MONEY LAUNDERING: BANK

AS A CHANNEL
[Document subtitle]

Submitted To: Submitted By:

Dr. Oveis Dipeshwor Yadav
Retail Bank Management

\
ABSRACT:
The incidence of money laundering and the willingness to pursue international anti-money laundering
(AML) policies vary vastly from country to country. But policies of tolerance come with considerable
social costs, which raises the question of why such deviations should exist. The paper argues that the
globalization of crime can provide a safe haven for criminals and attract all the financial gains from
crime if one country breaks the "chain of accountability". increase. Smaller economies are best
positioned to shield themselves from the costs of crime, so smaller countries calculate for a part of the
total cost compared to the potential return on investment that money laundering offers. only bear the
burden, and therefore have a higher incentive for them to tolerate crime. Practice comparing with
larger neighbours. As such, the existence of a money laundering market, he argues, is due to AML's
"churn" policy, with the degree of "churn" largely dependent on the physical size of the country. In
this present a simple political competition model that formalizes this intuition.
 TABLE OF CONTENTS

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1. INTRODUCTION 3

2. HISTORY 3

3. METHODS 4

3.1. LISTS OF METHODS 4

3.2. DIGITAL ELECTRONIC MONEY 7

3.3. REVERSE MONEY LAUNDERING 8

4. STAGES OF MONEY LAUNDERING 8

4.1. PLACEMENT 8

4.2. LAYERING 9

4.3. INTEGRATION 9

5. MAGNITUDE 10

6. COMBATING 10

6.1. CRIMINALIZATION 11

6.2. ROLE OF FINANCIAL INSTITUTIONS 11

6.3. GLOBAL ORGANIZATIONS 12

7. WHERE IT OCCURS 12

8. EFFECTS ON BUSINESS 13

9. EFFECTS ON ECONOMIC DEVELOPMENT 13

10. WHAT GOVERNMENT SHOULD DO 14

11. MULTILATERAL INITIATIVES 14

12. MONEY LAUNDERRING CHARGES 15

13. DEFENCES AGAINST MONEY LAUNDERING CHARGES 15

14. CONCLUSION 16
1. INTRODUCTION:

Money laundering is disguising the source of funds resulting from illegal acts such as drug trafficking,
corruption, embezzlement, and gambling by converting them to legitimate sources. This is usually the
main task of organized crime. Under US law, money laundering is the practice of engaging in financial
transactions with the intention of disguising the identity, source, or destination of illegally obtained
money. In British law, the definition of common law is broader.

It is the definition is often expanded by government and international regulators such as the US Office of
the Comptroller of the Currency to mean "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
financial crime becomes more complex and "financial intelligence" (FININT) becomes more accepted in
the fight against international crime and terrorism, money laundering becomes more prominent in
political, economic and legal debates. Money laundering is virtually illegal. Money-making activities are
almost always criminal to some degree (because otherwise there would be no need to launder (money)).

2. HISTORY:

Anti-money laundering laws were created to combat organized crime during the Prohibition era in the
United States in the 1930s. Organized crime was given a huge boost by Prohibition, and a huge new
source of funding came from the illegal sale of alcohol. The successful prosecution of Al Capone for tax
evasion has given the state and law enforcement a renewed focus on tracking and seizing funds, but
existing anti-tax evasion laws are no longer applicable once gangs start paying taxes. lost. In the 1980s,
the war to stop drugs prompted governments to reconsider money laundering regulations and track and
confiscate drug crime proceeds in order to catch the organizers and individuals who run drug empires.
From a law enforcement perspective, it also had the advantage of "reversing the rules of evidence." Law
enforcement usually has to prove that a person is guilty in order to confiscate property, but money
laundering laws can confiscate money and prove the origin of the money to get it back. It's up to that
person to prove that they are. However, it has been abused by some law enforcement agencies, and is
used to supplement their budgets without clear evidence of related criminal activity. The September 11,
2001 attacks The Patriotic Act of the United States and similar laws around the world have led to a
renewed focus on money laundering laws to combat terrorist financing. The G7 (G7) countries used the
Financial Action Task Force on Money Laundering to pressure governments around the world to
strengthen supervision and monitoring of financial transactions and to share that information between
countries. As of 2002, governments around the world are improving money laundering laws and systems
to monitor and monitor financial transactions. Anti-money laundering regulations have become a very
heavy burden for financial institutions, and enforcement has been significantly strengthened. Between
2011 and 2015, several major banks faced increased fines for violating anti-money laundering
regulations.

These include HSBC, fined $1.9 billion in December 2012, and BNP Paribas, fined $8.9 billion by the
US government in July 2014. Many countries have introduced or tightened border controls on the amount
of cash they can carry, introduced centralized transaction reporting systems, and required all financial
institutions to report all financial transactions electronically. For example, Australia established her
AUSTRAC system in 2006 and mandates reporting of all financial transactions.

3. METHODS:
3.1. List of Methods:

Money laundering can take many forms, but most methodologies can be classified as one of several
types. This includes "banking methods, smurfing (also known as structuring), currency exchange and
double billing."

STRUCTURING:

Also known as smurfing, this is a placement method that divides cash into smaller cash deposits to
eliminate suspicion of money laundering and avoid AML reporting requirements. A sub-component of
this is to use a smaller amount of cash to purchase bearer goods such as money orders, and then
eventually deposit back in small amounts.

Bulk cash smuggling:

This includes physically smuggling cash into other jurisdictions and placing it in financial institutions
such as offshore banks that offer higher levels of bank secrecy or less stringent anti-money laundering
measures.

Cash-intensive business:

A business typically comes to receive a large proportion of its revenue as cash uses its accounts to deposit
criminally derived cash. This method of money laundering often causes organized crime and corporate
crime to overlap. Such companies often operate and generate cash revenue from incidental legitimate
business in addition to the black money. In such cases the business will claim all cash received as legal
earnings. Such businesses are best suited to this method, as it has little or no variable costs, a large
apportionment between revenue and variable costs, which makes it hard to detect discrepancies between
revenues and costs. Examples include parking lots, strip clubs, tanning salons, car washes, slot machines,
bars, restaurants, casinos, hair salons, shops, DVD stores, cinemas and beach resorts.
Trade based laundering:

This is the newest and most complicated forms of money laundering. Bills are undervalued or overvalued
to hide money movements. For example, the art market has been accused of being an ideal vehicle for
money laundering due to some unique aspects of art, such as the subjective value of works of art and the
secrecy of buyers and sellers by auction houses. rice field.

Shell companies and trusts:

Trusts and shell companies conceal the true owners of money. Depending on the jurisdiction, trusts and
corporate structures must not disclose the actual owners. The term usually refers to a person acting as a
fictitious owner rather than a corporation, but is also referred to as the slang term rathole.

Round-tripping:

Here, the money is deposited in a controlled foreign corporation offshore in a tax haven where minimal
accounting is maintained and then sent back to tax-free foreign direct investment. A variant of this is to
give the money to a law firm or similar organization as commission cash, then cancel the loan and present
the money received from the lawyer as request or proceeds when the money is transferred. lawsuit.

Bank capture:

In this case, the money launderer or criminal would buy a majority stake in a bank, preferably in a
jurisdiction with weak money laundering controls, and then seamlessly move the funds through the bank.

Invoice Fraud:

For example, a criminal-contacts the company and reports that the supplier's payment details have
changed. Then they provide the alternate scam details to pay the money.

Casinos:

This way a person enters a casino and buys chips with illegal money. Then the person will play the game
for a relatively short amount of time. When a person cashes in a chip, they can claim the proceeds as
gambling prizes in the hope of paying by check, or at least receiving a receipt.

Other gambling:

Money is used for gambling, preferably games of high probability. One way to minimize risk in this way
is to bet on each possible outcome of some event with many possible outcomes, so none of the outcomes
have short odds and the player wins and loses only if he or she takes one or more wins bets. It can be seen
as a source of money. Losing bets remain hidden.
Black salaries:

Companies may hire unregistered employees and pay their salaries in cash without a written contract. Can
be used to pay dirty money.

Transaction Laundering:

When a merchant unwittingly handles illegal credit card transactions for another business. This is a
growing problem that differs from traditional money laundering (e.g. using fake websites), which uses
payment ecosystems to hide the facts of a transaction. Also called "private aggregation" or "factoring".

Tax amnesties:

For example, businesses that legalize unregistered assets and cash in tax havens.

Transaction Laundering:

A merchant unknowingly handles illegal credit card transactions for another business. This is a growing
problem that differs from traditional money laundering (e.g. using fake websites), which uses payment
ecosystems to hide the facts of a transaction. Also called "private aggregation" or "factoring".

Online job markets like Freelancer.com and Fiverr receive funds from customers and keep them in
escrow to pay freelancers. Money launderers can publish tokens on one of these sites and send money to
the site to keep in escrow. The launderer (or his partner) can then register as a freelancer (using a
different account and IP address), accept and complete tasks, and receive funds.

3.2. DIGITAL ELECTRONIC MONEY:

In theory, electronic money should offer an equally easy way to transfer value without revealing its
identity as untracked paper money. In particular, transfers with numbered bank accounts that are
anonymous and protected. However, in practice, the logging capabilities of ISPs and other network
resource managers tend to thwart this intention. Some modern cryptocurrencies aim to provide
opportunities for increased anonymity in transactions for a variety of reasons, but the extent of their
success and, as a result, the extent to which money laundering efforts are concerned. Solutions such as Z-
Cash and Monero are examples of cryptocurrencies that provide un-linkable anonymity through evidence
or information obfuscation (ring signatures). Such currencies may be used in illegal online services. In
2013, ESSEC ISIS researcher Jean-Loup Richet investigated new techniques used by cybercriminals in a
report written by the UN Office on Drugs and Crime. A common approach was in bringing use a digital
currency exchange service that converts dollars into a digital currency called Liberty Reserve that can be
sent and received anonymously. Recipients can convert Liberty Reserve currency back into cash for a
small fee. In May 2013, US authorities closed Liberty Reserve and accused its founder and several others
of money laundering. Another common form of money laundering is online gambling. A large number
of online games, such as Second Life and World of Warcraft, allow money to be converted into virtual
goods, services, or virtual cash that can later be converted back into money. Australia plans to tighten
national anti-money laundering laws to avoid using decentralized digital money like Bitcoin to profit
from crime and corruption. Characteristics are fully deterministic, protocol-based, and can be difficult to
censor, so circumvent domestic laws by obfuscating the origin of transactions using services such as Tor.
make it possible. Bitcoin is completely dependent on cryptography rather than a central entity running
under a KYC framework. Following ransomware attacks, drug dealing, cyber fraud, and gun smuggling,
there are several examples of criminals cashing in large amounts of Bitcoin.

3.3. REVERSE MONEY LAUNDERING:

Reverse money laundering is disguising legitimate sources of funds and using them for illegal purposes.
This is usually done for terrorism financing purposes, but it can also be used by criminal gangs who want
to invest in legitimate businesses and siphon legitimate money from official channels. Unrecorded cash
received through disguised financial transactions is not included in official financial reports and can be
used to evade taxes, pay bribes, and pay "discreet" salaries. For example, in an affidavit filed on March
24, 2014 in the U.S. District Court, Northern California, San Francisco Division, FBI Special Agent
Emmanuel V. Pascow alleges that the organization Chee Kung Tong and California Senator Leland Yee:
Several relevant individuals are involved in reverse money laundering activities. The problem of illicit
collection (obnalichka in Russian) is growing in Russia and other countries of the former Soviet Union.
The Eurasian Anti-Money Laundering and Terrorist Financing (EAG) Group has significantly reduced
the tax base and shifted currency balances in favour of cash in the Russian Federation, Ukraine, Turkey,
Serbia, Kyrgyzstan, Uzbekistan, Armenia and Kazakhstan reported that it did. These processes
complicated economic planning and management and contributed to the growth of the informal economy.

4. STAGES OF MONEY LAUNDERING:

The money laundering process most commonly occurs in three main stages: deployment, tiering and
consolidation. Every step of money laundering can be very complicated due to the criminal activities
involved.

4.1. PLACEMENT:

The first step in money laundering is called "deployment," in which "dirty" money is injected into a
legitimate financial system. After obtaining funds improperly through theft, bribery and corruption,
financial criminals confiscate the funds from their sources. Here, criminal funds are veiled as
"laundering" and flowed into the legitimate financial system. to an overseas account.

4.2. LAYERING:

The second stage of laundering of money is called "layering". It is a complex web of transactions for
moving money into the financial system, usually through offshore technology. Once funds enter the
financial system, criminals make it difficult for authorities to detect money laundering activity. They do
this by obfuscating audit trails by strategically layering financial transactions and fraudulent accounting.
Layering is a very complicated part of the money laundering process. Its purpose is to create multiple
financial transactions in order to disguise the original source and owner of illicit funds.

4.3. INTEGRATION:

The third stage of money laundering is "consolidation". "Dirty" money is now being absorbed into the
economy through real estate and the like. Once the 'dirty' money is in place and tiered, the funds are
reintegrated into the legitimate financial system as 'legal' bids. Synthesis is done very carefully from
legitimate sources to find plausible explanations as to where the money is coming from. This money is
matched to criminals from what appear to be legitimate sources. increase. At a stage, it is very hard to
distinguish between legal and illegal assets. Money launderers can spend money without getting caught.
Without documentary evidence at this stage, it is extremely difficult to catch the culprit. In practice, it is
important to note that these he three stages of money laundering often overlap. As with some financial
crime cases, you don't even have to "place" the illicit funds.
5. MAGNITUDE:

Many regulatory and government agencies annually publish estimates of the amount of money laundered
globally or within national economies. In 1996, an IMF spokesperson estimated that 2-5% of the global
economy was linked to laundering of money. The FATF, an intergovernmental anti-money laundering
body, said: The FATF does not publish figures on this, as it does not represent the amount of money
laundered that is spent each year around the world, and academic commentators have been unable to
reliably estimate the money supply. Various estimates about the extent of global money laundering are
sometimes repeated enough times for some to accept them as fact, but the inherent difficulty of
measuring actively disguised practices Despite being difficult to measure, the amount of money
laundered reaches billions of dollars each year and is a major political concern for governments. As a
result, governments and international organizations have made efforts to deter, prevent and arrest money
laundering. Financial institutions have also made efforts to prevent and detect dirty money transactions
due to government requirements and to avoid the associated reputational risks. As long as criminal gangs
exist, the problem of money laundering will exist. Modern anti-money laundering laws have evolved with
the modern war on drugs. More recently, anti-money laundering laws have been seen as complementary
to the financial crime of terrorist financing. This is because both crimes typically involve the movement
of funds through the financial system (although money laundering refers to the source of the funds,
whereas terrorist financing refers to the source of the funds). where the money goes)). Transaction
laundering is a large and growing problem. Fine-extra estimates that transaction laundering accounted for
him more than $200 billion in 2017 in the United States alone, of which more than $6 billion was related
to illicit goods and services, about 335,000. is sold.

6. COMBATING:

The financial and legal industry describes the legal controls required by financial institutions and other
regulated entities to prevent, detect and report money laundering activity. Anti-money laundering policies
have gained global attention with the formation of the Financial Action Task Force (FATF) and the
promulgation of the International Framework for Anti-Money Laundering Standards. These criteria
received increased attention after the FATF began a process in 2000 and 2001 to publicly identify
countries with deficiencies in anti-money laundering and international cooperation laws. An effective
AML program requires a jurisdiction that criminalizes money laundering and gives relevant regulators
and police the powers and tools to conduct investigations. Information can be exchanged with other
countries as needed. We also require financial institutions to identify customers, implement risk-based
controls, keep records and report suspicious activity. Rigorous background checks are necessary to
combat many money launderers who evade investments through complex ownership and corporate
structures. Banks can do it, but with proper oversight this should be reduced on the government side. In
recent years, the proliferation of anti-money laundering mechanisms has resulted from the use of big data
and artificial intelligence doing. Traditional anti-money laundering systems have lagged behind in the
face of evolving threats, and new technologies are helping AML compliance officers overcome.

6.1. CRIMINALIZATION:

The elements of money laundering are set forth in the UN Convention Against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances and Convention against transnational Organised Crime. It is defined
as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of
concealing or disguising the illicit origin of the property from governments.

6.2. ROLE OF FINANCIAL INSTITUTIONS:

All financial institutions structure their anti-money laundering efforts in slightly different ways, as the
same anti-money laundering laws and regulations are adhered to. Today, most financial institutions and
many non-financial institutions around the world need to identify suspicious transactions and their
national Financial Intelligence Units. For example, banks must verify the identity of their customers and,
where appropriate, monitor transactions for suspicious activity. This process falls under 'know your
customer' measures, which means knowing your customer's identity and understanding the types of
transactions they may engage in. Knowing their customers allows financial institutions to spot unusual or
suspicious behaviour, called anomalies, which are often indicative of money laundering. Bank
employees, such as cashiers and account managers, are trained in anti-money laundering and are
instructed to report suspicious activity. In addition, anti-money laundering software filters customer data,
classifies it according to the level of suspicion, and examines it for anomalies. Such anomalies include
sudden and large increases in funds, large withdrawals, or transfers of funds to bank secrecy jurisdictions.
Smaller transactions that meet certain criteria can also be flagged as suspicious. For example, structuring
can result in marked transactions. The software also flags transactions involving names on government
"blacklists" or countries hostile to the host country. When the software mines the data and flags
suspicious transactions, bank management is alerted. Bank management must decide whether to submit a
report to the government.
6.3. GLOBAL ORGANIZATIONS:

Established in 1989 by G7 countries, the Financial Action Task Force on Money Laundering (FATF) is
an intergovernmental body tasked with developing and promoting an international response to combat
money laundering. The FATF Secretariat is located at OECD Headquarters in Paris. In October 2001, the
FATF expanded its mandate to include combating terrorist financing. The FATF is the policy-making
body that brings together legal, financial and law enforcement professionals to achieve national legal and
regulatory AML and CFT reforms. As of 2014, its members consist of 36 countries and regions and her
two regional organizations. FATF cooperates with many international institutions and organizations.
These entities have FATF observer status and do not have the right to vote, but can participate fully in
plenary sessions and

working groups. The FATF has developed 40 Recommendations on Money Laundering and 9 Special
Recommendations on Terrorist Financing. The FATF will assess each member country against these
recommendations in a published report. Countries that do not adequately comply with such
recommendations are subject to financial sanctions. The three main functions of the FATF in relation to
money laundering are: Adoption and implementation of FATF anti-money laundering standards
worldwide. FATF currently consists of 34 member countries and two regional bodies representing most
of the major financial centres around the world.

7. WHERE IT OCCURS:

It is a consequence of almost all profit generating crime, it can occur practically all over the world.
Generally, money launderers seek out countries or sectors in which there is a no risk of detection due to
ineffective anti-money laundering program. Because the objective is to get the illegal funds back to the
individual who generated them, launderers prefer to move funds through stable financial systems.

Money laundering activity may be concentrated geographically according to the stage the laundered
funds have reached. At the placement stage, for example, the funds are usually processed relatively close
to the under-lying activity; often, but not in every case, in the country where the funds originate. At the
hierarchy level, the scammer can choose an offshore financial centre, a major regional business centre, or
a global banking centre (any location that provides adequate financial or business infrastructure). Funds
laundered at this stage can only pass through bank accounts in as many locations as possible without
leaving any trace of origin or final destination.

Finally, the consolidation phase allows money launderers to invest laundered money elsewhere in
countries with weak economies or in regions with limited investment opportunities.
8.EFFECTS ON BUSINESS:

The integrity of banking and financial services markets largely depends on the perception that they
operate within a framework of high legal, professional and ethical standards. A reputation for integrity is
one of a financial institution's most valuable assets. Where funds from criminal activity can be readily
processed through a particular institution, that institution may be subject to bribery by an employee or
director of that institution or because of the institution's disregard for the criminal nature of such funds.
may be drawn into active collusion with criminals or itself. Become part of a criminal network. Evidence
of such collusion is detrimental to the employment of other financial intermediaries and regulators, as
well as regular customers. The potential adverse macroeconomic impacts of uncontrolled money
laundering include unexplained changes in money demand, regulatory risks to banking health, and
contamination of legitimate financial transactions, increased international capital flows and exchange rate
volatility due to unforeseen opposing factors. - Transfer of wealth across borders. Because corruption and
crime pay off, successful money laundering undermines the health of society as a whole and undermines
democracy and the rule of law.

9.EFFECTS ON ECONOMIC DEVELOPMENT:

Money launderers are always looking for new ways to launder money. Economies with growing or
developing financial centres are particularly vulnerable to poor governance as countries in established
financial centres have implemented comprehensive anti-money laundering regulations. Differences in
anti-money laundering regimes in different countries are exploited by money launderers. Money
launderers tend to relocate their networks to countries and financial systems with weak or ineffective
countermeasures. One might argue that developing countries cannot afford to be too selective about the
sources of capital they attract. But delaying action is dangerous. The longer we delay, the more likely
organized crime will take root. The exposure of a country's commercial and financial sectors to the
control and influence of organized crime, as well as the erosion of the integrity of individual financial
institutions, has the effect of weakening foreign direct investment. Combating money laundering and
terrorist financing is therefore part of creating a business-friendly environment that is a prerequisite for
sustainable economic development.
10. WHAT GOVERNMENT SHOULD DO:

An incredible deal may be achieved to combat cash laundering, and, indeed, many governments have
already set up complete anti-cash laundering regimes. These regimes intention to boom focus of the
phenomenon – each in the authorities and the non-public commercial enterprise zone – after which to
offer the essential felony or regulatory gear to the government charged with preventing the problem.
Some of those gear encompass making the act of cash laundering a crime; giving investigative
organizations the authority to trace, capture and in the long run confiscate criminally derived assets; and
constructing the essential framework for allowing the organizations worried to alternate data amongst
themselves and with opposite numbers in different It is seriously critical that governments encompass
all applicable voices in growing a countrywide anti-cash laundering program. They should, for example,
convey regulation enforcement and monetary regulatory government collectively with the non-public
zone to permit monetary establishments to play a position in coping with the problem. This means,
amongst different things, regarding applicable government withinside the status quo of monetary
reporting systems, patron identification, accounting requirements and compliance reviews.

11. MULTILATERAL INITIATIVES:

Large-scale money laundering schemes always include a cross-border component. Money laundering is
an international problem, and international cooperation is essential to combat it. Many initiatives have
been taken at the international level to address this issue.

International organizations like UN and the Bank for International Settlements took the first steps to
address this problem in the late 1980s. Since the creation of FATF in 1989, regional associations (such as
the European Union, Council of Europe, Organizations of Americas, etc.) have set anti-money laundering
standards for member states. Regional organizations similar to the Anti-Money Laundering Task Force
have been established in the Caribbean, Asia, Europe and South Africa, and similar groups will be
established in the future in West Africa and Latin America.
12. MONEY LAUNDERRING CHARGES:

Rarely is a person charged with only a cash laundering offense. We generally see cash laundering costs
added in instances in which a person is being accused of drug conspiracy, mail and twine fraud,
racketeering (RICO), or a few different financially stimulated crimes. The authorities also can use
undercover "sting" operations to research and prosecute cash laundering offenses in which the cash isn't
always really "grimy cash. In these "sting" operations, a secret agent can say that the cash is "grimy"
although it's far without a doubt now no longer. In addition to those crimes, federal regulation
additionally makes it unlawful to go into a settlement to devote cash laundering. Money laundering
conspiracy costs are regularly added towards human beings who've simplest performed a small function
withinside the alleged crook interest. To show that a person has been worried in a cash laundering
conspiracy, the authorities have to display that there has been a cash laundering settlement and that the
character knew and changed into inclined to enroll in the cash laundering conspiracy. The authorities
does now no longer want to show that the character really treated the cash or did something precise to
facilitate cash laundering. Money laundering is a extreme offense below federal regulation. 18 Violations
of U.S. §1956 are punishable via way of means of up to twenty years in prison. Violations of 18 US
§1957 are punishable via way of means of up to ten years in prison. As with maximum federal monetary
crimes, the precise sentence is decided usually via way of means of the quantity worried withinside the
crime.

13. DEFENCES AGAINST MONEY LAUNDERING CHARGES:

In any cash laundering case, aside from an undercover "sting" operation, the authorities have to show
that the cash changed into in reality derived from a selected crook interest below federal regulation. The
authorities have to additionally show that the character being charged changed into conscious that the
cash have been acquired from crook interest. While the authorities does now no longer must show that
the character changed into privy to the precise crime worried, the authorities have to display that the
statistics and instances of the case could be sufficient to steer an affordable character to finish that the
cash blanketed the proceeds of unlawful interest. A character isn't always responsible of cash laundering
in the event that they in reality receive cash without understanding that the cash changed into acquired
thru crook interest. To convict a person of cash laundering, the authorities have to additionally display
that there has been a financial or monetary transaction worried. This commonly way that the authorities
could have to reveal that the character did something with the cash aside from positioned it in a secure or
their closet. Depositing the cash in a financial institution or spending the cash in any manner that allows
sell or hide crook sports could commonly be sufficient to reveal that a monetary transaction changed into
worried. Of course, anyways aside from an undercover "sting" operation, the authorities have to display
that the cash worried withinside the case really got here from the fee of certainly considered one among
listing of precise crimes blanketed via way of means of federal regulation. If the cash changed into now
no longer derived from such a precise crook sports, there may be no cash laundering conviction
irrespective of how the character acquired the cash or what the character did with it.

14. CONCLUSION:

Money laundering has always been and remains a big problem in any country. There are three main types
of criminals: passion crimes, violent crimes, and economic crimes. Whenever money laundering takes
place, they try to stay as far away as possible from the authorities who will persecute them. Billions of
dollars are laundered from state to state each year, and these money laundering activities are primarily
supported by financial institutions, organizations or intermediaries. Therefore, law enforcement agencies
must strictly enforce their KYC policies and continually review transactions that may involve money
laundering. However, due to the high margin of corruption in Asia and mainly in Vietnam. It is difficult
to be effective as these laws can be by pass and authorities can be acquired with a huge amount of money.
If corruption does not stop, one country will suffer a huge loss from an economic break down which leads
to poverty and many economic problems. Vietnam is a developing country which requires a huge amount
of foreign incentives and this is a point where money launderer will use these sources to exploit. Vietnam
should have a greater and effective law against it and reduce corruption if they want to control the illegal
money laundering process that is happening in the country. Financial institutions should also strictly
follow the law and policies also increase on monitoring possible money laundering transaction.