Global AML and CFT Governance: Doctrinal Analysis of Hard Law, Soft Power, and the Sovereignty Clash to Reshape Frameworks

The counter-terrorist financing (CFT) and the anti-money laundering (AML) regime is one of the broadest systems of global regulatory governance which integrates commitments in the form of binding treaties, soft law standards, and transnational networks of enforcement. This paper follows its development since the disjointed structure of the 1980s to the modern day issues of digital finance. It shows that AML/CFT governance is a hybrid order, which combines hierarchical treaties, FATF soft law, regulatory networks, and reputational incentives, through doctrinal analysis of the Vienna Convention (1988), Palermo Convention (2000), UNCAC (2003), and the International Convention of the Suppression of the Financing of Terrorism (1999). Even though financial action taskforce (FATF) does not have a formal treaty power, it enjoys de facto normative power due to compliance pressures. Based on FATF mutual evaluation (2013-2024), the article identifies the continuous disparity between technical compliance and operational quality, especially in the developing states, and suggests a model of reform to reconcile the norm diffusion with the ability to substantially enforce the rules.