2. What is Money Laundering?
“The process used to disguise the source of
money or assets derived from criminal
activity”
Include:
Drug trafficking
Extortion
Corruption
Fraud
3. Why do they laundry?
Criminals want to:
Avoid prosecution
Increase profits
Avoid seizure of accumulated wealth
Appear legitimate
Tax evasion
They are trying to conceal the origin of the cash
4.
5. Common money laundering techniques
Bank complicity
Asset purchases with bulk cash
Postal money orders
Credit cards
Gambling in casinos
Refining
6. Legal frame work so as to curb Money Laundering:
In response to mounting concern over money laundering, the Financial
Action Task Force on money laundering (FATF) was established by the
G-7 Summit in Paris in 1989 to develop a co-ordinated international
response.
One of the first tasks of the FATF was to develop Recommendations, 40
in all, which set out the measures national governments should take to
implement effective anti-money laundering programmes.
IMF for example, stated in 1996 that the aggregate size of money
laundering in the world could be somewhere between two and five
percent of the world’s gross domestic product.
7. Money laundering affecting Business
If funds from criminal activity can be easily processed through
a particular institution – either because its employees or
directors have been bribed or because the institution turns a
blind eye to the criminal nature of such funds – the institution
could be drawn into active complicity with criminals and
become part of the criminal network itself.
Evidence of such complicity will have a damaging effect on the
attitudes of other financial intermediaries and of regulatory
authorities, as well as ordinary customers.
8. Money laundering and International Law:
UN Convention against illicit trafficking of narcotics and
psychotropic substances passed in 1988 in Vienna
Convention on laundering, search and confiscation of criminally
gained profit dated November 8, 1990, Strasbourg,
Directive for prevention of use of financial system for money
laundering in 1991,
UN Convention against transnational organized crime passed on
December 12-15, 2000, in Palermo.
These international acts establish a legal basis for governing
incriminated behavior related to money laundering in national
criminal legislation and regulation of criminal sanctions.
9. Activities responsible for
money laundering:
Conversion or transfer of property knowing that the property is
the result of a committed crime in order to conceal the illicit
origin of the property;
Assistance to any person involved in committing of such a crime
in order to avoid legal consequences of these activities;
Hiding or concealing the true nature, source, location, availability
and movement of derived ownership rights or property knowing
that the property is the result of a committed crime;
Gaining, possession or use of goods or things or values knowing
at the time of their receipt that they are the result of illicit
trafficking of narcotics;
Collusion in order to commit, attempt, assist, instigate, facilitate
or advise to commit crime of trafficking of narcotics including
money laundering.
10. Article 6 of the EU Convention 1990:
It defines the concept and characteristics of the crime of money laundering which consists of
intentional undertaking of one or more of the following activities:
Conversion or transfer of property knowing that the property is the result of a committed
crime in order to conceal or present falsely the origin of property or assisting an individual
involved in committing the mentioned crime in order to avoid legal consequences for their
acts;
Concealing or false representation of legal nature, source, location, use, movement of rights or
property in relation to the property knowing that the property is the result of a committed
crime;
Gaining, possession or use of property knowing at the time of receipt that it is the result of
criminal activities;
Participation, collusion or conspiracy in order to commit, try to commit and assist, instigate
or facilitate and advise any crime.
Repression of money laundering was also included in the UN Convention against
transnational organized crime with two additional protocols: the Protocol about the problems
of undertaking efficient measures for prevention and for prevention, repression and
punishment of people trafficking, especially women and children and the Protocol against
smuggling of migrants by land, sea or air..
11. Anti-Money Laundering (AML):
The Bank Secrecy Act (Currency and Foreign Transactions Reporting Act of 1970);
The Money Laundering Control Act of 1986
The Anti-Drug Abuse Act of 1988; Section 2532 of the Crime Control Act of 1990;
Section 206 of the Federal Deposit Insurance Corporation Improvement Act of 1991
The Annunzio-Wylie Anti-Money Laundering Act (Title XV of the Housing and
Community Development Act of 1992);
The Money Laundering Suppression Act of 1994 (Title IV of the Riegle-Neal
Community Development and Regulatory Improvement Act of 1994)
The Money Laundering and Financial Crimes Strategy Act of 1998
The USA PATRIOT Act (Title III, International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001).
12. Conclusion
In order to control the abuse of financial centers by trans-
national criminal operators, preventive and punitive measures
are clearly necessary.
Moreover, the stability of financial markets has to be secured
from the damage that could result through systemic misuse.
This latter aim has meant that international bodies such as the
Basel Committee, the FSF and the FATF amongst others, are
continually developing details for a harmonized approach
aimed at preventing “money laundering”.
It may be suggested that the substantive mix of AML rules
even if their historic evolution is different in each of the
countries examined reflects tacit, but at the same time.
