Module 7 (Kevin) II

8/2/2019 Module 7 (Kevin) II

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Money Laundering

Hide

Disguise

TRUE ORIGIN OF THE CRIMINAL

PROCEEDS.



Criminals…Law Enforcement

Authorities Law Enforcement Authorities

Reducing Crime

Criminals

Retain Funds

Recycle for Further Crimes



Predicate Offences (Unlawful

Activities) Drug trafficking Counterfeiting Smuggling Theft Embezzlement Racketeering Tax evasion

Kidnapping Illegal arms sales Bribery Illegal trade of cultural property



Laundering Process

Placement

Layering

Integration



Placement Problems 50,000$ of 10$ bills=2 feet high

A bill weighs aprrox. One gram There are aprrox. 454 bills per pound

50lbs of 10$ bills = 227.000$

50lbs of 20$ bills = 454.000$

50lbs of 50$ bills =1.135.000$ 50lbs of 100$ bills =2.270.000$

50lbs cocaine = 600.000$

50lbs marijuana = 300.000$



ECONOMIC IMPACTS OF

MONEY LAUNDERING

Misallocation Of Funds

Unpredictable Movements Of Funds Reputation Risk Undermines the Legitimate Private Sector Economic Development issues

Loss of Tax Revenue Loss of Control of Economic Policy Other



Estimation Of Laundered

Money

%2-5 World GNP Annually

500 Billion to 1.5 Trillion USD (FATF)

Approaches

Issues Hidden activities Difference in Predicate offences

Black money>Laundered money



INTERNATIONAL EFFORTS Financial Acton Task Force-1989

The Vienna Conventinon-1988

Basle Committee Statement of Principles-1988

European Union Directive-1991

IOSCO-1992

Other



FAFT 40 Recommendations

Country Evaluations

Typology Studies

Guidelines

Mutual Evaluation Identifying Non-Cooperative Countries

and Territories



Latest FATF Report About

NCCOT’s

NCCOT’s

Jurisdictions Subject To The monitoringProcess



Off Shore Centers

Tax Evasion Evading Strict Regulation

Money Laundering

Confidentiality

Weak Supervision

Owning a bank, company



Some FiguresJurisdiction Banks Comp.

Bahamas 305 47,040

Liechtenstein 17 75,000

Seychelles - 4,800

Nauru 400 -http://www.state.gov



A Brief History of Combating

1972 Bank Secrecy Act- US

1986 Money Laundering Control Act-US

Enactment Of Otter Countries Acts

Emerge of Financial Intelligent Units



Scope of The ACT’s Criminalization of Laundering

Determining Predicate Offences

Establishing Of a FIU

AML Programs (Reporting, Identification,Recording etc of Transactions.. Etc)

Civil &Criminal Liabilities Other (Information Exchange, Education..etc)



Basic FIU Model

1-Disclouseres transmitted to FIU

2-FIU receives additional information from law enforcement

3-Possible exchange with foreign counterpart FIU

4-After analysis, FIU provide case ti prosecutor for action



Egmont Group and Definitionof FIU

EGMONT Group-1995

Central national agency responsible forreceiving, requesting, analyzing and

disseminating to the competent authorities,disclosures of financial information, concerning suspected proceeds of crime

in order to counter money laundering.

FIU’s of Some Countries



Security Markets

Industry Rely on Commissions

Due Diligence has taken Perception

International, Large, Liquid Nature

Availability of many Instruments andInstitutions



Securities Market (Cont)

Layering Stage

Lack of Information

IOSCO Resolution-1992

GAO survey of Securities Sector of USA



Patriot ACT –Brokers/Delaers

Before Patriot Act

Currency Transaction Reports

Funds Transfers and Transmittals

Suspicious Activity Reporting-Red Flags

Other



Patriot Act-Brokers/Dealers

SEC 312 Private Banking Account

SEC 313 Correspondent Account

SEC 314 Financial InstitutionCooperation Provision

SEC 319 Domestic and Foreign Bank Records Production



Patriot Act-Brokers/Dealers

SEC 352 Anti Money LaunderingPrograms

SEC 356 Suspicious Activity Report bythe Securities and futures Industry

SEC 256 Customer Identification and

Verification



Typologies

Typologies from FATF and OtherSources



Conclusion

Reducing Crime

Since 1990’s Significant Steps has taken

Lack of Statistical Data

Isolation of NCCOT’s from GlobalFinancial Community

New Fighting Means Focusing onDetecting

Module 7 (Kevin) II

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