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The process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.
is the practice of engaging in specific financial transactions in order to conceal the identity. the metaphorical "cleaning of money" with regard to appearances in law. . source and/or destination of money and is a main operation of underground money.
small and large businesses. As a result. Today its definition is often expanded by government regulators (such as the United State Office of the comptrollerof the Currency) to encompass any financial transaction which generates an asset or a value as the result of an illegal act. In the past. members of organized crime (such as drug dealers or the Mafia) or of cults. the term "money laundering" was applied only to financial transactions related to organized crime. the illegal activity of money laundering is now recognized as potentially practiced by individuals. . through a complex network of shell companies based in offshore tax havens. corrupt officials. which may involve actions such as tax evasion or false accounting. and even corrupt states or intelligence agency.
. The increasing complexity of financial crime. and the speculated impact of capital extracted from the legitimate economy has led to an increased prominence of money laundering in political. In many jurisdictions. the increasing recognised value of so-called financial intelligence in combating transnational crime and terrorism. economic and legal debate. money laundering is seen as an "activity based" offense.
holding companies and offshore accounts. but many techniques were developed and refined then. Many methods were devised to disguise the origins of money generated by the sale of then-illegal evasion beverage Following AL capone¶s 1931 conviction for tax evasion. . After the 1934 Swiss Banking Act which created the principle of bank secrery. mobster Meyer Lansky transferred funds from Florida "carpet joints" (small casinos) to accounts overseas.HISTORY Modern development The act of "money laundering" was not invented until the Prohibition era in the United States. Meyer Lansky bought a Swiss bank where he would transfer his illegal funds through a complex system of shell companies.
as is often said. The first reference to the term "money laundering" itself actually appears during the Watergate scandal. transferring his funds to Switzerland and other offshore places. US President Rchard Nixon "committee to Reelect the President" moved illegal campaign contributions to Mexico. from the story that Al Capone used laundromats to hide ill-gotten gains. It was Meyer Lansky who perfected money laundering's older brother. The term of "money laundering" itself does not derive. referring to the process as "laundering." . ³capital fight". then brought the money back through a company in Miami. It was Britain's guardian [newspaper that coined the term.
the original Directive was revised in 2001 and replaced by another in 2005. The US and the UK have done so in 1986. and the 1988 Vienna Convention has required State Parties to introduce this crime in their domestic legal systems. . In 1989. the FATF was created. In 1991.International initiatives against money laundering The 1980s witnessed the international trend for the criminalization of money laundering as a discrete crime. recommended the criminalization of money laundering. Its first report. the European Union required its Member States to 'prohibit' the laundering of funds derived from drug offences. issued in 1990.
and integration. 3 Integration: refers to the return of funds to the legitimate economy for later extraction. . 2 Layering: refers to the creation of complex networks of transactions which attempt to obscure the link between the initial entry point and the end of the laundering cycle. 1 Placement: refers to the initial point of entry for funds derived from criminal activities. layering.PROCESS Money laundering is often described as occurring in three stages: placement.
Anti-money laundry in China China still facing tough situation in anti-money laundrying: official China to expand anti-money laundering inspection to securities. insurance institutions .
You said. . deputy secretary-general of China's State Council. said You Quan. There is still a room to improve for China's anti-money laundering efforts compared with international standard and the requirement of building a perfect marketoriented economic system.China still facing tough situation in anti-money laundrying: official China is still facing a tough situation in anti-money laundering. He called on relevant departments to establish an coordinated system and speed up building of a corresponding legal system with Anti-money laundering Law as the core. You Quan made the remarks while attending a conference on anti-money laundering in Beijing on Friday. which was chaired by Xiang Junbo. vice governor of the People's Bank of China (PBOC) .
It aims to become a member of the group in 2006. the central bank and the State Foreign Exchange Administration last year. Participants of the conference included representatives from 23 departments such as the State Council. China became an observer of the Financial Action Task Force on Anti-Money Laundering (FATF) in January this year. A total of 50 money-laundering cases were jointly investigated by police. the Ministries of Foreign Affairs. Public Security and Finance as well as the State Foreign Exchange Administration. A report on China's anti-money laundering effort in 2004. These cases involved 570 million yuan (70 million US dollars) and 447 million US dollars. showed that the country had made "outstanding achievements" in anti-money laundering in previous year. published by China's central bank on July 12. .
Xiang Junbo. insurance institutions The Oeople¶s Bank of China will expand its anti-money laundering special inspection to securities and insurance institutions.China to expand anti-money laundering inspection to securities. . which was jointly hosted by the People's Bank of China and the World Bank. the People's Bank of China conducted special inspections on commercial banks' compliance with anti-money laundering regulations. Xiang said. Xiang said this move aims to give full play to the role of finance institutions as "the first defense line" for combating money laundering and financing of terrorism. and jewel and cultural item auctions. made the remark at a high-level seminar on anti-money laundering and combating the financing of terrorism. From April to December 2004. a senior banking official said Thursday. vice governor of the People's Bank of China. making commercial banks pay more attention to the supervision over non-banking areas such as the transactions of real estate.
In April 2004. the People's Bank of China and the State Administration of Foreign Exchange have provided 1. . he said. Since the establishment of the center. he said.500 pieces of suspicious antimoney laundering clue to the police.096 billion yuan and 460 million US dollars separately. which is responsible for collecting and analyzing information of Renminbi and foreign exchange in respect of anti-money laundering work. helping them to crack 51 criminal cases in this area. The cases involved 3. The provincial branches of the People's Bank of China will continue its special inspections on anti-money laundering this year. the People's Bank of China built up the China anti-money laundering Monitoring and Analyzing Center.
payment systems and bank account management systems. the People's Bank of China is making efforts to sign memorandums on information exchange with other countries and regions in this regard. Source: Xinhua/International Finance News . Meanwhile. The People's Bank of China is making research on the coordination and connection among data bases. so as to make its inspection work more efficient. in a bid to face the new situation of more frequent international moneylaundering activities.
it is difficult to estimate the total amount of money that goes through the laundry cycle. The deeper "dirty money" gets into the international banking system. Estimates of the amount of money laundered globally in one year have ranged between $500 billion and $1 trillion. Because of the clandestine nature of money laundering. Rapid developments in financial information. This makes the task of combating money laundering more urgent than ever. the more difficult it is to identify its origin. . Though the margin between those figures is huge. technology and communication allow money to move anywhere in the world with speed and ease. even the lower estimate underlines the seriousness of the problem governments have pledged to address.And now Criminals are now taking advantage of the globalization of the world economy by transferring funds quickly across international borders.
the general trend towards financial deregulation. money in the form of symbols on computer screens) can move anywhere in the world with speed and ease. the use of the United States dollar in transactions) of black markets.e. Fuelled by advances in technology and communications.e. freezing and forfeiting of criminally derived income and assets-all the more difficult. These are the "dollarization" (i. There have been a number of developments in the international financial system during recent decades that have made the three F's-finding. . the progress of the Euromarket and the proliferation of financial secrecy havens. the financial infrastructure has developed into a perpetually operating global system in which "megabyte money" (i.
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