvey (2008) argues that the effectiveness evaluation based on reputation, SRs, prosecution and asset recovery, represents the so-called second-best measure, due to the difficulty in establishing the impact regulation on money laundering activity. The conversion rate of the prosecutions into convictions was used in Harvey (2008), as an indicator of the quality of evidence. Due to the lack on asset recovery data and prosecution data not being available for all the countries studied in this thesis, the focus will be more on the relationship between actual SRs and sentences of the countries. The relationship between SRs, sentences, and asset recovery is clearly relevant to research the effectiveness of anti-money laundering legislation but can’t be used in its entirety as a method in this thesis. Further, these concepts are linked to the criminal economics model by Masciandaro (1999) which presents the viability of criminals to launder money. By using the annual conversion rate estimates, one can attempt to quantify indirectly how “cheap” or “expensive” it is to launder money. This further relates to the regulators’ influence on the money launderers profitability to launder money. For the testing of trend significance in of the relevant data the Mann-Kendall trend test was used. For the purpose of improving the impact assessment within AML/CFT governmental proposals in Finland the cost-benefit analysis method is used. The cost-benefit analysis method measures the strengths and weaknesses of a project, in this case a governmental proposal, where the costs and benefits are weighed against each other to reach the profitability of the proposal. As specified within the guidelines of impact assessments (Valtioneuvosto 2022) should the impact assessment include important effect categories to help identify the relevant financial implications, environmental effects, and other effects on people and society. In the category of financial implications of the guidelines (Valtioneuvosto 2022) is it stated that the evaluation of financial implications of the proposals impact should include households, companies, the public economy, and the national economy. The guideline (Valtioneuvosto 2022) follows up with the key determinable items are the scale of change, size of different target groups, targeting of effects, and the ratio of costs and benefits, which is where the costbenefit analysis comes into importance. This chapter focuses on the results of the data analysis as well as the results of the previous research of the cost-benefit analysis for a better impact assessment. The relevant results of the data analysis can be found in the subchapter 5.1 Effectiveness of AML, whereas the cost-benefit analysis as part of the impact assessment is presented in the subchapter 5.2. Impact assessment framework showing the results of the qualitative research conducted to provide suggestions on the use of the cost-benefit analysis. Within subchapter 5.1 are the research questions 1. Are current anti-money laundering and terrorism financing regulations a cost-effective method for combating money laundering and terrorism financing? and 2. Have there been changes in the frequency of suspicious reports (SRs) over time across the Nordic countries? answered. Further, in subchapter 5.2 is the research question 3. How to use the cost-benefit analysis to improve the Finnish impact assessment? answered. 5.1 Effectiveness of AML This master’s thesis focuses on the effectiveness of anti-money laundering and terrorism financing prevention regulation. Analysing the effectiveness of the regulatory measures imposes difficulties, due to the amount of money laundered cannot be measured, limiting the possibility of knowing the true impact. The actual question can then be stated as whether the regulative measures are cost effective, and further if the measures are significant enough to minimize money laundering and their risks imposed on the society. When analysing the data gathered of Finland, Sweden, Norway, and Denmark, we start by investigating the countries SR data. It is clear that the numbers of SR’s have made a steady increase over the years for all countries. However, Finland’s data set seems to be fluctuating more between the years, while still showing an overall increase over the years. Finland has the largest numbers of SRs across the years, except for in 2020. The extreme difference in the numbers of SRs of Finland and the other analysed countries, could be argued to 5 RESULTS rate of SRs to sentences. This provides motivation for further research to systematically compare the legislative basis of the regulation and the use of investigative resources between the countries to identify areas where Finland might be able to improve its situation. Some limitations of the thesis can be seen in the lack of available longerterm data across the chosen countries, regarding sentences, prosecutions, frozen and seized assets, making the data set narrow and hindering a comprehensive analysis in certain sections of the research. The current FATF Methodology (FATF 2013-2023a) which was originally published in 2013, but includes some amendments over the years, with the latest update expected in June 2023, could upon future review provide new tools for improving anti-money laundering measures. Some sections of the thesis are based on research conducted in different Nordic languages, and the interpretation has been done based on the writer’s understanding of these languages, and when needed verified by translation platforms. Future research on the topic is important to increase the knowledge base on preventative measures for money laundering and terrorist financing. Research on the effectiveness of anti-money laundering legislation in comparison to the results of FATF ratings, could bridge the possible gap between FATF’s measurement of a country’s effectiveness and the results derived through legislative effectiveness research. Another interesting topic, only briefly mentioned within the thesis, is whether there is a factual dependence between money laundering scandals in the Nordic banking sector and the rise in the number of SRs by the reporting entity group. Finally, it would be attractive to make a more comprehensive analysis of regulation effectiveness when considerably more yearly data are available from a large number of countries. REFERENCES Danmark Finansielle Efterretningsenhed. 2020. Årsrapport 2020. Årsrapport fra Hvidvasksekretariatet – Danmark finansielle efterretningsenhed. Statsadvokaten. Danmarks Finansielle Efterretningsenhed. 2022. 2021 Årsrapport fra Hvidvasksekretariatet. Danmarks Finansielle Efterretningsenhed. 2023. Årsrapport. Hvidvasksekretariatet 2022. Politi. Deloitte. 2016. Phase 2 Anti-money laundering reforms. Business Compliance Impacts. Ministry of Justice. Demirgüç-Kunt, A., Klapper, L., Singer, D., & Ansar, A. 2022. The Global Findex Database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World Bank Publications. European Commission. 2017. Better Regulation Guidelines. Commission staff working document. EUR-Lex. European Commission. 2021. Impact assessment. Commission staff working document. EUR-Lex. Europol. 2017. From suspicion to action. Converting financial intelligence into greater operational impact. doi:10.2813/308061 Europol. 2022. Annual Review. doi:10.2813/643651 FATF. 2013. FATF GUIDANCE. National money laundering and terrorist financing risk assessment. Paris: Financial Action Task Force. FATF. 2012-2023. International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, FATF, Paris, France, https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatfrecommendations.html FATF. 2013-2023a. Methodology for Assessing Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems, updated June 2023, FATF, Paris, France, http://www.fatfgafi.org/publications/mutualevaluations/documents/fatfmethodology.html FATF. 2020. Anti-money laundering and counter-terrorist financing measures – Sweden, 1st Regular Follow-up Report & Technical Compliance Re-Rating, FATF, Paris http://www.fatfgafi.org/publications/mutualevaluations/documents/fur-sweden- 2020.html FATF. 2021. Anti-money laundering and counter-terrorist financing measures – Denmark, 3rd Enhanced Follow-up Report & Technical Compliance Re- Rating, FATF, Paris http://www.fatfgafi.org/publications/mutualevaluations/documents/fur-denmark- 2021.html FATF. 2023. Anti-money laundering and counter-terrorist financing measures – Finland, 4th Enhanced Follow-up Report, FATF, Paris https://www.fatfgafi.org/content/fatf-gafi/en/publications/Mutualevaluations/finlandfur-2023.html FATF. 2023a. Anti-money laundering and counter-terrorist financing measures – Norway, 1st Regular Follow-up Report, FATF, Paris https://www.fatfgafi.org/en/publications/Mutualevaluations/FUR-Norway-2023.html FATF. 2024. What we do. Retrieved February 6, 2024, from https://www.fatfgafi.org/en/the-fatf/what-we-do.html FATF, 2024a. The FATF. Retrieved March 6, 2024, from https://www.fatfgafi.org/en/the-fatf.html FATF, 2024b. Mutual Evaluation. Retrieved March 6, 2024, from https://www.fatf-gafi.org/en/topics/mutual-evaluations.html FATF, 2024c. FATF Pleary meetings-Chairman’s Summaries. Retrieved April 17, 2024, from https://www.fatf-gafi.org/en/the-fatf/outcomes-of- meetings.html FATF. 2024d. Consolidated table of assessment ratings. https://www.fatfgafi.org/content/dam/fatf-gafi/Global-Network/4th-Round- Ratings.pdf.coredownload.inline.pdf Financial Conduct Authority. 2024. How we analyse the cost and benefits of our policies. https://www.fca.org.uk/publication/corporate/how-we- analyse-costs-benefits-policies-2024.pdf Ferwerda, J. 2009. The economics of crime and money laundering: does antimoney laundering policy reduce crime?. Review of Law & Economics, 5(2), 903-929. Ferwerda, J. 2018. The effectiveness of anti-money laundering policy: a costbenefit perspective. The Palgrave Handbook of Criminal and Terrorism Financing Law, 317-344. Finansdeparementet. 2022. Bättre konsekvensutredningar DS 2022:22. Regeringskansliet. https://www.regeringen.se/contentassets/558808f67cd74545bd2e5b832c3 5dbb9/battre-konsekvensutredningar-ds-202222.pdf Finansinspektionen. 2023. Penningtvätt. https://www.fi.se/sv/bank/penningtvatt/ Finanstilsynet. 2023. Hvidvask - love, bekendtgørelser og vejledninger. https://www.finanstilsynet.dk/lovgivning/lovsamling/hvidvask Read: 17.4.2024 Finanstilsynet. 2023a. Laws and regulations which apply to all entities under supervision. https://www.finanstilsynet.no/en/laws-and- regulations/laws-and-regulations-which-apply-to-all-entities-under- supervision/ Read: 17.4.2024 Geiger, H., & Wuensch, O. 2007. The fight against money laundering: An economic analysis of a cost-benefit paradoxon. Journal of Money Laundering Control, 10(1), 91-105. Hahn, R. W. 2004. The economic analysis of regulation: A response to the critics. U. Chi. L. Rev., 71, 1021. Hallituksen esitys HE 236/2021 vp. 2022. Hallituksen esitys eduskunnalle laeiksi rahanpesun ja terrorismin rahoittamisen estämisestä annetun lain ja finanssivalvonnasta annetun lain 3 ja 20 b §:n muuttamisesta. Harvey, J. 2004. Compliance and reporting issues arising for financial institutions from money laundering regulations: a preliminary cost benefit study. Journal of Money Laundering Control, 7(4), 333-346. Harvey, J. 2008. Just how effective is money laundering legislation?. Security Journal, 21, 189-211. Hendriyetty, N., & Grewal, B. S. 2017. Macroeconomics of money laundering: effects and measurements. Journal of Financial Crime, 24(1), 65-81. HM Treasury. 2022. Impact Assessment (IA) https://assets.publishing.service.gov.uk/media/62d00548e90e071e7e59c8 f2/20220713_MLRs_SI_Impact_Assessment_-_Final_Stage_updated_.pdf Hyttinen, T. 2021. Rahanpesun torjunta on Kallista mutta tehotonta. Helsingin Sanomat. Retrieved July 17, 2023, from https://www.hs.fi/mielipide/art- 2000008167704.html Kemal, M. U. 2014. Anti-money laundering regulations and its effectiveness. Journal of Money Laundering Control, 17(4), 416-427. Keskusrikospoliisi. 2018. Vuosikertomus Rahanpesun selvittelykeskuksen vuosikertomus 2017. Limited availability Keskusrikospoliisi. 2021. Vuosikertomus Rahanpesun selvittelykeskus 2020. Retrieved November 19, 2023, from https://poliisi.fi/documents/25235045/67733116/2020-Rahanpesun- selvittelykeskus-vuosikertomus-2020.pdf/e340331f-f04c-7eec-2756- 111628ae368a/2020-Rahanpesun-selvittelykeskus-vuosikertomus- 2020.pdf?t=1617010848853 Keskusrikospoliisi. 2022. Rahanpesurikokset oikeuskäytännössä −Törkeät rahanpesutuomiot Helsingin hovioikeudessa 2019-6/2022. Keskusrikospoliisi, Tiedusteluosasto, Rahanpesunselvittelykeskus. Retrieved April 11, 2024, from https://poliisi.fi/documents/25235045/67733116/Rahanpesurikoksetoikeuskaytannossa-2022.pdf/9be02a70-70d0-2e28-edb2- f64fdb25ecd5/Rahanpesurikokset-oikeuskaytannossa- 2022.pdf?t=1669617362516 Keskusrikospoliisi. 2022a. Vuosikertomus Rahanpesun selvittelykeskus 2021. Retrieved November 19, 2023, from https://poliisi.fi/documents/25235045/67733116/Vuosikertomus- Rahanpesun-selvittelykeskus-2021.pdf/0772e42d-776d-992c-96cc- 3a22d3e0f365/Vuosikertomus-Rahanpesun-selvittelykeskus- 2021.pdf?t=1654673945126 Keskusrikospoliisi. 2023. Rahanpesun selvittelykeskuksen vuosikertomus 2022. Retrieved November 1, 2023, from https://poliisi.fi/documents/25235045/67733116/Rahanpesunselvittelykeskuksen-vuosikertomus-2022.pdf/d4d07605-68b5-ee84-ffd7- ec09541dc9d7/Rahanpesun-selvittelykeskuksen-vuosikertomus- 2022.pdf?t=1679478208148 Koligkionis, C. 2017. Money laundering and the role of offshore financial centres. Crime In Crisis: site. URL: http://crime-in-crisis.com/en/wpcontent/uploads/2017/06/66-KOLIGKIONIS-KOURAKIS- FS_Final_Draft_26.4.17.pdf LexisNexis. 2017. Risk Solutions, The true cost of anti-money laundering compliance, Survey report, European Edition. Masciandaro, D. 1999. Money laundering: the economics of regulation. European Journal of Law and Economics, 7, 225-240. Masciandaro, D. 2007. Economics of money laundering: A primer. Paolo Baffi Centre Bocconi University Working Paper, (171). McFadden, M., O’Flaherty, M., Boreham, P., & Haynes, M. 2014. Targeting the profits of illicit drug trafficking through proceeds of crime action. National Drug Law Enforcement Research Fund (NDLERF). Ministry of Justice. 2017. Cost Benefit Analysis: AML Phase 2. New Zealand Government. Ministry of justice. 2022. Report on the review of the anti-money laundering and countering financing of terrorism act 2009. New Zealand Government. Mugarura, N. 2020. Anti-money laundering law and policy as a double edged sword. Journal of Money Laundering Control, 23(4), 899-912. Norway and the EU, 2022. The EEA Agreement. Mission of Norway to the EU. Retrieved October 11, 2023, from https://www.norway.no/en/missions/eu/areas-of-cooperation/the-eea- agreement/ Ofoeda, I. 2022. Anti-money laundering regulations and financial inclusion: empirical evidence across the globe. Journal of Financial Regulation and Compliance, 30(5), 646-664. https://doi.org/10.1108/JFRC-12-2021-0106 Ofoeda, I., Agbloyor, E.K., Abor, J., & Osei, K. 2020. Anti-money laundering regulations and financial sector development. International Journal of Finance & Economics, 27(4), 4085-4104. https://doi.org/10.1002/ijfe.2360 Ofoeda, I., Agbloyor, E., & Abor, J. Y. 2022. Financial sector development, antimoney laundering regulations and economic growth. International Journal of Emerging Markets, (ahead-of-print). Pol, R. F. 2020. Anti-money laundering: The world's least effective policy experiment? Together, we can fix it. Policy design and practice, 3(1), 73-94. Poliisi, 2023. Money laundering. Retrieved November 19, 2023, from https://poliisi.fi/en/money-laundering Poliisi, 2023a. Rahanpesu. Retrieved October 25, 2023, from https://poliisi.fi/rahanpesu Polisen. 2023. Finanspolisen. Retrieved November 19, 2023, from https://polisen.se/om-polisen/polisens-arbete/finanspolisen/ Polisen. 2023a. Nationell lagstiftning. Retrieved October 31, 2023, from https://polisen.se/om-polisen/samordning-mot-penningtvatt-och- finansiering-av-terrorism/regelverk-och-praxis/nationellt/ Polisen. 2023b. Samverkan mot penningtvätt och finansiering av terrorism. Retrieved October 31, 2023, from https://polisen.se/ompolisen/samordning-mot-penningtvatt-och-finansiering-av-terrorism/ Polismyndigheten. 2020. Finanspolisens årsrapport 2019. Polisen. Retrieved January 28, 2024, from https://polisen.se/siteassets/dokument/polisensarsredovisning/fipos-arsrapport/finanspolisens_arsrapport_2019.pdf Polismyndigheten. 2023. Finanspolisens årsrapport 2022. Polisen. Retrieved January 28, 2024, from https://polisen.se/siteassets/dokument/finanspolisen/arsrapporter/bq_ pol111_ar_finanspolisen_se_2022_ta_pf.pdf Prime minister’s office. 2016. Research: Cost-benefit analysis should be used more widely in assessing success of legislative projects. Government Communications Department. Retrieved May 30, 2024, from https://valtioneuvosto.fi/en/-/research-cost-benefit-analysis-should-be- used-more-widely-in-assessing-success-of-legislative-projects R Core Team. 2021. R: A language and environment for statistical computing. R Foundation for Statistical Computing, Vienna, Austria. https://www.R- project.org/ Regeringens proposition 2021/22:251. 2022. Samverkan mot penningtvätt och finansiering av terrorism. Rusanov, G., & Pudovochkin, Y. 2021. Money laundering in the modern crime system. Journal of money laundering control, 24(4), 860-868. Saperstein, L., Sant, G., & Ng, M. 2015. The failure of anti-money laundering regulation: Where is the cost-benefit analysis. Notre Dame L. Rev. Online, 91, 1. Shiman, J. 2021. Turned Down for What? How Anti-Money Laundering Regulation Limits Access to Finance. Yale Journal of International Affairs. Sproat, P. A. 2007. The new policing of assets and the new assets of policing: A tentative financial cost-benefit analysis of the UK's anti-money laundering and asset recovery regime. Journal of Money Laundering Control, 10(3), 277- 299. Sproat, P. A. 2023. Is the UK’s anti-money laundering regime “worth the candle”? A tentative cost-benefit analysis. Journal of Money Laundering Control. DOI 10.1108/JMLC-02-2023-0027 SVT. 2023. Detta har hänt: Penningtvättskandalen i Swedbank. Retrieved April 17, 2024, from https://www.svt.se/nyheter/inrikes/penningtvattskandalen-i-swedbank Unger, B., Addink, H., Walker, J., Ferwerda, J., Van den Broek, M., & Deleanu, I. 2013. Project ‘ECOLEF’: The economic and legal effectiveness of antimoney laundering and combating terrorist financing policy: Final report. Utrecht University. Valtioneuvosto. 2022. Lainvalmistelun vaikutusarviointiohje. Valtioneuvoston julkaisuja 2022:66. http://urn.fi/URN:ISBN:978-952-383-922-9 Valtioneuvoston kanslia. 2021. Lainsäädännön arviointineuvoston lausunto valtiovarainministeriölle hallituksen esityksen luonnoksesta rahanpesun ja terrorismin rahoittamisen estämisestä annetun lain ja finanssivalvonnasta annetun lain muuttamisesta. https://vnk.fi/documents/10616/60760300/Lains%C3%A4%C3%A4d%C 3%A4nn%C3%B6n+arviointineuvoston+lausunto+valtiovarainministeri% C3%B6lle+hallituksen+esityksen+luonnoksesta+rahanpesun+ja+terrorism in+rahoittamisen+est%C3%A4misest%C3%A4+annetun+lain+ja+finanssiv alvonnasta+annetun+lain+muuttamisesta.pdf/6e895078-9cb1-4ee4-e4ea- 99c0c6e98e1e/Lains%C3%A4%C3%A4d%C3%A4nn%C3%B6n+arviointin euvoston+lausunto+valtiovarainministeri%C3%B6lle+hallituksen+esityks en+luonnoksesta+rahanpesun+ja+terrorismin+rahoittamisen+est%C3%A4 misest%C3%A4+annetun+lain+ja+finanssivalvonnasta+annetun+lain+mu uttamisesta.pdf?version=1.0&t=1637742025614&download=true Økokrim. 2021. Trendrapport. Enheten for finansiell etterretning. Retrieved January 27, 2024, from https://img8.custompublish.com/getfile.php/5020147.2528.tkpt7baqwm nzq7/Trensrapport.pdf?return=www.okokrim.no Økokrim. 2022. Årsrapport 2022. Nøkkelinformasjon og måloppnåelse i 2022. Åklagarmyndigheten. 2017. Åklagarmyndighetens årsredovisning 2017. Retrieved January 27, 2024, from https://www.aklagare.se/globalassets/dokument/planering-och- uppfoljning/arsredovisningar/arsredovisning-2017.pdf Åklagarmyndigheten. 2018. Åklagarmyndighetens årsredovisning 2018. Retrieved January 28, 2024, from https://www.aklagare.se/globalassets/dokument/planering-och- uppfoljning/arsredovisningar/arsredovisning-2018.pdf Åklagarmyndigheten. 2019. Åklagarmyndighetens årsredovisning 2019. Retrieved January 28, 2024, from https://www.aklagare.se/globalassets/dokument/planering-och- uppfoljning/arsredovisningar/arsredovisning-2019.pdf APPENDIX 1: DATA SETS Table 16 SRs numbers per country and year SRs 2015 2016 2017 2018 2019 2020 2021 2022 Finland 37 703 31 194 48 318 39 231 66 460 62 041 3 692 641 230 171 Sweden 10 170 13 322 16 551 19 306 21 709 24 505 37 528 45 113 Norway 8 780 8 901 10 748 11 539 12 701 16 513 19 783 Denmark 18 671 24 911 35 769 53 481 73 447 70 449 89 783 Table 17 Money Laundering Sentences in Finland 2018–2022 Sentences 2018 2019 2020 2021 2022 Money laundering 156 180 145 206 240 Attempted money laundering 0 0 2 3 1 Aggravated money laundering 66 54 55 60 62 Attempted aggravated money laundering 1 1 0 0 0 Negligent money laundering 50 56 44 60 54 Money laundering violation 11 18 10 14 22 Total 284 309 256 343 379 Table 18 Money laundering imputable offenses in Finland 2018–2022 Crime nomenclature 2018 2019 2020 2021 2022 Money laundering 286 290 256 382 556 Attempted money laundering 1 2 5 5 2 Aggravated money laundering 75 63 70 67 77 Attempted aggravated money laundering 2 1 0 0 2 Conspiracy for the commission of aggravated money laundering - - - - - Negligent money laundering 71 71 68 89 73 Money laundering violation 31 46 47 41 59 Total 466 473 446 584 769 Table 19 ML offences known and solved in Finland 2006-2022 2006 2007 2008 2009 2010 2011 2012 2013 2014 Offences known to the authorities 73 77 79 63 105 106 225 179 208 Offences solved 66 61 68 62 104 131 181 127 219 2015 2016 2017 2018 2019 2020 2021 2022 Offences known to the authorities 172 368 468 426 452 594 700 926 Offences solved 242 291 456 406 353 492 680 623 Table 20 Money laundering sentences in Sweden 2018-2022 Sentences 2015 2016 2017 2018 2019 2020 2021 2022 § 3 Money laundering offence 19 31 86 116 347 444 793 1 149 § 4 Money laundering offence 23 35 46 42 63 117 119 117 Section 5 Money laundering crime, serious crime 32 20 41 53 73 144 152 167 § 6 Money laundering misdemeanour 7 13 20 42 102 137 143 169 § 7 Money laundering 2 1 9 8 29 34 73 77 Total 83 100 202 261 614 876 1 280 1 679 Table 21 Money laundering sentences in Norway Sentences 2015 2016 2017 2018 2019 2020 2021 2022 Money laundering 14 6 24 11 14 9 17 32 Aggravated money laundering 20 11 20 31 17 24 41 51 Total 34 17 44 42 31 33 58 83 Table 22 Money laundering sentences in Denmark 2019-2022 Sentences 2018 2019 2020 2021 2022 Money laundering 1 1 11 364 895 Aggravated money laundering 0 26 20 129 1 821 Total 1 27 31 493 2 716 Table 23 ML frozen and seized assets in Finland 2018 2019 2020 2021 2022 Frozen assets € 5 265 055 9 793 455 7 497 526 11 612 677 5 317 885 Seized assets € 2 310 995 4 945 685 4 606 373 3 049 004 1 665 239 Seized assets % 43,89 50,50 61,44 26,26 31,31 Number of Freezing orders 54 73 126 114 94 Average of frozen € assets per number of freezing orders 97 501,02 € 134 156,92 € 59 504,17 € 101 865,59 € 56 573,24 €