history of money laundering What is Money Laundering Money Laundering Methods International Initiatives Future Money Laundering techniques UK Legislation Laundering Offences Contact Us

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A Brief History

Taking a look into the origins of
Money Laundering.

What is Money Laundering?

Definitions of the phrase
"money laundering".

How widespread is the Problem?
Estimate of the amount of
cash being laundered

The Money Laundering Process

The 3 stages of Money
Laundering - Placement -
Layering - Integration.

Stages of the Process

How Money Laundering Stages
are achieved.

Money Laundering Methods

Techniques used by money

How Can We Prevent It?

Some measures to prevent this

Affects on Financial Institutions

How laundering affects financial
institutions, legally and

Business Areas Prone To Money Laundering

Which businesses are targetted
by the money launderer?

UK Legislation

Which legislation in the UK covers Money Laundering.

Money Laundering Offences

What the five basic offences of Money Laundering are.

International Initiatives

Some preventative measures in place on an international level.

The Future

Future methods of Laundering cash?


Some conclusions we have made about this area of criminality.


Some recommendations on what can be done to strengthen the fight against this insidious crime.



Owning a bank, as mentioned earlier in the text, is a classic means to launder huge sums of money. In Russia and some East European States, banks can be readily purchased for very little money- though few of them have electronic banking access to SWIFT. (SWIFT is the principal international service for wire transfer message traffic that initiates funds transfers. Besides banks, SWIFT provides services to (1) securities brokers and dealers, (2) clearing institutions, and (3) recognised securities exchanges. SWIFT is a co-operative society located in Belgium; it has more than 2,600 member institutions in 65 countries).

This is what the future nightmare envisioned by the authorities will be like - with organised crime in control of banks and able to launder huge sums of money, not only for themselves but for other criminal organisations. Already, in Russia it is said that criminal groups control over 400 banks and 47 exchanges. This is worrying bank chairmen in Russia as between 1994 to July 1995 there were thirty assassination attempts against top banking officials, sixteen of whom were killed. These killings along with earlier ones, were important indicators of the efforts by criminal organisations to infiltrate the Russian banking system. Infiltration of the banking system offers significant advantages for criminal organisations, not least the opportunity it gives to facilitate money laundering for both Russian and foreign criminal organisations.


The term cyberpayments is just one of many used to describe systems which facilitate the transfer of financial value (i.e., digital currency, e-money). In fact, these developments may alter the means by which all types of financial transactions are conducted and financial payment systems are operated. Such transactions may occur via the Internet or through the use of smart cards which unlike debit or credit cards, actually contain a microchip, which stores value on the card. Some Cyberpayments systems use both.

The common element is that these systems are designed to provide the transacting parties with immediate, convenient, secure and potentially anonymous means by which to transfer financial value. This system will, once implemented, have the potential to facilitate the international movement of illicit funds. The speed, which makes the systems efficient, and the anonymity that makes them secure are positive characteristics from the money launderer's perspective and it is this that makes it attractive to them. However, these same characteristics may actually impede law enforcement from obtaining necessary information to detect illegal activity. Specific concerns appear to be the impact of Cyberpayments on the effectiveness of current regulatory/policy initiatives against financial crime and the impact on traditional investigative techniques and analysis. There are also various international jurisdictional issues to be considered. The FATF say that one of the challenges for the future will be addressing the potential money laundering threats posed by the new payment technologies.


There are several systems of e-money. There are stored value cards such as MONDEX which is a rechargeable card (charged by putting it in a special slot in an ATM), and is both an access device and a self contained store of value. Further to this is Internet-based payment systems that use the Internetís telecommunications capability to facilitate financial transactions with other users. The personal computer which serves as the userís interface with the Internet payment system can also store value and is therefore, also an access device and self contained store of value.

Morris-Cotterill (How Not To Be a Money Launderer,1996) describes the Internet as being one of the greatest opportunities for laundering because of the total lack of traceable transactions, the use of encryption software will further make transactions totally secure. With the Internet, being connected to anywhere in the world is no problem and this will allow cross border movements of capital to take place. It remains to be seen whether money laundering managers take advantage of these new technologies to circumvent any legislation on other traditional laundering techniques (smurfing, wire transfers, bank drafts for example). It is however, a worry to the authorities.

With MONDEX, the way it works is that each card will have a pre-set limit. The limits on the cards will be set by issuing banks. Banks will be franchised on a trickle down basis with the big banks sublicencing little banks. With banks so easy to buy, what is to stop them from making a few cards with unlimited spending power? This system is already in operation in Swindon, UK. It transfers money from one card to another by telephone. It leaves a note on the card that a "private" transfer has been made, but no record of who private is. MONDEX can also make card to card transactions. This system is tailor made for money laundering unless some safeguards are put in place.