Money Laundering

Money
Launde

Sehrish
Jabeen
03
Romana
Nargus
01

Rida Farooq
02

Present

Money Laundering
The process by which a person
conceals or disguises the
identity or the origin of illegally
obtained proceeds so that they
appear to have originated from
legitimate sources.

Money
Launder
ing
Statisti
cs

Money Laundering Statistics

Reigons

Africa; 26% Asia; 23%

Middle East; 8%

Europe; 22%
Latin America/Caribbean; 10%

Multiregional; 11%
Contribution by different continents in ML(IMF
report data, year 2008)

Credit Cards; 5%
Money Services; 15%
Insurance Companies; 47%
Inverstment Firms; 25%
Banks; 8%

Contribution By Financial Sector In ML

2009)

(IMF Report Data, Year

Process of
Money
Laundering

Process of Money
Laundering
Placem
Getting ent
Currency into the
financial system so as to

Layeri
The movement of funds
ng
from
institution
to

institution to hide the

source and ownership of
the funds, obscure the
audit trail and sever the
link with the original
crime
The
reinvestment
of
those
funds
in
an
ostensibly
legitimate
business so that no
suspicion of its origins
remains and to give the
appearance
of

convert illicit funds from

cash straight into a
financial instrument or
bank account

Integration

Steps In Any Money Laundering

Process

Why
Launder
Dirty
Money at
All?

Motives For Laundering

Money
Basically there are two motives
for laundering money:
Avoiding suspicion and
Avoiding detection

Avoid
Prosecution
Hide
Wealth

Become
Legitimate

Evade Taxes

Increase
Profits

Over $1.5 trillion of illegal funds are laundered each year

Job Of Money Launderer

A money launder's objective in
laundering ill is to : Get it out; cover
it up; bring it back

Consequen
ces Of
Money
Launderin

Economic And Social

Consequences
Weakened legitimate private
sector
Weakened control over economic
policy
Less foreign private investment
Potential increase in crime and
corruption.
Misallocation Of Funds

Economic And Social

Consequences
Finances Terrorism:
Money laundering provides terrorists with
funds to carry out their activities.

Undermines Rule Of Law And

Governance:
Rule of Law is a precondition for economic
development Affects
Macro
Clear
and certain
rulesEconomy
applicable for: all
Money launderers put money into
unproductive assets to avoid detection

Economic And Social

Consequences
Affects The Integrity Of The
Financial System :
Financial system advancing criminal purposes
undermines the function and integrity of the
financial system.

Reduces Revenue and Control

:
Money laundering diminishes government
tax revenue and weakens government
control over the economy.

Common
Vehicles of
Money
Laundering

Common Vehicles Of
Laundering
Financial institutions
Cash intensive
businesses,
Brokerage firms,
Real estate agents
Crooked LAWYERS and
ACCOUNTANTS

(Not all the 3 stages of money laundering take

place in every case)

Factors Enforcing Money

Laundering

Acceptance Of Flight Capital By

Western Countries

Laws And Limitations Of Other

Countries

Jurisdictional Confl icts And Lack Of

International Coordination

Conti

Banking Role In Facilitation Of The

Activity

Bank Secrecy

Volume And Complexity Of International

Transfers Of Funds

Internet Based Banking

Conti

Shortfall Of Reporting Requirements

Criminals Infl uencing Government

And Bank Support

The Widespread Use And Acceptance

Of Trade Mispricing

What Do To
Against Money
Laundering?

Prevention of Money
Laundering
Observing Rules for
Bankers

Compliance with
Laws

Money
Laundering
Prevention

Identifying
Irregular / Suspicious
Transactions

Customer
Due Diligence

International Efforts
Financial Acton Task Force-1989
The Vienna Conventinon-1988
Basle Committee Statement of
Principles-1988
European Union Directive-1991
IOSCO-1992
Other