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Anti-Money Laundering, What Are the Consequences of ML? (Increased Crime…
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What Is Money Laundering
Money laundering is the process of making dirty money look clean
Involves taking criminal proceeds and hiding their illegal source.
According to FATF (Financial Action Task Force), crimes such as
illegal arms sales,
narcotics trafficking
smuggling and other activities of organized crime
embezzlement
insider trading
bribery and computer fraud schemes
can generate huge amounts of proceeds, creating the incentive to “legitimize” the ill-gotten gains through money laundering.
Why Launder Money?
When a criminal activity generates substantial profits, the individual or group involved must find a way to:
use the funds without drawing attention to the underlying activity
or persons involved in generating such profits.
By disguising the sources, changing the form or moving the money to a place where it is less likely to attract attention.
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