Money Laundering

18 Oct , 2019

The goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act. Money laundering is the processing of criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source.

Illegal arms sales, smuggling and the activities of organised crime, including for example drug trafficking and prostitution rings, can generate huge proceeds. Embezzlement, insider trading, bribery and computer fraud schemes can also produce large profits and create the incentive to ‘legitimise’ ill-gotten gains through money laundering.

When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention. [Source: FATF, 2018. Webpage Money Laundering]