Prevention of Money Laundering

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Prevention of Money Laundering

By | November 2012
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INTRODUCTION
The globalization process, driven by advancements in communications and information technology, has made the international system more interactive, integrated, interrelated, and interconnected. This dynamic has unleashed the

floodgates of opportunities for criminals to expand, widen and deepen their reach, become more sophisticated in their operations, and intensify their level and pace of transactions. Equipped with the power of technology, disregard for human life and values, and indiscreet ruthlessness, these criminals are able to corrupt the societies with little regard for national boundaries, state sovereignty and levels of economic development. Because of the opportunities and needs created by the global dimension of business, crimes such as fraud, counterfeiting, corruption and embezzlement have opportunities to shift from individual or family ambit to more organized and competitive global structures. Indeed, underground criminal organizations operate like multinational companies, establishing affiliates, maintaining strategic alliances, investing legitimately in foreign countries, and extending their capacities and range across regions.

What is Money Laundering?
Money laundering is the processing of criminal proceeds to disguise its illegal origin. Terrorism, illegal arms sales, financial crimes, smuggling, and the activities of organised crime, including drug trafficking and prostitution rings, generate huge sums. Embezzlement, insider trading, bribery and computer fraud also produce large profits and create an incentive to legitimise the ill-gotten gains through money laundering. When a criminal activity generates substantial profits, the individual or group involved in such activities route the funds to safe heavens by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

445 Most fundamentally, money laundering is inextricably linked to the underlying...
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