Money laundering
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Transcript of Money laundering
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Money Laundering
Presented By Absar Aftab Absar
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Approach
What is Money
Laundering?
How it has become a
Global menace?
Connection of Social
Justice with money
laundering.
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What is Money Laundering
Criminal Activity
Drugs/Arms trafficking, terrorism, extortion
Illegally obtained money
Money appears to originate
from legitimate source
Conversion
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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
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Processes involved in Money Laundering
PLACEMENT
LAYERING
INTEGRATION
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Placement
Immersion or Soaking
The physical disposal of bulk cash proceeds derived from illegal activity
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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
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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
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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.
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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.
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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.
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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.
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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.