Money Laundering

Hide Disguise

TRUE ORIGIN OF THE CRIMINAL PROCEEDS.

Criminals…Law Enforcement Authorities

Law Enforcement Authorities Reducing Crime

Criminals Retain Funds Recycle for Further Crimes

Predicate Offences (Unlawful Activities) Drug trafficking Counterfeiting Smuggling Theft Embezzlement Racketeering Tax evasion Kidnapping Illegal arms sales Bribery Illegal trade of cultural property

Laundering Process

Placement Layering Integration

Placement Problems 50,000$ of 10$ bills=2 feet high

A bill weighs aprrox. One gram There are aprrox. 454 bills per pound

50lbs of 10$ bills = 227.000$ 50lbs of 20$ bills = 454.000$ 50lbs of 50$ bills =1.135.000$ 50lbs of 100$ bills =2.270.000$ 50lbs cocaine = 600.000$ 50lbs marijuana = 300.000$

ECONOMIC IMPACTS OFMONEY LAUNDERING

Misallocation Of Funds Unpredictable Movements Of Funds Reputation Risk Undermines the Legitimate Private

Sector Economic Development issues Loss of Tax Revenue Loss of Control of Economic Policy Other

Estimation Of Laundered Money

%2-5 World GNP Annually 500 Billion to 1.5 Trillion USD (FATF) Approaches Issues

Hidden activities Difference in Predicate offences Black money>Laundered money

INTERNATIONAL EFFORTS

Financial Acton Task Force-1989 The Vienna Conventinon-1988 Basle Committee Statement of

Principles-1988 European Union Directive-1991 IOSCO-1992 Other

FAFT

40 Recommendations Country Evaluations Typology Studies Guidelines Mutual Evaluation Identifying Non-Cooperative

Countries and Territories

Latest FATF Report About NCCOT’s

NCCOT’s Jurisdictions Subject To The

monitoring Process

Off Shore Centers

Tax Evasion Evading Strict Regulation Money Laundering

Confidentiality Weak Supervision Owning a bank, company

Some Figures

Jurisdiction Banks Comp.Bahamas 305 47,040Liechtenstein 17 75,000Seychelles - 4,800Nauru 400 -

http://www.state.gov

A Brief History of Combating

1972 Bank Secrecy Act- US 1986 Money Laundering Control

Act-US Enactment Of Otter Countries Acts Emerge of Financial Intelligent

Units

Scope of The ACT’s Criminalization of Laundering Determining Predicate Offences Establishing Of a FIU AML Programs (Reporting, Identification,

Recording etc of Transactions.. Etc) Civil &Criminal Liabilities Other (Information Exchange,

Education..etc)

Basic FIU Model

1-Disclouseres transmitted to FIU

2-FIU receives additional information from law enforcement

3-Possible exchange with foreign counterpart FIU

4-After analysis, FIU provide case ti prosecutor for action

Egmont Group and Definition of FIU

EGMONT Group-1995 Central national agency responsible for

receiving, requesting, analyzing and disseminating to the competent authorities, disclosures of financial information, concerning suspected proceeds of crime in order to counter money laundering.

FIU’s of Some Countries

Security Markets

Industry Rely on Commissions Due Diligence has taken

Perception International, Large, Liquid Nature Availability of many Instruments

and Institutions

Securities Market (Cont)

Layering Stage Lack of Information IOSCO Resolution-1992 GAO survey of Securities Sector of

USA

Patriot ACT –Brokers/Delaers

Before Patriot Act Currency Transaction Reports Funds Transfers and Transmittals Suspicious Activity Reporting-Red

Flags Other

Patriot Act-Brokers/Dealers

SEC 312 Private Banking Account SEC 313 Correspondent Account SEC 314 Financial Institution

Cooperation Provision SEC 319 Domestic and Foreign

Bank Records Production

Patriot Act-Brokers/Dealers

SEC 352 Anti Money Laundering Programs

SEC 356 Suspicious Activity Report by the Securities and futures Industry

SEC 256 Customer Identification and Verification

Typologies

Typologies from FATF and Other Sources

Conclusion

Reducing Crime Since 1990’s Significant Steps has

taken Lack of Statistical Data Isolation of NCCOT’s from Global

Financial Community New Fighting Means Focusing on

Detecting