MONEY LAUNDERING

BY:-VIVEK SINGH RATHORE

Money

BLACK MONEY

WHITE MONEY

Money Laundering

Bill Gates

It means converting money gained by illegal acts such as drug trafficking and putting it into something that will show that the sum of money has been achieved legally.

willo'wisp

Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of the underground economy.

What is Money Laundering?

Nefarious activities of the criminals who

provide an envelope to “slush funds” in order to exhibit those as

genuine money.

INVOLVEMENT

Involves bankers,lawyers,car dealers,real estates builders, accountants and also others, who allow their businesses to be used by someone to launder the proceeds of a crime.

PLACEMENT •Layering

LAYERING •Placement

INTEGRATION •Integration

Money Laundering Process

Placement

Getting Currency into the financial system so as to convert illicit funds from cash straight into a financial instrument or bank account

LayeringThe movement of funds from institution to institution to hide the source and ownership of the funds, obscure the audit trail and sever the link with the original crime

Integration

The reinvestment of those funds in an ostensibly legitimate business so that no suspicion of its origins remains and to give the appearance of legitimizing the proceeds

Stages of money laundering

PLACEMENT

LAYERING

INTEGRATION

Effects:ML

Money Laundering Undermines Domestic CapitalFormation

Money Laundering Depresses Growth

Money Laundering Diverts Capital Away fromDevelopment

The perpetrators: money laundering by criminal

sectorMoney Laundering by Activity

Terroristgroups

1% Drugs26%

OtherOrganized

Crime23%

Smuggling29%

Embezzle-ment/WhiteCollarCrime21%

Source: Celent

Source: Celent

The victims: money laundering by industry sector

Money Laundering by Industry Sector

InsuranceFirms9%

CreditCards

5%

MoneyServices

4%Brokerage

&Investment

Firms27%

Banks55%

Totally Funds Laundered Worldwide

$800

$900

$1,000

$1,100

$1,200

2004 2005 2006 2007 2008 2009

US$

billio

ns

Money Laundering by Region(Total = $950 billion in 2006)

Asia-Pacific31%

Americas38%

Europe26%

MiddleEast -Africa5%

Source: Celent

Funds Laundered.......

AML-Meaning

Stoppage of illegal money generation

Laws,procedures,policies,etc. for money laundering activities

Tighter AML regulation in the US and Europe is pushing money laundering activity into Asia Pacific…

Money Spent:AML Programmes

AML Spending by Region - 2006

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Asia Europe US

US

$m

illio

ns

The state of AML…

Low

High

Industry AwarenessLow

Pro

gre

ss(I

mp

lem

enta

tio

n o

f sy

stem

s)

High

Australia

Hong Kong

JapanIndia

ChinaTaiwan

Malaysia

Singapore

South Korea

ThailandIndonesia

Philippines