Every financial institution is charged with the responsibility of developing policies andprocedures to combat money laundering, which includes the duty to be aware of trendsand adaptations in the methods by which money laundering is carried out. The mostdifficult aspect of this responsibility is a financial organization’s ability to anticipate newcriminal behavior and to proactively implement protocols before the criminal behavioroccurs. It’s like trying to guess what previously unknown disease will be the greatestthreat to life next week or next year. In truth, much as the emergence of a new diseasefrequently determines the direction of medical science, it is often the money laundererwho determines the course the industry takes to restrict criminal money launderingactivity.With this in mind, this white paper will briefly describe the principal organizationsinvolved in determining money laundering policy and procedures and will focus onemerging money laundering risks facing the financial services industry.
Policy Making Organizations
There are a variety of industry and/or regulatory organizations which keep anunwavering eye on money laundering processes on national, international, and globalscales. These organizations assist financial institutions by tracking developments inmoney laundering and reacting with recommendations and regulations to limit thecapacity in which criminals may operate. Much of the below discussion is the result oftheir findings and conclusions. They include:
U.S. Departments of Treasury, Justice, and Homeland Security. The 2007National Money Laundering Strategy, released May 3
, specifies the channelsof greatest risk for money laundering. They include traditional financial institutions suchas banks, as well as money services businesses, online payment systems, informalvalue transfer systems, commercial enterprises, insurance companies, and casinos.Other means of money laundering with increasing risks include shell companies andtrusts and bulk cash smuggling.
2007 National Money Laundering Strategy, Appendix A, Money Laundering Threat Assessment.