Money_Laundry_Submission

Money Laundering

 

The process of transforming proceeds of crime into ostensibly assets or even making illegally gain of profits like dirty money is termed as money laundering (Maylam, 2002). In addition, the misuse of the financial system, which includes; digital currencies, traditional currency, and international sanctions is also considered as money laundering (Stipanuk, 2001). Money laundering has now become a global problem that undermines the integrity and stability of a country. The UK town of London has become a safe haven for money laundering, especially from the offshore companies that buys properties there to hide their corrupt money. About 10% of the properties in Westminster are owned by offshore companies with unclear records (Hanning and Connett, 2015). In this regard, the criminals involved in money laundering use the UK as a safe haven to clean their corrupt money.

Some practices that give rise to dirty money in the UK include; insider trading, illegal gambling, and drug trafficking made by people in power. In UK, banks did not allow the storage of enormous amount of money at ago as this may facilitate the act of money laundering (Rout, 2002). The use of drug money or buying of property in UK with corrupt money from other countries is considered money laundering. The UK government issues estimate in the whole country on a yearly basis to know how much money has been laundered. By the year 2004, it was estimated that more than £180 million worth of property are proceeds of laundered money. One of the ways that are used in hiding the laundered money is structuring, where money is broken into smaller deposits to remove any suspicion (Greene, 2011). The UK banks ignored the “know your customer” rules and this facilitates the rush of these criminals to the UK as a safe haven for dirty money. Lower deposit made with bank help reduce the reported cases of money laundering that might put the concerned person into major problems (Rout, 2002). Smuggling of cash from any jurisdiction and depositing it to financial institutions helps reduce cases of money laundering that is stored in banks. Money Launders stores their dirty money in banks that have less money laundering enforcement or have high secrecy. The banks benefit in return through storage charges and seek to ensure that the money kept in such places is safe from the legal forces. On the other hand, cash-intensive business is another strategy that is employed by banks in receiving huge revenues from the laundered money that they store (Greene, 2011).

Shell companies and trust mostly disguise the real owner of the money in their custody and they treat him as a factious owner to evade trouble with the law (Roule, and Kinsell, 2002). In casinos, people use illicit money, and they get high returns after the gambling process. Criminals disguise themselves in banks by buying larger interests in the banks so that they can store illicit money there without being caught. Money spent in the gambling process in some cases is dirty money, and a lot of scrutinization should be done to avoid this. A person can decide to buy a real estate with dirty money to hide his criminal identity and to avoid being caught. The ultimate goal of using the dirty money is for private enrichment at the expense of the negative economic repercussions (Mendes and Oliveira, 2013).

Challenges for money laundering investigators

Instigators in money laundering get a lot of difficulties in fighting this illicit act. One of the challenges facing the investigators is the fact that most of the properties are registered in offshore companies with hidden identities and this makes it complicated to trace their actual owners. In addition, the law also becomes a challenge since the UK laws allows for their property to be owned by secret offshore companies. Proper training is what most of the investigators lack as they are not prepared to deal with cybercrime (Pritchard, 2003). Then crime groups have sophisticated gadgets, and the investigators find it hard to beat them. Investigators are supposed to undergo some training regarding money laundering and how they can diagonize the amount of money laundered.

Sharing of information is very crucial to the local enforcement agencies, federal and the state government in fighting this crime. When information is shared, money laundering acts will be stopped in a very efficient manner. Information technology is what the government should invest in to get more and reliable information to prevent the illicit act (Pritchard, 2003). In optimizing their systems, the law enforcement agencies are required to spend more in the investigative theory to me sure that they fight down all the problems of money laundering.

Budgeting is also another challenge that limits the money laundering investigations. Proper budgeting for both technology and people is necessary for attaining fire power that will stop money laundering activities (Kaikobad, et. al., 2005). Mounting pressure is a problem faced by the investigation agencies in UK as they are required to cut down their cost to a minimum required budget. These agencies have no excuse rather than compromising with all the investments in technology, which are necessary in the investigation process. On the other hand, privacy right limits money laundering investigations to be done in countries associated with money laundering in UK (Greene, 2011). No matter how hard the investigators try to get data from such banks or institutions, they are not given access to them.

Impacts recognizing strategies

Recognising strategies to control money laundering problem will enhance cooperation, enforcement that will work to attain a counter-laundering measures. Establishment of a Financial Intelligence Unit (FIU) will result from money laundering management (Amoore and De Goede, 2005). FIU will comprise of bright minds like banking experts, financial analysts and investigators who are smartly trained in obtaining information that will lead to finding money laundering process. Banking secrecy laws in UK will be stopped, and it will be easier for the investigator to get all the information they are looking for.

In conclusion, reporting of suspicious information will be enhanced and make sure that all the information concerning money laundering is collected for analysis. Identification of bank customers will be made easier once strategies of managing money laundering are enacted. All the client’s records will be availed as well as then transaction information required for investigations and fighting money laundering process (Briggs, 2010). Anti-corporation between the bank and the investigators will be enhanced once the money laundering process is ongoing.

 


 

References

Amoore, L. and De Goede, M. 2005, “Governance, risk and dataveillance in the war on terror”, Crime, Law and Social Change, vol. 43, no. 2-3, pp. 149-173.

Briggs, A. 2010, “Decisions of British Courts 2009”, The British Year Book of International Law, vol. 80, no. 1, pp. 575-660.

Greene, E.F. 2011, “Dodd-Frank: a lesson in decision avoidance”, Capital Markets Law Journal, vol. 6, no. 1, pp. 29-79.

Hanning, J and Connett, D. 2015, London is now the global money-laundering centre for the drug trade, says crime expert. Independent. Retrieved from http://www.independent.co.uk/news/uk/crime/london-is-now-the-global-money-laundering-centre-for-the-drug-trade-says-crime-expert-10366262.html

Holder, W., (2003), “The International Monetary Fund’s involvement in combating money laundering and the financing of terrorism“, Journal of Money Laundering Control, Vol. 6, no.4, pp.383 – 387

Kaikobad, K., Hartmann, J., Warbrick, C. and Williams, S. 2005, “United Kingdom Materials on International Law 2004”, The British Year Book of International Law, vol. 75, no. 1, pp. 595-962.

Maylam, S., (2002), “Prosecution for money laundering in the UK“, Journal of Financial Crime, Vol. 10, no. 2, pp.157 – 158

Mendes, C., and Oliveira, J., (2013), “Money laundering and corrupt officials: a dynamic model“,Journal of Money Laundering Control, Vol. 16, no. 1, pp.55 – 61

Pritchard, A.C. 2003, “Self-regulation and securities markets”, Regulation, vol. 26, no. 1, pp. 32-39.

Roule, T.J. and Kinsell, J. 2002, “Legislative and bureaucratic impediments to suspicious transaction reporting regimes”, Journal of Money Laundering Control, vol. 6, no. 2, pp. 151-156.

Rout, P.A. 2002, “Digital Homes — For Richer for Poorer, Who are They for?”, BT Technology Journal, vol. 20, no. 2, pp. 96.

Stipanuk, D.M. 2001, “Energy management in 2001 and beyond: Operational options that reduce use and cost”, Cornell Hotel and Restaurant Administration Quarterly, vol. 42, no. 3, pp. 57-70.

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