Nature and Causes of Global Money Laundering

Topics: Money laundering, Underground economy, Crime Pages: 27 (8899 words) Published: December 19, 2009


Kiran Aftab (Roll # 01)
Afifa Naseer (Roll # 68)
MBA-2004 4th Semester


Introduction 6 History 9 Money laundering and Globalization 13 Nature of Money laundering 14 Methods of Money Laundering 17 Causes of Money laundering 19 The Economic Effect of Money Laundering 27 Money Laundering and Pakistan 32 The sources and magnitude of Money Laundering 35 The State of legislation 37 Review of Amnesty Scheme 39 Current Situation 42 Conclusion 44 Recommendations 45

"The money screamed across the wires, its provenance fading in a maze of electronic transfers, which shifted it, hid it, and broke it up into manageable wads which would be withdrawn and redeposited elsewhere, obliterating the trail." Nest of Vipers by Linda Davies

We have all probably been guilty of hiding a little money, either away from the tax man, the 'better half', or both, but with the increase of sophisticated technology and today's opportunity for global banking, money laundering is becoming much harder to detect. However, nobody could have anticipated the devastation or foresee the repercussions that resulted from failure to detect this criminal infiltration. “Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source and/or destination of money and is a main operation of underground economy.” In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Comptroller of the Currency), “To encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting.” As a result, the illegal activity of money laundering is now recognized as potentially practiced by individuals, small and large business, corrupt officials, members of organized crime (such as drug dealers or the Mafia) or of cults, and even corrupt states or intelligence agencies, through a complex network of shell companies based in offshore tax havens. The increasing complexity of financial crime, the increasing recognised value of so-called "financial intelligence" (FININT) in combating transnational crime and terrorism, and the speculated impact of capital extracted from the legitimate economy has led to an increased prominence of money laundering in political, economic and legal debate. In many jurisdictions, money laundering is seen as an "activity based"...

Bibliography: The News International Lahore Edition June 26, 2004
A review of tax amnesty scheme, From SHAMIM AHMED RIZVI, Islamabad Jul 17 - 23, 2000
Ansari, Kashif Mateen., Dealing with organised financial crime, (The News International Lahore Edition August 29, 2004)
Haq, Dr
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