Money Laundering - International Initiatives

Money Laundering is a World-wide problem

Billy's Home Page \| A Brief History \| What is Money Laundering? \| How Big is the Problem? \| The Money Laundering Process \| Stages of the Process \| Money Laundering Methods \| How Can We Prevent It? \| Effects on Financial Institutions \| Business Areas Prone To Money Laundering \| UK Legislation \| Money Laundering Offences \| International Initiatives \| The Future \| Conclusions \| Recommendations

Money Laundering - International Initiatives
by Billy Steel

Contents
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A Brief History
Here is a dig into the origins of Money Laundering and how it came about.

What is Money Laundering?
Definitions of the phrase "money laundering".

How Big is the Problem?
Estimate of the amount of money being laundered annually.

The Money Laundering Process
The 3 stages of Money Laundering - Placement - Layering - Integration.

Stages of the Process
How Money Laundering Stages are achieved.

Money Laundering Methods
Techniques used by money launderers.

How Can We Prevent It?
Some measures to prevent this crime.

Effects on Financial Institutions
How this crime affects financial institutions, legally and financially.

Business Areas Prone To Money Laundering
Which businesses are targetted by the money launderer.

UK Legislation
Which legislation in the UK covers Money Laundering.

Money Laundering Offences
What the five basic offences of Money Laundering are.

International Initiatives
Some measures to prevent this crime on an international level.

The Future
Future methods of Laundering cash?.

Conclusions
Some conclusions I have about this area of criminality.

Recommendations
Some recommendations on what can be done to strengthen the fight against this insidious crime.

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INTERNATIONAL INITIATIVES - PART 1

The increasing integration of the world’s financial system, as technology has improved and barriers to the free movement of capital have been reduced, has meant that money launderers can make use of this system to hide their ill-gotten gains. They are able to quickly move their criminally derived cash proceeds between national jurisdictions, complicating the task of tracing and confiscating these assets. Because of this, it has been recognised by many governments that close international co-operation was needed to counter money laundering, and a number of agreements have been reached internationally in order to counter this menace.

These agreements have been reached on two fronts - financial and legal.

BASLE STATEMENT OF PRINCIPLES

On the financial front, the Committee on Banking Regulation and supervisory Practices issued the Basle Statement of Principles on the prevention of criminal use of the banking system for the purpose of money laundering in December 1988.

The Statement of Principles does not restrict itself to drug-related money laundering but extends to all aspects of laundering through the banking system, i. e. the deposit, transfer and/or concealment of money derived from illicit activities whether robbery, terrorism, fraud or drugs. It seeks to deny the banking system to those involved in money laundering by the application of the following principles:

Know your customer - banks should make reasonable efforts to determine the customer’s true identity, and have effective procedures for verifying the bona fides of new customers (whether on the asset or liability side of the balance sheet)

Compliance with laws - bank management should ensure that business is conducted in conformity with high ethical standards, laws and regulations being adhered to and ensuring that a service is not provided where there is good reason to suppose that transactions are associated with laundering activities.

Co-operation with law enforcement agencies - within any constraints imposed by rules relating to customer confidentiality, banks should co-operate fully with national law enforcement agencies including, where there are reasonable grounds for suspecting money laundering, taking appropriate measures which are consistent with the law.
Adherence to the Statement - The full text of this section of the Statement is worth quoting in full.

"All banks should formally adopt policies consistent with the principles set out in this Statement and should ensure that all members of their staff concerned, wherever located, are informed of the bank’s policy in this regard. Attention should be given to staff training in matters covered by the Statement. To promote adherence to these principles banks should implement specific procedures for customer identification and for retaining internal records of transactions. Arrangements for internal audit may need to be extended in order to establish an effective means of testing for general compliance with the Statement".

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Questions? Comments? Talk to Billy.

by billysteel@hotmail.com