Anti-money laundering with the banking law module. Includes cases, perfect to revise from for an exam, and academic reading included to use for essays.
What is ML?
Definition: Lilley (2000): “Laundering is the method by which all proceeds of crime are
integrated into the banking systems and business environments of the world… This is the
process whereby the identity of dirty money that is the proceeds of crime and the real
ownership of these assets is transformed so that the proceeds appear to originate from a
legitimate source.”
taking illicit funds- criminal property and giving it the appearance of legitimacy
o Nothing you can do to wash the funds, all you can do is make them coexist
with legit funds so that enforcements cant tell one from the other
o All about appearance of legitimacy
o Broader meaning than we might expect- simply handling stolen goods is a
money laundering offence
o We are charging cirminals with ml offences when really it’s a theft offence- so
there are problems in terms of trying to put the rabbit back in the hat and
reign in the scope of offences
Quantifying the problem?
Efforts to quantify the amount of money laundered are nothing more than
estimates, however these serve to illustrate the size of the problem.
How much is money laundered? We have no idea- honest answer- these are best
guesses based on very limited information since criminals aren’t particularly minded
to respond to questionnaires or engage in detailed tax returns ect…
Estimates Globally:
o Financial Action Task Force - $590bn to $1.5 trillion;
o United Nations Office on Drugs and Crime - $800bn - $2 trillion;
o International Monetary Fund – 2-5% of the worlds GDP ($1.5 trillion plus).
Estimates in the UK:
o Financial Services Authority - £23bn - £57bn;
o HM Treasury - £10bn.
Globally, the most funds are channelled through the US.
Most common way of laundering funds is through the financial sector.
Given the City of London’s importance to the UK economy, it is imperative for the UK
to have strong AML / CTF controls.
Banks therefore act as the primary vehicle for the detection of laundering (aka, the
gatekeepers to the financial system).
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