- What
is Money Laundering ?
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Money laundering is the process by which large
amounts of illegally obtained money (from drug
trafficking, terrorist activity or other serious
crimes) is given the appearance of having originated
from a legitimate source.
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Estimates of the size of the money laundering
problem ranges between $590 billion - $1.5 trillion
annually.This is a staggering amount and detrimental
by any calculation to the financial systems involved
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- What
are the steps in Money Laundering ?
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Money laundering is not a single act but is in fact
a process that is accomplished in three basic steps.
These steps can be taken at the same time in the
course of a single transaction, but they can also
appear in well separable forms one by one as well. The
steps are:-
Placement;
Layering; and
Integration.
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- What
are the different methods ?
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- Placement
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Cash paid into bank
(sometimes with staff complicity or mixed with
proceeds of legitimate business.
Cash used to buy high
value goods, property or business assets.
- Layering
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Wire transfers abroad
(often using shell companies or funds disguised as
proceeds of legitimate business.
Cash deposited in
overseas banking system
- Integration
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False loan repayments or
forged invoices used as cover for laundered money
Income from property or
legitimate business assets appears
"clean".
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Important
Owning a bank, is a classic
means to launder huge sums of money. In Russia and
some East European States, banks can be readily
purchased for very little money- though few of them
have electronic banking access to SWIFT
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