Money Laundering

Money laundering involves concealing the origin of illegal earnings so that they seem to be from a legal source. It’s usually an element of other grave criminal activities such as robbery, extortion and drug trafficking.

Where Does Money Laundering Occur?

Since money laundering results from almost all profit-generating crimes, it can occur anywhere in the world. However, most money launderers seek out countries with low detection due to weak or infective anti-money laundering programs.

Money laundering happens daily, and you can find it in areas you least expect, such as forestry/ environmental crime. Recently, the cryptocurrency market has worsened.

Criminal organizations move these illegal funds in several ways, such as shell companies, banking institutions, money transmitters or intermediaries. The criminal gangs do this to put illegal funds into legal businesses.

Money mules also play an important role in money laundering, knowingly or unknowingly.

How Money Laundering affects Businesses

The integrity of the banking services depends on the perception that it functions within a legal, professional, and ethical framework. For example, suppose funds can be processed through a particular financial institution because they bribed the staff or the bank turned a blind eye. In that case, the institution becomes part of a criminal network.

Any evidence that shows the collaboration of the financial institution will have a damaging effect on the attitudes of other financial institutions, regulatory authorities and customers.

As a negative macroeconomic consequence, money laundering cites unexplainable changes in money demand, risks of bank soundness and increased volatility in international capital flow.

Special Focus of INTERPOL Money Laundering

  • Environmental Crime

The INTERPOL, together with the UNODC, created LEAP. Its main focus is forestry crime and other crimes that result from it, such as tax evasion, corruption and money laundering.

LEAP is a project whose partnerships encourage uniting environmental agencies, local police forces, customs authorities and anti-corruption entities. The project’s main objective is to introduce a collaboration based on creating and implementing several environmental crime units.

  • Refugee Smuggling

INTERPOL’s Project FLYWAY is an initiative to counter trafficking humans and refugee smuggling. The most prone areas are from West and North Africa.

FLYWAY strengthens networks between inquiries of these crimes and investigations of financial crimes, and Norway’s Ministry of Foreign Affairs funds it.

How Fighting Money Laundering Helps Fight Crime

Money laundering is a threat that affects the global financial system. When law enforcement embarks on their investigations of organized crime, it’s the connection made through financial transactions that help locate and identify the criminals involved.

When criminal funds result from robbery, extortion, or fraud, a money laundering investigation is the best way to locate stolen funds and refund them to victims. Targeting money laundering criminals and depriving them of the funds means they can’t continue their activities.

Final Thoughts

INTERPOL works with several partners, such as the Egmont Group body with more than 160 Financial Intelligence Units and the Financial Action Task Force to help curb money laundering. INTERPOL’s initiative against money laundering focuses on areas such as environmental crime, smuggling and human trafficking.

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