Money Laundering

Presented By Absar Aftab Absar

Approach

What is Money

Laundering?

How it has become a

Global menace?

Connection of Social

Justice with money

laundering.

What is Money Laundering

Criminal Activity

Drugs/Arms trafficking, terrorism, extortion

Illegally obtained money

Money appears to originate

from legitimate source

Conversion

Concept of Money Laundering

Money laundering generally refers to ‘washing’ of the proceeds or profits generated from:

Drug trafficking

Arms, antique, gold smuggling

Prostitution rings

Financial frauds

Corruption, or

Illegal sale of wild life products and other specified predicate offences

Processes involved in Money Laundering

PLACEMENT

LAYERING

INTEGRATION

Placement

Immersion or Soaking

The physical disposal of bulk cash proceeds derived from illegal activity

Layering

“Soaping / Scrubbing”

The separation of illicit proceeds from their source by creating complex layers of financial transactions

These disguise the audit trail & provide anonymity

Integration

“Repatriation / Spin Dry”

Re-injecting laundered proceeds into economy so that they re-enter financial system as normal business funds

Provides an apparently legitimate explanation to criminally derived wealth

Why money laundering has become a global threat

Globalization of the markets.

Growth in the International trade.

Surge in the internationalization of organized crime.Quick transfer through financial wires and computer.

International Response

Vienna Convention 1988• Demanded signatories to enact domestic laws

criminalizing laundering of money derived from drug trafficking.

• Unfortunately it was not implemented globally.Strasbourg Convention of 1990• Council of Europe adopted it and by 1999 27 of 41

members ratified.• Demanded the same from the signatories except

to criminalize laundering of money derived from any serious crime.

Cont.…

Financial Action Task Force Recommendations (FATF)• Established by Group of seven

industrialized countries (G-7) in 1989.• Issued recommendations in 1990 called

forty recommendations to combat money laundering.

• Updated in 1996 and encouraged full implementation of Vienna and Strasbourg convention.

• It prepares annual Money Laundering report.

Social Justice and Money LaunderingLaws as mentioned above not effective enough to tackle the menace off Money Laundering.• We should have some laws by virtue of which the

proceeds of Money Laundering can be effectively used for the benefit of the society-

• The money generated through money laundering can be used to impart education among the deprived ones.

• Can be used for the eradication of poverty by providing dole to the needy ones.

• Can be used to pay Country’s debt.• Many other purposes for the society at large.

Conclusion

Money Laundering is growing at a at an alarming rate.

The proper implementation of the Vienna as well as Strasbourg Convention should be there.

The proceeds from the money laundering should be consumed for the benefit of the society to meet the ends of Social Justice.