Abstract
This chapter takes a look at the problem of money laundering from both the US’ and EU’s perspectives. It discusses globalization and the challenges associated with money laundering and terrorist financing which have led to increasing concerns in the international community. It also describes the incentives which pushed the international community to take action, the organization designated with the responsibility to deal with money laundering and terrorist financing, and its approach to tackle both issues.
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Notes
- 1.
Michel Camdessus, Managing Director of the IMF, in his address at the Plenary Meeting of the Financial Action Task Force on Money Laundering in 1998.
- 2.
The UNODC estimated the number or cocaine users worldwide to be approximately 16 to 17 million in 2007/2008, which is similar to the number opiate users globally. Of this amount, North America accounted for at least 40% of worldwide consumption, followed by Europe with more than 25% of consumption globally. Combined, both regions make up 80% or more of the total value of the cocaine market globally, estimated in 2008 at about US$88 billion.
- 3.
Per Giriraj and Mishra, huge earnings were also gained by criminal gangsters from prostitution, extortion, bootlegging liquor and gambling.
- 4.
See 2010 FATF Global Threat Analysis related to Cash and Bearer Negotiable Instruments.
- 5.
Per the FATF, trade-based money laundering is the process of concealing the proceeds of crime and transferring value by using trade transactions in an effort to legitimize their illicit origins or fund their activities. This can be done by falsifying prices, by underpricing or overpricing invoices as well as misrepresenting the quantity or quality of goods.
- 6.
Moveable goods consist of precious stones and gold, vehicles, art, antiques as well as machinery.
- 7.
The international conference in Shanghai, China in 1909 did not result in a convention. The 1912 Hague conference that followed resulted in the International Opium Convention, which was the first international drug control treaty.
- 8.
Article 20 of the 1971 Convention on Psychotropic Substances included measures for the prevention of psychotropic substances abuse as well as early identification, treatment of abuse and education, in addition to after-care, rehabilitation and also social reintegration. A similar scope of these measures is noted in Article 38 of the 1972 Protocol that amended the 1961 Convention.
- 9.
The FATF notes that the concepts applied to the harms noted in its GTA may differ among countries. Some harms detailed in the GTA may be applicable globally, while other may be specific to a country, and additional harms may exist that are not included in its report.
- 10.
See previous chapter for a more comprehensive review of the role of the FATF.
- 11.
See FATF’s website for more details, http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/?hf=10&b=0&s=desc(fatf_releasedate).
- 12.
See website address for more details on ICRG process, http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/more/moreabouttheinternationalco-operationreviewgroupicrg.html?hf=10&b=0&s=desc(fatf_releasedate).
- 13.
Per the FATF, these include securing addition information on the customer, information on the origin of funds and customer source of wealth and enhance surveillance of business relationship.
- 14.
Per the FATF, such measures range from particular elements to improve due diligence as well as systemic reporting of activities associated with the jurisdiction, to a prohibition of financial activities with the jurisdiction.
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Campbell, A.M. (2021). The Problems and Dimensions of Money Laundering and Terrorist Financing. In: Money Laundering, Terrorist Financing, and Tax Evasion . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-68876-9_3
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