Money Laundering

Abstract

Money laundering is the process used to disguise the source of money or assets derived from criminal activity. This is practiced by many people worldwide who do not consider the concept of ethical implications. Ethics is very important because it relates to customs and human behavior, such as dealing with the behavior of people, also has to do with the values of each person. Ethics teaches us to behave in society, also teaches values. Although there are many factors of money laundering, some are the high share of informal income and business, the existence of a parallel economy, or "black market" and inability or limitation of opportunities to exchange financial information with foreign law enforcement agencies. Method of money laundering includes removal of cash from the country by couriers or concealing the goods transported in order to further repatriation by foreign banks. Signs of legalization include repeated transfer of funds to the account during the day by different persons and purchase a large number of bank checks, letters of credit, other securities, the implementation of a set of mail and wire transfers.

Table of Contents

Introduction1

Discussion2

Factors that contribute to Money Laundering4

Methods of Money Laundering5

Signs of Legalization6

Methods of laundering "dirty" money7

Rules that govern Money Laundering9

Money Laundering and Financial Institutions10

Conclusion20

References22

Money Laundering

Introduction

Money laundering is the process used to disguise the source of money or assets derived from criminal activity. A wide variety of illegal activities are motivated by profit, including drug trafficking, smuggling, fraud, extortion and corruption. The importance of these products is enormous which ranges to some 590 billion to 1500 billion U.S. dollars worldwide every year. Money laundering facilitates corruption and destabilizes the economies vulnerable. Moreover, it undermines the integrity of institutions and legitimate financial systems and gives organized crime the funds necessary to undertake other criminal activities. This is a global problem involving many specialized techniques. Technical advances in the field of electronic commerce, global diversification of financial markets and new financial products provide further opportunities to launder the proceeds of criminal activities and to conceal the money trail from these activities. The techniques of laundering funds vary considerably and are often very complex, usually take place in three stages.

Placement, which involves placing the proceeds of crime into the financial system;

Dispersion, which involves converting the proceeds of crime into another form and creating complex layers of financial transactions in order to blur the audit trail and to disguise the origin and ownership of funds ( the purchase and sale of stocks, commodities and property);

Integration, which involves placing the laundered proceeds into the economy to give a legitimate appearance (Evans, 1991).

Discussion

Leadership is differentiated from moral leadership in a way that moral leadership helps the individuals differentiate right from wrong while leadership is simply about leading and influencing the people around us. It is important for the leaders to follow the moral values, however today we can find many leaders at all the levels who indulge themselves in immoral practices that may be beneficial for them and their supporters but they negatively ...