Aleksandra Kuzior

Department of Applied Social Science,

Silesian University of Technology, Gliwice,

Poland

Aleksandra.Kuzior@polsl.pl

ORCID 0000-0001-9764-5320

Toward tailored AML/CFT strategies: Clustering countries by FATF compliance and effectiveness

Tetiana Vasylieva

Department of Financial Technologies and Entrepreneurship,

Sumy State University, Sumy,

Ukraine

tavasilyeva@ukr.net

ORCID 0000-0003-0635-7978

Lubos Smutka

Faculty of Economics, Department of Management, 

South Bohemian University in Ceske Budejovice,

Czech Republic

lsmutka@ef.jcu.cz,

ORCID 0000-0001-5385-1333

Oumaima Haj Ammar

Faculty of Economics, Széchenyi Istvàn University,

Gyor, Hungary

haj.ammar.oumaima@sze.hu

ORCID 0009-0004-8174-821X

Abstract. Addressing global disparities in Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) compliance and effectiveness is increasingly critical due to escalating financial crime risks. This study aims to identify natural clusters of countries based on their performance in FATF technical compliance and effectiveness assessments, thereby facilitating tailored AML/CFT support strategies. The study utilised hierarchical clustering, Principal Component Analysis (PCA), and ANOVA tests, employing FATF assessment ratings data for Immediate Outcomes (IO1-IO11) and Recommendations (R.1-R.40). Four distinct clusters were identified, highlighting significant variations in AML/CFT compliance and effectiveness. Advanced economies demonstrated high compliance and effectiveness, emphasising the strategic use of technology, cybersecurity, and effective regulatory oversight. Developing and transitional countries exhibited mixed or low performance, reflecting institutional, socio-economic, and governance-related challenges, including weaker institutional frameworks, higher corruption rates, and socio-economic pressures driving financial crime. The research also underscores persistent global challenges in adapting to new technologies and adequately supervising non-financial sectors. These clusters underline the necessity of differentiated, context-specific AML/CFT strategies, emphasising targeted interventions, technology integration, ethical frameworks, and regional cooperation to enhance global financial integrity. Additionally, these findings differ from the FATF’s traditional grouping approach, which typically classifies countries primarily based on risk assessments and geopolitical factors rather than performance-based data analysis.

Received: August, 2024

1st Revision: February, 2025

Accepted: June, 2025

DOI: 10.14254/2071-8330.2025/18-2/13

JEL Classification: H56, F36, K42, O17, G28

Keywords: AML/CFT, FATF compliance, regulatory effectiveness, technical compliance clustering analysis, policy strategy