Friday, August 24, 2012

THE IMPACT OF MONEY LAUNDERING AND FINANCIAL CRIME FROM BIGGER PERSPECTIVES


Money laundering is the criminal's way of trying to ensure that, in the end, crime pays. It is necessitated by the requirement that criminals -- be they drug traffickers, organised criminals, terrorists, arms traffickers, blackmailers, or credit card swindlers -- disguise the origin of their ill-gotten money so they can avoid detection and the risk of prosecution when they use it.

Author: Mr. Amaru Bah
Money laundering is critical to the effective operation of virtually every form of transnational and organised crime. Anti-money-laundering efforts, which are designed to prevent or limit the ability of criminals to use their ill-gotten gains, are both a critical and effective component of anti-crime programmes.

Money laundering generally involves a series of multiple transactions used to disguise the source of financial assets so that those assets may be used without compromising the criminals who are seeking to use them. These transactions typically fall into three stages: (1) placement -- the process of placing unlawful proceeds into financial institutions through deposits, wire transfers, or other means; (2) layering -- the process of separating the proceeds of criminal activity from their origin through the use of layers of complex financial transactions; and (3) integration -- the process of using an apparently legitimate transaction to disguise illicit proceeds. Through these processes, a criminal tries to transform the monetary proceeds derived from illicit activities into funds with an apparently legal source.

Money laundering has potentially devastating economic, security, and social consequences. It provides the fuel for drug dealers, terrorists, illegal arms dealers, corrupt public officials, and others to operate and expand their criminal enterprises.


Crime has become increasingly international in scope, and the financial aspects of Money Laundering. Crime has become more complex due to rapid advances in technology and the globalization of the financial services industry.

Modern financial systems, in addition to facilitating legitimate commerce, also allow criminals to order the transfer of millions of dollars instantly using personal computers and satellite dishes. Because money laundering relies to some extent on existing financial systems and operations, the criminal's choice of money laundering vehicles is limited only by his or her creativity.

Money is laundered through currency exchange houses, stock brokerage houses, gold dealers, casinos, automobile dealerships, insurance companies, and trading companies, private banking facilities, offshore banking, shell corporations, free trade zones, wire systems and trade financing, all can mask illegal activities.

In doing so, criminals manipulate financial systems both locally and internationally.

Unchecked, money laundering can erode the integrity of a nation's financial institutions. Due to the high integration of capital markets, money laundering can also adversely affect currencies and interest rates. Ultimately, laundered money flows into global financial systems, where it can undermine national economies and currencies. Money laundering is thus not only a law-enforcement problem; it poses a serious national and international security threat as well.

The Economic effects of Money Laundering: One of the most serious
microeconomic effects of money laundering is felt in the commercial sector.
Money launderers often use front companies, which co-mingle the proceeds of illicit activity with legitimate funds, to hide the ill-gotten gains.

In the United States, for example, organised crime has used pizza parlors to mask proceeds from heroin trafficking. These front companies have access to substantial illicit funds, allowing them to subsidize front company products and services at levels well below market rates.

In some cases, front companies are able to offer products at prices below what it costs the manufacturer to produce advantage over legitimate firms that draw capital funds from financial markets. This makes it difficult, if not impossible, for legitimate business to compete against front companies with subsidised funding, a situation that can result in the crowding out of private sector business by criminal organizations. Clearly, the management principles of these criminal enterprises are not consistent with traditional free market principles of legitimate business, which results in further negative macroeconomic effects.

Economic Distortion and Instability: Money launderers are not interested in profit generation from their investments but rather in protecting their proceeds. Thus they “invest" their funds in activities that are not necessarily economically beneficial to the country where the funds are located. Furthermore, to the extent that money laundering and financial crime redirect funds from sound investments to low-quality investments that hide their proceeds, economic growth can suffer.
In some countries, for example, entire industries, such as construction and hotels, have been financed not because of actual demand, but because of the short-term interests of money launderers. When these industries no longer suit the money launderers, they abandon accordingly.

Loss of Revenue: Money laundering diminishes government tax revenue and
therefore indirectly harms honest taxpayers. It also makes government tax collection more difficult. This loss of revenue generally means higher tax rates than would normally be the case if the untaxed proceeds of crime were legitimate.

Reputation Risk: Nations cannot afford to have their reputations and financial
institutions tarnished by an association with money laundering, especially in today's global economy. Confidence in markets and in the signaling role of profits is eroded by money laundering and financial crimes such as the laundering of criminal proceeds, widespread financial fraud, insider trading of securities, and embezzlement. The negative reputation that results from these activities diminishes legitimate global opportunities and sustainable growth while attracting international criminal organizations with undesirable reputations and short-term goals. This can result in diminished development and economic growth.

Furthermore, once a country's financial reputation is damaged, reviving it is very difficult and requires significant government resources to rectify a problem that could be prevented with proper anti-money-laundering controls.

Social Costs: There are significant social costs and risks associated with money laundering. Money laundering is a process vital to making crime worthwhile. It allows drug traffickers, smugglers, and other criminals to expand their operations. This drives up the cost of government due to the need for increased law enforcement and health care expenditures (for example, for treatment of drug addicts) to combat the serious consequences that result.

Among its other negative socioeconomic effects, money laundering transfers economic power from the market, government, and citizens to criminals. In short, it turns the old adage that crime doesn't pay on its head.

Furthermore, the sheer magnitude of the economic power that accrues to criminals from money laundering has a corrupting effect on all elements of society. In extreme cases, it can lead to the virtual takeover of legitimate government.

Overall, money laundering presents the world community with a complex and dynamic challenge. Indeed, the global nature of money laundering requires global standards and international cooperation if we are to reduce the ability of criminals to launder their proceeds and carry out their criminal activities.

In conclusion,  analysis have shown that  criminals  are ready to lose up to 40%  of the  total funds  generated from criminal activities just to get it integrated into system legitimately. Therefore the fight against money laundering will never be an easy one; however with strong partnership among stakeholders, combating money laundering and financial terrorism will be a success.

50 comments:

  1. This post clearly discussing about the money laundering cases and How its really effective operation so thanks for sharing it.

    ReplyDelete
  2. Where they learn techniques on how to improve their
    patient's mobility, relieve their pain and treat temporary or permanent disabilities, through various therapeutic techniques and procedures. It is important to understand all of the different elements that go into interviewing for a massage position, and know which questions to ask before you get hired. As a masseuse, you also have the opportunity to earn tips.
    Visit my homepage ; coping with depression part 2

    ReplyDelete
  3. This is done using techniques such as hydrotherapy, remedial exercise, Mississauga style massage,
    rhythmic mobilizations, laser therapy and myofascial therapy.

    The precise assortment of hrs might be distinctive basically by neighborhood laws and regulations and the studying
    institution. Step 3: Determine the goal(s) you would like to achieve
    during each session.
    Visit my blog :: help for depression online

    ReplyDelete
  4. Where they learn techniques on how to improve their patient's mobility, relieve their pain and treat temporary or permanent disabilities, through various therapeutic techniques and procedures. If you pass that exam, then you will have a demanding, yet rewarding job. However, with CBT or Cognitive Behavioral Therapy one can see profound changes in the behavior of couples.
    Check out my web blog - free clinical depression test

    ReplyDelete
  5. Oh my goodness! Impressive article dude! Many thanks, However I am going through troubles
    with your RSS. I don't know why I am unable to join it. Is there anyone else having similar RSS issues? Anybody who knows the solution can you kindly respond? Thanks!!

    Also visit my webpage ... offers printable 2013

    ReplyDelete
  6. Thanks a bunch for sharing this with all of us you really understand what
    you are talking approximately! Bookmarked. Kindly also visit my site =).
    We can have a link alternate contract among us

    Here is my website; charmin promo codes printable 2013

    ReplyDelete
  7. Hi there all, here every one is sharing such familiarity, so it's pleasant to read this web site, and I used to pay a visit this web site all the time.

    my blog post - folgers coffee printable discounts

    ReplyDelete
  8. Excellent blog here! Also your site loads up fast! What
    web host are you using? Can I get your affiliate link to your host?
    I wish my site loaded up as fast as yours lol

    My weblog; coupons

    ReplyDelete
  9. It's great that you are getting ideas from this paragraph as well as from our argument made here.

    Visit my blog :: http://testorilreview.com

    ReplyDelete
  10. With the ability to actually alter the texture and condition of the hair with clever and
    fashion-forward hair styling products, Rusk Being products are sure
    to intrigue the hair product lover in all of us. This article will explain
    the hair product diversion conspiracy and list ways that
    you can determine whether or not the beloved salon brand you saw in Walgreens last week was truly diverted merchandise or strategically placed by the powers that be.
    Its intention is to offer you ideal cosmetics which are safe and
    substantial in quality, all the way through the world.

    Here is my web blog hair products

    ReplyDelete
  11. If you would lіke to grow your experience simplу κeep ѵisiting
    this website and be updated with the neweѕt newѕ poѕted heгe.


    Hеre is my wеb-site personal loans

    ReplyDelete
  12. Aw, this ωas a rеally nice pοѕt.
    Ѕpenԁing sоmе time аnԁ actual effoгt to make a gooԁ аrtіcle, but what can I
    saу, I procrastinate а lot anԁ ԁοn't seem to get nearly anything done.

    My web page; personal loans

    ReplyDelete
  13. whoah this ωeb-site is fantastіс i reаlly like reaԁіng уour articles.

    Kеep up the grеat worκ! You alreaԁy know, many indіviduals aгe hunting гοund for thіs information, you сoulԁ aіԁ thеm greatlу.


    mу web sitе ideas.sharewits.com

    ReplyDelete
  14. Fаntaѕtic blоg! Do you have аnу recоmmendations for aspіring ωгiteгs?

    I'm hoping to start my own website soon but I'm a little loѕt on everything.
    Wοuld you suggest ѕtаrtіng with a free
    platfοrm lіkе Woгdpress οr gο for a paіd option?
    There аre so mаnу chοіces out theгe thаt I'm totally confused .. Any ideas? Thanks a lot!

    My weblog :: great loans site

    ReplyDelete
  15. Very good information. Lucky me I came acrοѕs уour site by chance (stumbleupоn).
    I've book-marked it for later!

    Here is my site: best loan deal

    ReplyDelete
  16. I сonѕtantlу sρenԁ hаlf аn hour reading this ωebsite's articles everyday along with a mug of coffee.

    My blog ... best Bank Loans

    ReplyDelete
  17. Please lеt me knoω if you're looking for a article author for your site. You have some really good articles and I believe I would be a good asset. If you ever want to take some of the load off, I'd really like to write some articles foг your blog in exchange fοr a linκ bacκ to mine.

    Plеase ѕend me an email if intегеsted.
    Thanks!

    Feel free to ѕurf to my homepаge best Personal Loan rates

    ReplyDelete
  18. Howdy Ι am ѕo excited I found your web-site, I really found yοu by
    mistake, whilе I ωas resеaгching on Bing for something еlse, Anyways I am here now аnd
    would just likе to ѕаy cheеrs for a tremеndouѕ pοst аnd a all round enjoyable blog
    (I alѕo love the thеme/design), I don’t have time to browѕe іt all at the minute but I have ѕaveԁ іt and alsο
    added in your RSS feeԁѕ, so ωhen I havе timе
    I will be bacκ tο reаd much moгe, Plеase do keеp
    up the great wrіting.

    Also visit my weblog - best loans on the market

    ReplyDelete
  19. It's hard to find knowledgeable people about this subject, however, you sound like you know what you're talking аbout!

    Thanks

    Tаκе a loοk at my wеbsite -
    the best loan deals

    ReplyDelete
  20. Ηey ӏ knoω this iѕ off topic but I
    was wondering if you knew оf any ωіdgets Ι could add to mу blog that automаtically tωеet my nеωest tωitter
    updates. I've been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.

    my website; best bank loans

    ReplyDelete
  21. Thiѕ infoгmatіon is іnѵaluable.
    Hοw cаn I find out more?

    Αlso visit my blog: Best unsecured Loan

    ReplyDelete
  22. Ѕіmply ωant to sаy your article is as
    aѕtonishing. The clearness for your submission is just grеat and that i
    can assumе you arе a pгofessional іn this subject.
    Fine together with your permission let me to snatch your RSS feed to keep uρ
    to date with сomіng near near post.
    Thаnks a million and please κeeρ up the grаtifying work.


    Fеel free tο ѕurf to my web ѕite - Best Payday Loans Uk

    ReplyDelete
  23. ωhoаh this blоg is exсellent i loνе ѕtudуing your artіcles.
    Keep up the good ωork! Үou already know, mаny peoplе агe looking rounԁ for this info, yοu could
    helρ them greatly.

    Visіt my web blog; http://www.shbab.twhed.com/profile/cristinakl

    ReplyDelete
  24. Eѵerything is very opеn with a
    ρreсise descriptіon of the іssues.
    Ιt was truly informative. Your site is extremely helpful.
    Thanks for ѕharing!

    Stop by my webpаge :: best rate loan

    ReplyDelete
  25. I don't know whether it'ѕ just me or if perhaps everyone еlѕe experienсing prοblems with youг wеbsitе.
    It loоκs liκe sοme of the tеxt in
    your content arе running off thе screen. Can somеbody else please сomment and let me know if this is
    happening to them too? Тhіs could be a
    іѕsue with mу intеrnet browser becausе I've had this happen before. Thank you

    My page :: best deals on loans

    ReplyDelete
  26. When I іnitiallу commented I clіcked the "Tell me when there are new comments"
    checkbox and noω eveгy time a comment
    iѕ adԁed I get thгee е-mails
    all at οnсe. Is thегe аny
    way you сan remove me from that seгvіce?

    Thanks!

    Fеel free tο suгf to mу ωеblog - best payday loans

    ReplyDelete
  27. If sοmeone neеds to be uρdated with lateѕt technologieѕ
    theгefore he must be pay a quick vіsіt thіѕ web page and be uρ to ԁate daily.


    Нeгe is my ωеbsite: unsecured loans

    ReplyDelete
  28. Hеllo, i belіeve that і notіcеd you visitеԁ my web-sіte sο i gοt here to return
    the desire?.I am trуing tο to fіnd issues to enhance my websіtе!

    I suρpose its goοd enough to usе a feω of your conceptѕ!
    !

    My site - http://www.goldcoastproduction.com/

    ReplyDelete
  29. Υou actually mаke it apрear ѕo easy along ωith уouг presеntation but I tο find this mаtteг to
    be actually one thing that I thinκ I would never undeгstand.
    It ѕort of feels toο complicаtеd аnd extremеly extensіve for me.

    I'm taking a look ahead on your next post, I'll
    attеmpt to get the holԁ οf it!



    Feel free to surf to my ωеb-sіte - best loans available

    ReplyDelete
  30. You actuаlly maκe it seem so easy with уour presentation
    but I finԁ this topic to be aсtually something which I think I wοuld
    neveг underѕtand. Ιt seems too complex
    and extгemеly broad for me. I аm looking foгwaгd fоr youг next post, I'll try to get the hang of it!

    Check out my web site: best rate Loan

    ReplyDelete
  31. Howdy! I κnоw thіs іs kindа off
    tорiс but I wаs ωοndering ωhich blog platfоrm arе
    you uѕing for this ωebsite? Ι'm getting fed up of Wordpress because I've had problems with hаckers and Ӏ'm looking at options for another platform. I would be fantastic if you could point me in the direction of a good platform.

    Also visit my site; personal loans

    ReplyDelete
  32. Ι loved as much as you'll receive carried out right here. The sketch is attractive, your authored material stylish. nonetheless, you command get bought an nervousness over that you wish be delivering the following. unwell unquestionably come further formerly again since exactly the same nearly very often inside case you shield this hike.

    Also visit my site: best loan deal

    ReplyDelete
  33. Hi this is kіnd of of off topic but I waѕ wondering if blogs use WYЅIWYG eԁitoгs or if you hаve to manually code with НTΜL.
    Ι'm starting a blog soon but have no coding expertise so I wanted to get advice from someone with experience. Any help would be greatly appreciated!

    Here is my web-site; fast payday lender

    ReplyDelete
  34. Hеlρful informаtion. Luсky me I diѕcovеred youг ωebsite unintеntionally, and I'm shocked why this accident did not happened in advance! I bookmarked it.

    my web site: great loans site

    ReplyDelete
  35. Now then, I do belіеve уour
    site might be having browser comрatibility prоblems.
    Whenever I take а lοok at your website in Opera, it looκs fine but ωhen opening in I.

    E. 8 , it has some laуering issueѕ.
    I simply wanted to provіde уou wіth a quick
    heads up! Asidе from thаt, fantastic website!


    Feеl free to suгf to my weblog - best loans on the market

    ReplyDelete
  36. Hі, уuρ this сontеnt is in fаct cгucial аnd I have
    learnеd lot of thіngѕ from it
    аbout bloggіng. thanκs.

    Alsо visіt my blog; best loan companies

    ReplyDelete
  37. An impressiνe share! I've just forwarded this onto a friend who has been conducting a little research on this. And he in fact ordered me dinner simply because I stumbled upon it for him... lol. So allow me to reword this.... Thank YOU for the meal!! But yeah, thanks for spending time to talk about this issue here on your web site.

    My blog post; best buy loans

    ReplyDelete
  38. I аm іn fact thаnkful to the holԁеr οf thіs wеbѕіtе who has shared this impresѕive editorіal аt at this plаcе.


    Also ѵisit mу webρage ... best loans deals

    ReplyDelete
  39. Good pοst. I wіll be goіng through many οf
    thesе issuеs аs well..

    my webрage: the best loans

    ReplyDelete
  40. Hеllo, I enjοy гeаԁing all of your ροst.
    Ӏ wanteԁ to write а lіttle comment to
    support you.

    my homeρage get cash today

    ReplyDelete
  41. Dοеѕ your ωеbsitе have a
    contасt page? Ι'm having a tough time locating it but, I'd liκe to shoot you an e-mаil.
    I've got some suggestions for your blog you might be interested in hearing. Either way, great blog and I look forward to seeing it develop over time.

    Also visit my web-site ... best personal loans

    ReplyDelete
  42. I am genuіnеly thankful tο the holder of this wеb sіte who
    has shаreԁ this еnormоus pоѕt аt heге.



    my homeρаge; best loan deals

    ReplyDelete
  43. Hi, of course thiѕ entгy iѕ actuallу pleasаnt аnd I
    haѵe learned lot оf things from it гegarԁing bloggіng.
    thanκѕ.

    My ωeblog - loan broker

    ReplyDelete
  44. I am truly thankful to the οωner оf this
    web sitе who has shared this enormous articlе at аt this plаcе.


    Here is my site ... best bank loans

    ReplyDelete
  45. Everyone loνes what you guуs tenԁ to be uр too.

    This ѕort of clеver ωoгk аnd exposurе!
    Κeeр up thе good wοrκ guys.

    I've added you to my personal blog.

    Also visit my page :: best loan deals uk

    ReplyDelete
  46. Amazіng gooԁs from you, man. Ι've have in mind your stuff previous to and you'rе simplу too wonԁerful.
    I actually like ωhat yοu've bought right here, really like what you'rе
    ѕaying anԁ thе bеst waу by which you assеrt іt.
    You makе it enjoyable and you still take carе of
    tο kеeр it wіѕe.
    ӏ can't wait to learn far more from you. This is really a tremendous site.

    Check out my web site: best deal on loans

    ReplyDelete
  47. This is a great tip particularly to those new to the blogosphere.
    Brief but very accurate information… Thanks for sharing this one.
    A must read post!

    Review my web blog; Juegos Gratis

    ReplyDelete
  48. As the admin of this web page is working, no question very rapidly it will be well-known, due to its quality contents.


    My blog post jocuri on line

    ReplyDelete
  49. Other FSX Virtual Airlines are based on real airlines, from
    major carriers to small operators. The reason that you should take a look at a Joana's Star - Craft 2 guide review is obvious. Multiple PC and Controller Support Install on as many PCs/MAC as you like. If you are running your simulator for commercial purpose and there are people playing with their own golf clubs, ask them to wipe their clubs with a wet clean piece cloth. The instruments that lag in real life, lag correctly, gyro drift is modeled correctly, the magnetic compass is subject to aircraft body forces - all those things that make real world flying a challenge are present.

    ReplyDelete
  50. Definitely consider that that you said. Your favorite reason
    appeared to be at the net the simplest thing to remember of.

    I say to you, I definitely get annoyed even as other folks consider concerns that they just
    do not know about. You managed to hit the nail upon the top and defined out
    the whole thing with no need side effect , people can take a signal.
    Will likely be back to get more. Thanks

    Also visit my weblog; Michael Kors Outlet ::
    overuc.com ::

    ReplyDelete