Money Laundering - A

Brief History
Prepared by: Maulin Jani &
his friends.
Meaning: Money Laundering
 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 the underground
economy
 Definition: Money
Laundering
 According to Robinson," Money
laundering is called what it is because that
perfectly describes what takes place -
illegal, or dirty, money is put through a
cycle of transactions, or washed, so that it
comes out the other end as legal, or clean,
money. In other words, the source of
illegally obtained funds is obscured
through a succession of transfers and
deals in order that those same funds can
eventually be made to appear as
legitimate income".
 According to Swiss Bank:……
…
 Money laundering is a process
whereby the origin of funds
generated by illegal means is
concealed (drug trafficking, gun
smuggling, corruption, etc.).
 BACKGROUND….
 Money laundering as a crime only
attracted interest in the 1980s, essentially
within a drug trafficking context. It was
from an increasing awareness of the huge
profits generated from this criminal
activity and a concern at the massive drug
abuse problem in western society which
created the impetus for governments to
act against the drug dealers by creating
legislation that would deprive them of
their illicit gains.
 Money laundering is a truly global
phenomenon, helped by the
International financial community
which is a 24hrs a day business.
When one financial centre closes
business for the day, another one is
opening or open for business.
 Governments also recognized that
criminal organizations, through the
huge profits they earned from drugs,
could contaminate and corrupt the
structures of the state at all levels.
 Characteristics of Money
Laundering……..
 As a 1993 UN Report noted:
The basic characteristics of the laundering of
the proceeds of crime, which to a large extent
also mark the operations of organized and
transnational crime, are its global nature, the
flexibility and adaptability of its operations, the
use of the latest technological means and
professional assistance, the ingenuity of its
operators and the vast resources at their
disposal.
 In addition, a characteristic that
should not be overlooked is the
constant pursuit of profits and the
expansion into new areas of criminal
activity.
The international dimension of money
laundering was evident in a study of
Canadian money laundering police files.
They revealed that over 80 per cent of all
laundering schemes had an international
dimension.
Money laundering policy
 The FBC has developed a policy regulating
the duties of banks and traders in
securities when accepting capital assets.
In particular, it enacted the "Policy on the
prevention and fight against money
laundering". The policy provides elements
for interpreting the criminal code; it gives
concrete expression to the standards that
the banks and the traders in securities
must respect with regard to the guarantee
of irreproachable activity as defined by the
Banking Act.
Anti-money laundering policy…
….
 Australia has implemented new laws to
improve Australia’s existing anti-money
laundering and counter-terrorism financing
system. These new laws meet higher
international standards to protect
Australian businesses from being used for
money laundering and terrorism financing.
The new laws will make it harder for
criminals to use the profits of crime and
terrorists to receive money to carry out
terrorist acts.
 The reforms to Australia’s anti-money
laundering and counter-terrorism financing
(AML/CTF) legislation will provide law
enforcement agencies with high quality
financial intelligence, to assist in the
detection and prevention of terrorist activity
and the laundering of proceeds of crime.
 The new legislation will provide better
quality and larger volumes of financial
transaction reports to the regulator, the
Australian Transaction Reports and Analysis
Centre (AUSTRAC), allowing AUSTRAC
increased opportunities to detect instances
where legitimate financial, gambling and
bullion activities are being used for money
Measures used for the fight
against money laundering
 Switzerland has one of the tightest
provisions in Europe as regards the
fight against money laundering.
 The Swiss criminal code punishes
any offense committed within the
context of organized crime (money
laundering, corruption, fraud, drug
trafficking, gun smuggling, etc.).
 On 1 August 1990, Articles
305a and 305b of the criminal
code entered in force.
 Article 305a takes punitive action
against money laundering, which is
defined as any act of hindrance to
the identification, search or
confiscation of capital assets of
criminal origin. Money laundering is
punished, regardless of where the
major offense took place.
 Article 305b punishes the lack of
vigilance in financial transactions,
particularly the failure to verify the
beneficial owner. Professional
financial intermediaries are bound by
what is referred to as the Know your
customer principle, and are required
without fail to identify the true owner
of the funds, who is known as the
beneficial owner. Negligent
identification of the contracting
partner or establishing the beneficial
owner is punishable.
 Article 260b of the criminal code
renders punishable any person who
has participated in an organization
that keeps its structure and its
collaborators secret and that seeks
to commit criminal acts of violence or
to obtain revenue by criminal means.
What is more, articles 58 to 60 of the
criminal code reinforce measures
relating to the confiscation of assets
of unlawful origin.