Reported by Thomas Bock, Fernanda Barroso, and David Lewis

(Summary version featured below)

The 2024 global election cycle has been pivotal, with countries representing over three-quarters of the world’s population participating in elections. These political transitions are poised to significantly influence financial crime regulation and enforcement. The financial integrity of election campaigns, candidates, and political parties has come under increased scrutiny, with scandals and allegations around campaign financing featuring prominently. This heightened focus reflects a global demand for transparency and accountability in electoral systems.

Political shifts resulting from these elections can lead to substantial changes in how governments manage financial crime, including offenses such as fraud, money laundering, sanctions evasion, bribery, corruption, terrorist financing, tax evasion, and cybercrime. Changes in administration may result in either tougher or more lenient regulations and enforcement, influenced by economic conditions and political agendas. Businesses require certainty and assurance that they are operating in environments with high standards of integrity and rule of law.

Sanctions regimes are particularly susceptible to changes in political leadership. For instance, a second Trump administration could alter the focus of U.S. sanctions, potentially adopting a tougher stance on security concerns with Iran and trade relations with China, while taking a different approach to the Russia-Ukraine conflict. Such shifts would necessitate financial institutions to adapt swiftly to new sanctions landscapes, emphasizing the need for flexible and dynamic compliance systems.

The role of artificial intelligence (AI) in combating financial crime is also under the spotlight. Regulatory approaches to AI vary considerably and may evolve as a result of recent elections. As AI becomes a critical tool in addressing financial crime challenges, businesses must stay informed about regulatory developments to balance security and innovation effectively.

Read full report: https://www.kroll.com/en/insights/publications/elections-financial-crime-navigating-2024-shifting-landscape