Money laundering has become a terrible menace throughout the world and the efforts to combat its spread form a major challenge to agencies fighting crime, top crime busters of the world have said.
“Any exercise involved in pursuing perpetrators of crime would necessarily involve a fight against money launderers. There is an increasing concern over such money transactions, as they are always linked to terrorists and terrorism, arms and drug dealers,” Stephen Head, Commander of the City of London Police said.
He was addressing a media conference on February 11, ahead of the first meeting of the Economic Crime Agencies Network (ECAN) hosted by the Serious Fraud Office (SFO) New Zealand at the Viaduct Events Centre in Auckland.
He said that money laundering was a global problem, especially in the wake of terrorist attacks in the US and UK in 2001 and that increased global cooperation would help stemming the flow of illegal money for illegal purposes.
SFO Acting Chief Executive Simon McArley said that New Zealand was also well aware of its international obligations in promoting Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures.
“All of us are committed to tracing money launderers and their sources. Organisations such as ECAN will help to combine our resources and strengths to fight against this international crime,” he said.
SFO New Zealand, SFO UK, the Federal Bureau of Investigation (USA), the European Anti-Fraud Office (European Union based in Belgium), Economic Crime Directorate (London City Police), Corrupt Practices Investigation Bureau (Singapore) Anti-Corruption Commission (Malaysian) and agencies representing a number of Asian countries were among those who attended the three-day conference, as reported in our February 15, 2013 issue.
Guarding market integrity
In a report released last year, International Monetary Fund (IMF) Deputy Managing Director Min Zhu said that effective anti-money laundering and combating financing of terrorism regimes were essential to protect the integrity of markets and the global financial framework as they help mitigate the factors that facilitate financial abuse.
“Money laundering and financing terrorism are financial crimes with economic effects. They can threaten the stability of a country’s financial sector or its external stability more generally. Action to prevent and combat money laundering and the financing of terrorism thus responds not only to a moral imperative, but also to an economic need,” he said.
Money laundering has been described as a process by which illicit source of assets obtained or generated by criminal activity is concealed to obscure the link between the funds and the original criminal activity.
Terrorism financing involves the raising and processing of funds to supply terrorists with resources to carry out their attacks.
According an IMF Factsheet, while the phenomena differ in key ways, they often exploit the same vulnerabilities in financial systems that allow for an inappropriate level of anonymity and non-transparency in the execution of financial transactions.
The G7 Summit, at its annual meeting held in Paris in 1989, established the ‘Financial Action Task Force (FATF) on Money Laundering to develop a worldwide standard for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). The 36-member inter-governmental body works in close cooperation with the IMF, the World Bank, the UN and many regional bodies.
According to a study conducted by the UN Office on Drugs and Crime, the (criminal) proceeds of organised crimes and drug trafficking was more than US$ 1.6 trillion, accounting for about 3.6% of global GDP in 2009.
Delegates attending the fourth AML & CFT conference organised by the Association of Certified Anti-Money Laundering Specialists held in Bali (Indonesia) in April last year were told that the Asia Pacific region was ‘over-represented’ in the crime statistics.
Harry Markopolos the world famous whistleblower, who played a crucial role in exposing the multibillion-dollar Ponzi scheme of Bernie Madoff, said that economic crime caused far more damage to an economy and a society than violent crime.
“White-collar criminals do the most harm, including leading people to commit suicide. You can steal a lot more if you are the chief executive of a bank than if you try robbing one of its branches,” he said.
Speaking about the media, Mr Markopolos said that it was more glorious for them to cover things with bloodshed and stabbings and shootings.
“While white collar crimes do not involve violence, they leave families in desperate straits and harm a lot of people in some grievous ways,” he said.
A related report appears in this section.