Billy's Money Laundering Information WebsiteMoney 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 Launderers tool bag
Money Laundering - Conclusion

by Billy Steel

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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?.

Some conclusions I have about this area of criminality.

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

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A general observation, given the global nature of money laundering, is that geographic borders have become increasingly irrelevant. Launderers tend to move their activity to jurisdictions where there are few or weak anti-money laundering countermeasures. Moving money electronically to these locations is instantaneous and gives rise to a particular concern for the authorities. That is, the number of electronic payment instructions that fail to include the names and addresses of both senders and beneficiaries when these are not financial institutions.


Other fears identified have been the dissolution of the Warsaw Pact and the disintegration of the Soviet Union. This has led to a significant increase in crime in these countries, with the resultant emergence of powerful organised crime groups who are exploiting their national economies, infiltrating their banking industry and forging links with organised criminals in other countries. These crime groups are regarded as transnational as their activities (trafficking in drugs, arms, industrial metals and nuclear material, extortion, prostitution, car theft, bank fraud and kidnapping) are not confined within their own borders. It does not take a giant leap of the imagination to realise that these crime groups have also added money laundering to their repertoire, a fact recognised by the FATF, which has discussed ways to assist the authorities there.


Reasons to fight money laundering are increasing, as the threats posed by this activity are significant. The FATF has identified four major threats represented by money laundering activity. Firstly, that failure to prevent laundering makes it easier for criminals to profit from their illicit activities. Secondly, that such a failure permits criminal organisations to finance further illicit activities. Thirdly, that the ready use of the financial system by launderers risks undermining individual financial institutions and the entire system. Finally, that the accumulation of power and wealth by criminals and crime groups which is facilitated by laundering can eventually pose a threat to national economies and democratic systems.


Money laundering represents a serious threat then, not just to sound economic and financial development but to the political integrity and stability of our nation. The Bahamas are a prime example of corrupt investment leading to disaster. In the 1980s, money laundering and drug trafficking resulted in the government being labelled corrupt: the financial services companies took flight, and the tourism industry went from upscale to downmarket. Developing nations are a particular area of concern - they crave investment in their nations and are more willing to accept suspicious transactions. As a result, the guidelines for combating the laundering process need to be put in place now.

As is the case with all crime, money is the motivating factor. For enforcement to be effective, we must attack the money of these multibillion-dollar criminal enterprises. E.A. Nadelmann made a strong point when he said;


"confiscation provides a neat way to make law enforcement pay for itself".


Money laundering is carried out primarily through financial institutions and it is therefore only right that they are at the forefront of the battle against money launderers. (This is fully illustrated in the FATF 40 Recommendations (points 8-29)). However, investigations have uncovered members of an emerging criminal class - professional money launderers. They are accountants, solicitors, money brokers and members of other legitimate professions. They are attracted by greed, as for them, money laundering is an easy route to almost limitless wealth. This has attracted notice from the authorities and legislation has been enacted so that now no financial institution or professional advisor will be immune from the provisions contained in this legislation.


Money laundering law is concerned primarily with denying the criminal access to the financial system. Confiscation is concerned with depriving him of the proceeds of crime. For these both to be effective: We must place increased emphasis on identifying the proceeds of crime and to deterring criminals from using the financial system. Only by these deterrents being effective will money laundering become a more risky activity and ultimately one seen to be not worth the risk. Gilmore (1993) states: "the ultimate prize, that of being in a position, for the first time, to take co-ordinated and effective world-wide action to undermine the financial power of drug trafficking networks and other criminal organisations, is now in sight if not, as yet, fully within our reach".


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