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Money LaundryIts Social and Economic Impacts

By:AFIQAH NUR YAHYA (G1121044)NORSURIA BTE JANI (G1121916)NUR IFFAH MUHAMMAD NASIR (G1127580)NUR FATIMAH MOHAMED ALI (G1113136)

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Table of Content

1. Introduction to Money Laundry

2. Social Impact of Money Laundry

3. Economic Impact of Money Laundry

4. Case

5. Islamic Perspective

6. Solutions

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Definition of Money Laundry

Money Laundry is a method

to wash away the illegal

sources obtained fund in

order to conceal the truenature and source of fund

and transmit it to be seen as

legal.

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Washing dirty money

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3 Stages of ML

1

PLACEMENT

Introducing the illicit funds into the financial

cycle.

2

LAYERING

The moving and transferring of the funds in

order to disguise the origins and true ownership

of the money.

3

INTEGRATION This is when the criminal takes economic

advantage of the illicit funds and they appear to

have come from legitimate sources.

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Deposited in Deposited in Deposited in

Bank CBank A

Bank D Bank F

Bank BPLACEMENT

LAYERING

Legitimate businessINTEGRATION

Bank H

Bank G

Bank I

Bank E

Transferred toTransferred to Transferred to

Transferred to

http://www.soasoas.com/april/gallery/stillLife/

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The Social Impact Money laundering as the underpinning(base) of

transnational crime

Negative globalisation and societal integrationwith transnational crime

Transnational crime and money laundering: thedanger of xenophobia

Transfers economic power from the market,government, and citizens to criminals. (negativesocioeconomic effects)

Virtual take-over of legitimate government.

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The Economic Impact Loss control of economic policy

o Effect to GDP

o Effect to currencies and interest rates

Undermining the integrity of financial markets Economic distortion and instability

Undermining the legitimate private sector

Loss of revenue

Risks to privatization efforts

Reputation risk

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Case: Operation PolarCap (USA)

Largest single money laundering operation everbroken up by the U.S Government.

Example of greed and tunnel vision on the part of

bankers.Did not lodge suspicious transactions report.

Businesses used to make drug money.

Explosive cocaine (Crack) use among Americans.

The sales were washed through gold/jewelry businesses.

Demand for smuggling was higher= greateramount to launder.

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Islamic Perspective

Deceiving ConcealingUnlawful

trade

Unlawfulwealth

acquisition

*Islamic Economic System should reflect a

comprehensive system of and

principles.*

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Ways to Counter cumSolutions

The support of operational-level personnel in thejurisdictions affected

The need for greater transparency and oversight oftheir economies

To acknowledge at the international level thatcrime and corruption are intrinsically questions ofdevelopment

Global standards and international cooperation

Properly structured training and technicalassistance programs

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Conclusion