Money launderers and tax havens: Two sides of the same coin?

▶ This paper investigates whether tax havens have an incentive to maintain low regulatory standards on money laundering. ▶ The results indicate that tax haven and money laundering services coincide within the same country. ▶ This effect is especially observable for regulative instruments which increase the probability of detecting money laundering. ▶ In the case of punitive regulation for money laundering the complementary relationship is weaker. ▶ Especially poorer tax havens have an incentive to provide lax regulation standards.