However, it is common sight for the law keepers to have a red light burn the moment they find unaccounted money getting passed down somewhere.
Money laundering in today's world happens mostly through the banks. Banks were expected to tighten their money movement specifications. But with the wide open internet all around it becomes tougher for the banks to manage and monitor what is the nature of movement and who is sending what to whom. The following section identifies the various methods adopted by the banks to ensure fair movement of money.
Three points were the money laundering and terrorism related monetary transactions can be identified and monitored are: 1) entry of cash into the financial system 2) transfers to and from financial system and 3) cross border flows of cash. The following processes are adopted by the banks in order to monitor these three and control them:
1. 'Know your customer' rule. This was brought in during the heights of terrorist bombings on the aircrafts that every customer should be known and identified by the financial institutions. This would ensure that the customers are monitored and they are known if there is an uncanny behavior in any it is identified and monitored for further action1. This is for the existing customers.
2. 2. Movement of any transaction over PDS 10000/- in UK and an equivalent in other countries are monitored and suspicious cases are reported to the legal authorities for further action. This is a statutory requirement in most countries and stipulated in UN charter for fighting drug and crime2.
3. For the new customers, a proper identification should be established before any transaction with the intended person is made by a financial institution3. This should be an official identification document like a passport, birth certificate or such other means of identification. If the person is acting on behalf of a company or another person, then the identity of this person on whose behalf the transaction is being done is to be clearly established and identified to the maximum extent possible by the financial institution.
4. All financial institutions and cash dealers should establish a clear internal and hierarchical reporting structure of such occurrences in their office or during the course of their business. This should be implemented and followed up on a daily basis.
5. Under no circumstances should a financial company or a cash dealer shall allow opening and operating of an account in a false name. Even if no offence was committed by the account operator, the financial institution has committed an offence according to the law.
6. Countries are coming in heavily on cash movement either for import or for export or for any other purpose. Countries have made it clear that cash handling beyond a specific value is not accepted and can be seized at any port or place.
It is essential that all the financial institutions abide by these laws. Now UNODC (United Nations Office on Drugs and Crime) has issued a comprehensive legal framework for the member countries to follow to counter crimes including terrorism.
3. Lacuna in Controls
Whatever be the methods that are adopted by the banks to identify such variations in the transactions, it is always found that people committing the
Money laundering has its origin when the British landed up in India and other Oriental countries. It was a common scene to find a person who has returned from the Orient rich and pompous. Money in various forms, taken from these Oriental countries was sent back to England without the knowledge of the administration was common…
According to the research findings, financing terrorism is not a local or national activity or it cannot be linked to a specific country or location. It is an international matter as people all over the world are affected because of this criminal activity. Asset forfeiture is a step to control monetary upgrading of terrorists working all over the world.
It is money generated from illegal activities that processed into the banking sector as legally acquired funds2. It is therefore a serious situation that needs to be combated in all nations around the world. There are several conceptual frameworks within which the concept of money laundering can be examined.
Thus, it involves “turning dirty money into clean money”, “washing drug money”, and “disguising criminal money”. The concept of money laundering has evolved over the years and hence money legitimately earned but not disclosed through above means for avoidance purposes involves money laundering.
In such context, this paper will try to shed light on pertinent issues regarding identity fraud in financial organization through cyber space. In the first section, the paper will try to demystify the nature of identity fraud in financial organizations and what are the pertinent factors that create difficulty for users to detect the fraud.
In such a way that ordinary people in an organized crime commit money laundering and so are the terrorists that make their financial transactions to support their operations. While money laundering has been recognized as potentially practiced illegal act by any ordinary individual, the world is particularly concern with terrorists financing along with money laundering crime.
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.
Organised crimes, terrorist organisations all make use of money laundering methods to take care of their expenses. According to International Monetary Fund1, the total money laundering in the world is any where between two and five percent of the World GDP.
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
3 pages (750 words)Essay
Hire a pro to write a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Apply my DISCOUNT
Got a tricky question? Receive an answer from students like you!Try us!
Let us find you an essay for FREE
Contact us via Live Chat, call us at +16312120006or send an email to email@example.com