Money Laundering Essay Research Paper Introduction Although

Money Laundering Essay, Research Paper

Introduction Although it is impossible to calculate the exact amount of money that is laundered world-wide each year estimates have been made that range from 300 to 500 million US dollars. It is important to note that if other non-drug crimes generating significant profit such as extortion, arms smuggling and white collar crime were included in this estimate the figures could potentially double Money laundering is consequently is a very large business and employees thousands of people world wide on a full time basis. This paper will define what money laundering is, international efforts to combat money laundering, the effects that money laundering has on economies and a trace of how to launder money through the Cayman Islands. What is Money Laundering.Money laundering is called what is because that perfectly describes what takes place illegal, or dirty, money is put through a cycle of transactions, or washed, so that it comes out the other end as legal or clean money. In other words, the source of illegally obtained funds is obscured through a succession of transfers and deals in order that those same funds can eventually be made to appear as legitimate income.The term money laundering is said to come from the mafia in the 20 s and 30 s. Gangsters at that time, such as Al Capone were profiting from illegal activities such as extortion, prostitution, gambling and bootleg liquor. A need to make this money legitimate and useful was a huge concern during this time. The gangsters decided to buy legitimate businesses to mix with there elicit business profits. Laundromats were perfect because they are a cash based businesses, basically a perfect platform to launder or cleanse money before reusing it.Today money laundering is a truly global phenomenon, aided by the international financial community, with stock markets and legal/non-legal businesses that are operational 24 hours a day. The Financial Action Task Force (FATF) is set out to be the main international body engaged in continuous, comprehensive efforts both to define policy and to promote the adoption of countermeasures against money laundering.Money laundering draws thousands of people into is corrupt web every day. There is no hard and fast rule about who gets involved as the majority of people are motivated by greed and profits. Individuals who take part in this process primarily comprise of the financial sector, including professional advisors, financial transmitters, bankers, and casinos. According to the OZE PAGE the top three countries of origin for laundered money are in order the US with 46.3% of the total which amounts to $US 1.3 billion dollars annually, followed by Italy with 5.3% of the total which amounts to $US 150 million and then Russia with 5.2% of the total which amounts to $US 147 million. The top three countries, which are the destination for laundered money, are the United States (18.9%), Cayman Islands (4.9%) and Russia (4.2%). What in the fuck Money laundering presents an on-going challenge for those the at enforcement end. The techniques and structures used by launderers are changing all the time, which makes enforcement a contestant battle, the advent of technologies, specifically the internet has allowed funds to be easily transferred continuously and at a contestant rate. The risk that such flows of money may de-stabilize our economy and corrupt our financial and legal institutions is an ongoing challenge faced by organizations such as (FATF). If money laundering is going on everywhere around us and costing our economy millions of dollars then why is it so easy for people to do, why isn t it a public issue. One of the reasons contributing to the success of money launderers is that it is a victimless crime. It does not have any of the drama associated with robbery or the fear that violent crime imprints upon people s psyche and yet money laundering can only take place after a predicate crime (such as robbery or housebreaking of drug dealing) has taken place. This is not true I don t think what about bribes. It is the lack of information about money laundering that is available to the person on the street, which makes it and invisible problem and hence difficult to tackle. International Efforts to Combat Money LaunderingThere have been numerous international initiatives created to stop or at a minimum curb international money laundering. In 1988, the United Nations (UN) recognized that money laundering is not only a law enforcement problem but also a serious national and international security threat that required countermeasures by the international community as a whole. The UN required all parties to the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 to establish money laundering as a punishable offence and to adopt the measures necessary to enable the authorities to identify, trace and freeze or seize proceeds.Over the past 30 years, starting with the Bank Secrecy Act of 1970 in the US, a multitude of laws and regulations have been enacted in an effort to detect and deter money laundering. Yet many national government agencies have now concluded that these anti-money laundering rules and programs now in effect have not done an adequate job. With the increase in telecommunications and computer technology money laundering has forced law enforcement agencies, governments and businesses around the world to develop cooperative