Got a tricky question? Receive an answer from students like you! Try us!

Anti Money Laundering and Compliance - Essay Example

Only on StudentShare
Pages 6 (1506 words)


Money laundering is the method of converting illegal money into legal tender. This happens when money is obtained through extortion or robbery or drug sales or through any other illegal means. Naturally, money laundering is mostly used by people in illegal business…

Extract of sample
Anti Money Laundering and Compliance

Money laundering is executed in three steps normally. The first one is the placement which involves disposal of the funds obtained illegally through some other means. This is primarily handling cash. The second stage of money laundering is normally called the layering when the cash gets involved in multiple modes of transactions. This would make tracking back money or source a problem and cause confusion in the audit trails. The third stage is the one when the money laundered merges with the normal economy and integrates with the financial system as if it is sourced from normal business. This is normally called the Integration stage. Invariably, at one of the stages, money enters the banks and money laundering could be caught at this point in time.
Money laundering is done using various mechanisms which have their own names. Some are called the 'star burst', when the money is deposited in one account and is immediately distributed to a number of other accounts losing slowly the trace of the money2. The second method employed is called the boomerang. In this method, the deposit is done in one account and then passes on to another account soon after. From there it goes on a third and so on until it comes back to the original account where it started. Countering all these and an innumerable number of other creative methods that are adopted by launderers is certainly a challenge. ...
Download paper
Not exactly what you need?

Related Essays

Schmid compliance
This is a dicey issue. On one hand, the school, since it must make budget cuts, is being forced to eliminate the women’s varsity softball team. Also, one of the mens’ teams is being cut as well, so it would appear that the university is not being unfair in any manner. However, since the school is approximately 50% men and 50% women, and since 39% of women compete in sports, it seems as though the school may have a difficult time making their case for why this program should be cut. On one hand, the womens’ softball team does have less athletes, than say, the womens’ swim team. It would…
2 pages (502 words)
Explain the content and effect of the UK law relating to money laundering
The world estimate for the amount of money involved in money laundering is around US$ 500 billion to US$ 1.5 trillion. This is a huge amount of money by any calculation to the financial systems involved. The problem is grim and the dimensions are enormous and the steps taken to contain this problem are monumental. Added to this is the money got from other countries through corrupt dictators. Chamberlain (2002) describes this scenario and illustrates the "difficulties involved in recovering assets that are the proceeds of grand corruption by politicians and officials who have held high office"…
5 pages (1255 words)
Money Laundering and Smuggling: Border Control and National Security
This essay mostly focuses on national security threats and risks, that could also be in the form of drugs, attacks on the economy, or cyber attacks against the electronic infrastructure. The researcher discusses that one of the key entry points to the system is the national border of the United States. Drugs, currency, and weapons flow across the border and threaten the national security of the country. All of these factors combine to present the scenario where organized crime, terrorist groups, and professional smugglers cooperate for profit or political ideology. Drugs are smuggled into the…
9 pages (2259 words)