What is money laundering
Money laundering is an illegal activity that relates to the disguise of the true nature, source or location of money. It is a serious offense as it enables criminals to evade taxes from money that has come from illicit sources. With the rise of global financial markets, money laundering is now considered to be easier than ever.
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Money laundering explained
Money laundering is the act of concealing the true origins of funds, particularly in relation to the conversion and transfer of money. With this activity, the money that is being dealt with has usually been derived from illegal sources, such as a theft.
Money laundering is something that occurs in almost every country in the world, and in many instances, numerous countries are involved in a given transfer, where money is converted into different currencies through several countries, making it easier to disguise the original source of the funds.
The rise of global financial markets means that money laundering is now regarded as relatively easy to carry out. If performed successfully, it enables criminals to have thorough cover over their source of income, and provide a strong level of control over their funds.
Although various international measures have been adopted to reduce money laundering activity, the amount of money that is laundered each year often amounts to billions of dollars. Many governments and international bodies have implemented stringent measures to reduce and prevent the occurrence of this activity, as it is detrimental to the financial systems of the countries affected.
In 1993, the Criminal Justice Act was introduced in the UK, which made the laundering of proceeds from non-drug trafficking crimes an offence for the first time. This is one of a number of acts that have been introduced internationally, in an attempt to combat the rising problem of money laundering worldwide.
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