Money Laundering and

Transnational Financial
Flows
 Definition
A definition of money laundering that covers both legal and illegal
contexts is to take money that comes from one source, hide that
source, and make the funds available in another setting so that the
funds can be used without incurring legal restrictions or penalties.

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 Steps in Money
Laundering
The traditional money laundering process can
be divided into three steps:
1. Money is deposited in a bank or
financial institution. (Placement)
2. A set of complex transfers is made to
disguise the original source for the
money and to hide the audit trail. (This
step is called layering the
transactions.)
3. The money is integrated back into the
legitimate money supply. (Integration)

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 Cybercash Creates New
Laundering Opportunities
Using the Internet, it will be possible for anyone to
transfer large sums of money from one location to
another without using a bank and with the transfers
being totally anonymous.

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Cybercash Creates New
Laundering Opportunities
Today, cybercash transactions are beginning to
take place without the need for third parties and
the consequential scrutiny that might otherwise
exist.
Furthermore, cybercash transfers can be
structured so that they originate in a jurisdiction
where such activities are not considered illegal.

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Possible Users of Money

Laundering Practices
 Grant recipients
 Criminals
 Political asylum seekers
  Monitoring software
 Currency Transaction Reports
(CTRs)
Tools Banks  Suspicious Activity Reports
(SARs)
Use to
Identify
Money
Launderers

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 Shell banks are generally high-risk banks
that exist without any physical presence in
any legal jurisdiction. These banks have a
Shell banking license in a specific country, but
they are not likely to have a staff and may
Banks be operated as part of another business or
operated out of an individual’s personal
residence.

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 An offshore banking license prevents the
organization from transacting banking
Offshore activities with any citizens of the licensing
jurisdiction or transacting business with
Banks the currency of the licensing jurisdiction.
These bank operations solely exist within
international financial transactions.

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Cash-  Currency exchanges

 Online auctions
Oriented  Casinos

Businesses Purchasing departments


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 Laundering cycles
Audit Trail 1. Illegal cash
2. Deposited into bank
3. Purchase asset
4. Sell asset
5. Documented legal cash
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Finding Money
Laundering Schemes
Tracing IP addresses
Web logs HTTP common
logfile format

Wire transfers

Bank reports

IRS Form 8300

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Relevant Bangladesh Money Laundering


Prevention Act, 2012

Law in Bangladesh Bank Financial


Intelligence Unit
ICAB Data Verification System
Bangladesh

(DVS)