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Introduction to Financial Compliance
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It is the legal and moral duty of everyone to apply every provision in the financial
compliance laws and regulations with pin-point accuracy.
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“Laundering” is the Word
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The term ‘laundering’ is used because the techniques used are intended to turn ‘dirty’
money into ‘clean’ money. The US underworld coined the term through the use of launderettes
for fronting.
But of course laundering is not confined to cash.
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Turning a Big Buck
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The International Monetary Fund has estimated the amount of money laundered worldwide
at somewhere between $500 billion and $1.5 trillion each year; that is, 1.5 – 4.5%
of gross world product.
In the UK, the National Criminal Investigation Service (‘NCIS’) estimates that drug
money could account for as much as 1% of GDP, or around £8.5 billion a year.
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World without Frontiers
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Money laundering knows no frontiers. Money laundering is ubiquitous. Money laundering
is an evolving activity.
Unlike many of the world’s largest industries, crime is recession-proof, war-proof,
terrorist-proof and independent of the price of oil and interest rates. Against
this backdrop, the forces of globalisation have created new opportunities that criminals
have been quick to seize, with the result that the scale of global criminal activity
has grown to staggering proportions.
Money laundering allows criminals to maintain control over the proceeds of their
activities. It allows a criminal to spend the money safely, avoid suspicion and
thus detection, and avoid confiscation or forfeiture. Ultimately, then, it provides
a legitimate cover for the illicit funds.
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Next - The Typical Money Laundering Flowchart
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