Money_laundering - Money Laundering Money Laundering A What...

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Money Laundering
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2 Money Laundering A. What Is Money Laundering? B. What Is The Size of Money Laundering Globally? C. Examples of Money Laundering D. Stages of Money Laundering E. Organizations Combating Money Laundering 1. Financial Action Task Force (FATF) 2. International Organization of Securities Commissions (IOSCO) 3. Security Industry Association (SIA) 4. Securities and Exchange Commission (SEC) 5. Financial Services Authority (FSA) 6. Wolfsberg Principles F. Why Is Money Laundering An Important Concern for Securities Firms? G. Techniques That Should Be Employed by Brokers to Combat Money Laundering: 1. Know Your Customer (KYC) 2. Suspicious Activity Reporting 3. Risk Management Procedures H. Some Examples of Combating Money Laundering in Emerging Countries ( Indonesia- Lebanon- United Arab Emirates- Egypt ) I. Conclusion
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3 Money Laundering A. What Is Money Laundering? Money laundering is the process of concealing the existence, illegal source, or application of income derived from criminal activity. Money laundering results in disguising of the source of criminal income to make it appear legitimate. In other words, money laundering makes assets appear to have been obtained through legal means, with legally-earned income or to be owned by third parties, who have no relationship to the true owner. Money laundering activities produce substantial profits and create the incentive for money launderers to find a way to disguise those funds without attracting attention to the underlying activity involving money laundering and thus they avoid prosecution, conviction and confiscation of their illegal funds. B. What Is The Size of Money Laundering Globally? Money laundering occurs outside the normal range of economic statistics. International Monetary Fund has estimated the global volume of money laundering in 2001 to be between $1.6- $1.8 trillion (around 2 to 5 percent of the world’s GDP). Drugs accounted for one third of all money laundering operations, but corruption was equally dispersed. C. Examples of Money Laundering Examples of money laundering activities include organized crime, drug trafficking, prostitution, gambling, funding terrorism, illegal arms sales and smuggling. Regarding the financial services industry, money laundering activities include embezzlement, insider trading, bribery, tax evasion and fraud schemes. D. Stages of Money Laundering: The placement stage: the launderer introduces his/her illegal profits into the financial system. e.g. purchasing a series of monetary instruments (checks, money orders, securities, etc.)
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4 The Layering stage: the launderer engages in a series of conversions or movements of the funds through the purchase and sales of investment instruments, or the launderer might simply wire the funds through a series of accounts at various banks across the globe, thus giving these funds a legitimate appearance.
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