Nowadays, the subject of Anti-Money Laundering has been associated with financial crime.
Money-laundering itself has been declared a crime; it best describes the misuse of the financial system, such as obtaining money from ‘illegal’ activities, such as extortion, insider trading, drug trafficking, illegal betting, and gambling.
Supposedly all movement of capital within a specific financial jurisdiction needs to pass via banks and financial institutions, and its origin should not arise any form of suspicion.
Some jurisdictions define money laundering as money which derives from a particular activity within that jurisdiction as ‘illegal’. Other authorities determine money-laundering as puzzling the source of funds, usually intentionally or merely by using financial services that do not track either the source or the destination of the money.
As money laundering is on the increase, regulatory and governmental authorities, both worldwide and local, are experiencing difficulties in issuing annual estimates for the amount of money being laundered.
The Financial Action Task Force (FATF) is an intergovernmental body set up to combat both money-laundering (AMT) and the financing of terrorism (CFT). It strives to protect the international financial system from the risks of money-laundering, funding of terrorism and to encourage higher compliance with the AML/ CFT standards.
In a public statement on 24th October 2014, the FATF identified jurisdictions that have strategic deficiencies which pose a risk to the worldwide financial system. Those jurisdictions were recognized as Iran, Korea, Algeria, Ecuador and so on. The FATF is working closely with these countries to address and improve the deficiencies.
The Bottom Line
Up until now, it has been impossible to release an accurate estimate of the amount of money being laundered globally, but, many researchers fear it is in the billions of US dollars.
The subject of money-laundering has become a significant concern for governments worldwide, and they have started to set up policies to prevent, deter, and restrict money-launderers.
Modern anti-money laundering policies have also interloped with policies on terrorist financing, which questions the ‘illegal destination’ of funds.
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