To combat money laundering, the BIS issued a statement of principles requiring banks to make reasonable efforts to determine the true identity oft their customers. According to the Aus Gov, this must be undertaken by all ‘cash dealers’ including casinos, TABs who are required to report suspect cash transactions over $10,000 or over $500 for cross-border. Since this however, drug money and other illicitly obtain money are now shipped out of the country in cash. Methods include smuggling money out of the country through the postal service as mail is protected and can only be searched with a warrant. Cash is also smuggled in containers, suitcases.
The placement stage is the most vulnerable stage since legitimate financial institutions are required to make reasonable efforts to identify the beneficiary of the deposits. Various mechanisms are in place to monitor large denomination wire transfers. Financial Action Task Force FATF is an intergovernmental organization comprising 26 member countries who have made numerous recommendations related to money laundering. The criminalisation of money laundering in connection with crimes is a measure adopted by most member countries, as well as countries bringing in non-financial businesses such as lawyers, pawn shops, casinos and real estate agents into the anti-money laundering system.
Moreover, a group of major international banks established guidelines aimed at combating money laundering known as the Wolfsberg principles which are extensions o the ‘Know your customer” principle relating to business transactions involving wealthy clients.
New payment systems such as online banking, e-cash have enhanced the speed of money transfer over many jurisdictions with anonymity creates a new breed of problems.
Since most tax haven countries depend on the income generated from providing financial services and would have no incentive to join the effort to stop money laundering, tax evasions etc. Many these non-cooperative...
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