is Money Laundering?
widespread is the Problem?
Money Laundering Process
of the Process
Can We Prevent It?
on Financial Institutions
Areas Prone To Money Laundering
INTERNATIONAL INITIATIVES - PART 1
The increasing integration of the world’s financial system, as technology has improved and barriers to the free movement of capital have been reduced, has meant that money launderers can make use of this system to hide their ill-gotten gains. They are able to quickly move their criminally derived cash proceeds between national jurisdictions, complicating the task of tracing and confiscating these assets. Because of this, it has been recognised by many governments that close international co-operation was needed to counter money laundering, and a number of agreements have been reached internationally in order to counter this menace.
These agreements have been reached on two fronts - financial and legal.
BASLE STATEMENT OF PRINCIPLES
On the financial front, the Committee on Banking Regulation and supervisory Practices issued the Basle Statement of Principles on the prevention of criminal use of the banking system for the purpose of money laundering in December 1988.
The Statement of Principles does not restrict itself to drug-related money laundering but extends to all aspects of laundering through the banking system, i. e. the deposit, transfer and/or concealment of money derived from illicit activities whether robbery, terrorism, fraud or drugs. It seeks to deny the banking system to those involved in money laundering by the application of the following principles:
"All banks should formally adopt policies consistent with the principles set out in this Statement and should ensure that all members of their staff concerned, wherever located, are informed of the bank’s policy in this regard. Attention should be given to staff training in matters covered by the Statement. To promote adherence to these principles banks should implement specific procedures for customer identification and for retaining internal records of transactions. Arrangements for internal audit may need to be extended in order to establish an effective means of testing for general compliance with the Statement".