Write about the MONEY LAUNDERING and answer the following question: Concept / forms / effect / role of banks in it / role of the governments / should it be introduced in educational courses? / can be stopped? Introduction Money laundering (ML) is a method of hiding the origins and ownership of money earned though criminal activities…
Furthermore, the ML does not have to involve physical exchange of money or currency. Modern concept therefore considers a transaction or formation of relationship to be a case of money laundering if it involves any form of property or benefit, tangible or intangible earned through criminal activity which includes tax evasion. ML does not necessarily require movement of criminal proceeds for being laundered. Thus, financial institutions especially banks can easily get involved in money laundering process when money earned in a legitimate activity and deposited into a bank account in another country by a person becomes a laundered money assumed as done with the connivance of the bank if he fails to declared the earnings in his tax return in the country in which it has been earned and the bank also fails to report it as s suspicious activity (Hopton 2009). The USA Office of the Comptroller of the Currency (OCC) has defined money laundering as “the criminal practice of filtering ill-gotten gains” or “dirty” currency through a sequence of dealings, so the currency is “cleaned” to appear as if earned by lawful conduct (McClean 2007). Criminals resort to money laundering to legitimise substantial portion of their ill-gotten wealth as otherwise they cannot put it to use. Moreover, they do not need the entire money for their ongoing criminal ventures. They are motivated to launder their tainted money in order to have respectful postitions in society by investing the money so earned in respectable avenues. The proceeds of crime were once said to channel through launderettes in the USA to enable the actual notes to be offered as lawful commercial income, thus earning the expression “Money Laundering” (McClean 2007). Money Laundering process It involves three stages as per the tradition. First, placement of funds of criminal origin in to the financial system through direct or indirect means. Second, resorting to layering by which receipt of criminal proceeds are blurred through creation of layers of financial transactions with the object of hiding the audit trail and providing anonymity. Third, after successful layering, integration process pumps the laundered money into the mainstream economy so as to make them appear as funds received during the course of business. These stages are subtle in that they more often overlap or take place simultaneously (Hopton 2009). The Financial Action Task Force (FATF) FATF is autonomous body representing various governments and entrusted with introduction of measures to ensure against ML and providing funds for terrorism using the global financial system. The recommendations of FATF are required to be implemented to counter money laundering and considered as the standard for anti-money laundering (AML) and counter-terrorist financing (CTF) (FATF 2010). Financial Industry Regulatory Authority (FINRA) FINRA is the autonomous regulatory body of the USA governing activities of securities firms in the United Sates. Anti-money laundering compliance program of FINRA requires each member to develop anti-money laundering program so designed as to monitor the member’s compliance with the requirements of the Bank Secrecy Act (31 USC) (FINRA n.d.). Suspicious Activity Report (SAR) Suspicious Activity Reporting is the requirement to be complied with by all financial institutions such as banks, credit unions, brokers or dealers in securities ...
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78). These monies needed a way in which they were going to be presented as legitimate in order to avoid speculation from the government. The most common way that they made their money look legitimate was from the purchase of outwardly legitimate businesses that dealt in cash.
The author states that the government and various financial institutions have made significant efforts of preventing and detecting and fraud issues. This is when making transactions issues that involve dirty money. Corruption is a moral impunity that involves embezzlement of funds and bribery issues.
[Your full name] [Instructor’s name] [Course name and code] December 8, 2011 Money Laundering Introduction According to the Article 1 of the 1990 European Communities (EC) Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (Council of Europe), the term money laundering is defined as: The conversion or transfer of property, knowing that such property is derived from serious crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in committing such an offence or offences to evade the legal consequences of his action, and the concealment or disguise of the true nature, source, location,
Money laundering is the result of various illegal activities. For example, across the US-Mexico border the drug trafficking business and illegal cash transfers from the US to Mexico is estimated at somewhere between $19 and $29 each year. It is difficult and cumbersome to understand how and in what way this cash is collected and delivered.
Money laundering needs to be understood by all those involved in the financial system.
Money laundering is defined as a process which a criminal engages in a series of financial transactions that attempt to hide the origin and ownership of property obtained by illegal acts in an attempt to increase assets under the disguise of legal sources.
The 1990 convention was modeled on the forum of FATF developed by the G-7 countries, but over the years with increasing developments in the tools for fighting money laundering the convention has become increasingly inadequate.
The need for rectification has forced the member states into revisiting the convention and drawing up a protocol that would adapt the effective features of the 1990 convention combined with recent developments in line with current requirements of sophisticated technology and vulnerability of the non financial sector against money laundering.
Criminals and terrorist organisations have a need for hiding funds acquired illegally through morally repugnant means and terrorist organisations need to launder money to hide their sources of finance to ensure that their operatives receive funding without raising
This crime is committed by the drug dealers, Big business men, Politicians, Illegal sales of arms, smuggling, corrupt officials, Mafia and private individuals and even states. This whole concept is basically the conversion of black money
First of all, it is vital that the concerned organizations put in place measures that can identify apprehensive activities that may be related to money laundering. Such measures would include ability to detect suspicious practices especially in the banks that would
The coverage of the predicate offense of money laundering in many countries such as United States has been expanded to include all crimes, which seek to launder criminal proceeds. Money laundering comprises of the following undertakings:
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