Money Laundering

1
The conversion or transfer of property, knowing
that such property is derived from any
offense(s), for the purpose of concealing or
disguising the illicit origin of the property or of
assisting any person who is involved in such
offense(s) to evade the legal consequences of
his actions”.

UN Vienna 1988 Convention Article 3.1 

 Prominent cases

 Liberty reserves bank  Model Ayaan Ali case

of US laundered laundering $506,000(ten
times higher than legit amount).
$6billion dollars in
2013
Causes of Money Laundering

 Tax Evasion
 Corruption
 Smuggling
 Drug trafficking
 Human trafficking
 Concealing ownership and true source of illegal funds
 Stages

• Placement
• Bank wire
• Casinos
• High value purchase
• Break down

• Layering
• Shell companies
• Smurfing
• Money mule

• Integration
• Property
• Assets
• invoices
METHODS

 Smuggling
 Trade( invoice)
 NGOS
 Round tripping
 Structuring of money
 Banks(money exchangers)
 Cash oriented business
 Foreign Exchange system
Money Laundering flow
INTERNATIONAL
SPHERE

DEVELOPING ECONOMIES
Impact on the National Economy

 Financial Sector (Banking _Customer Risk)

 Sterile Investments
 Capital Flight(lowers the growth)
 Balance of payment crisis(devaluation kicks in)
 Declining Tax revenue(implications for growth)
 Low FDI
 Emerging markets vulnerability
 Social Impacts
Crypto currency
_ a new tool of money laundering

• Crypto does not have

any Legal tender
• No Regularity
Authority
• Highly encrypted-
non traceable
• Peer to peer networks
• Gaming sites
Anti Money Laundering Standards

 International  National
 U.N.O.D.C  AIML ordinance
 INTERPOL 2007(abrogated in 2009)
 FATF  AIML ACT 2010

 US Patriot Act(2001)  Institutional control

Way Forward
 Strengthening compliance processes(Sanction scanner)
 Counter 3 steps of ML separately
 Improving tax system with solidifying Tax regulatory institution
 Legislation and regulation
 Sanction and penalties
 Whistleblower Protections
 Public Awareness and Reporting
 Cross-Border Collaboration
 Enhanced due diligence
THANK YOU!