Money Laundry - July 1999 Policy Brief Financial Action...

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Policy Brief Organisation for Economic Co-operation and Development © OECD 1999 July 1999 Financial Action Task Force Financial Action Task Force on Money Laundering FATF - OECD Introduction The goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source. Illegal arms sales, smuggling, and the activities of organised crime, includ- ing for example drug trafficking and prostitution rings, can generate huge sums. Embezzlement, insider trading, bribery and computer fraud schemes can also produce large profits and create the incentive to “legiti- mise” the ill-gotten gains through money laundering. When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention. In response to mounting concern over money laundering, the Financial Action Task Force on money laundering (FATF) was established by the G-7 Summit in Paris in 1989 to develop a co-ordinated international response. One of the first tasks of the FATF was to develop Recommendations, 40 in all, which set out the measures national governments should take to implement effective anti-money laundering programmes. Members of the FATF include 26 countries and jurisdictions – including the major financial centre countries of Europe, North America and Asia – as well as the European Commission and the Gulf Co-operation Council. The FATF works closely with other international bodies involved in com- bating money laundering. While its secretariat is housed by the OECD, the FATF is not part of the Organisation. However, where the efforts of the OECD and FATF complement each other, such as on bribery and corrup- tion or the functioning of the international financial system, the two sec- retariats consult with each other and exchange information. This Policy Brief discusses the phenomenon of money laundering, how it works and the reasons why it should be combated. It also describes the work of FATF in confronting the problem. What is the scale of the problem? How is money laundered? Where does money laundering occur? How does money laundering affect business? What influence does money laundering have on economic development? What is the connection with society at large? How does fighting money
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This note was uploaded on 04/04/2012 for the course AASTT 24 taught by Professor Khlilaburass during the Spring '12 term at Arab Academy for Science, Technology & Maritime Transport.

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Money Laundry - July 1999 Policy Brief Financial Action...

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