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 Interesting
fact!
The term "money laundering" is
believed to have originated from the
practice of mafia boss Al Capone, who
used laundromats to disguise the origins
of his illegal income from racketeering
and bootlegging during the Prohibition
era.
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 Money laundering
typically involves a
series of steps designed
to conceal the origins of
illegally obtained funds
and make them appear
legitimate.
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 TYPICAL STAGES OF
MONEY LAUNDERING
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 PLACEMEN
T G
This may involve breaking large
sums of money into smaller, less
suspicious amounts, which are
then deposited into banks or
other financial institutions.
Placement can also involve the
use of cash-intensive businesses,
such as casinos, restaurants, or
retail stores, to commingle illicit
funds with legitimate income.
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LAYERIN
This may involve multiple
transfers between accounts,
both domestic and
international, to make it
difficult for authorities to trace
the funds back to their illegal
source. Layering can also
involve the use of complex
financial instruments, such as
derivatives or shell companies,
to disguise the true ownership
and movement of funds.
INTEGRATIO
N
Where the laundered
funds are reintroduced
into the economy as
legitimate income or
assets. This may
involve investing the
funds in real estate,
businesses, or other
high-value assets, or
simply using them for
everyday expenses.
 PABLO
ESCOBAR
The infamous Colombian drug
lord and leader of the Medellín
Cartel, was known for his vast
wealth,. Some of the key aspects
of Escobar's money laundering
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scheme.
 Front Companies:

These legitimate-looking businesses provided a cover for the movement of illicit funds
and allowed Escobar to conceal the true source of his wealth.

Real Estate Investments:

Buying of luxury properties, including mansions, apartment buildings, and ranches,

using cash generated from drug trafficking. These real estate holdings served as a way to
launder money and store wealth while providing a veneer of legitimacy.
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 Money Smuggling

This often involved transporting large sums of cash hidden in vehicles, shipping
containers, or even through underground tunnels. Once the cash was outside Colombia,
it could be deposited into bank

Money Laundering through Banks:

Some banks, particularly in countries with lax regulations, turned a blind eye to the
source of Escobar's deposits, allowing him to launder millions of dollars through the
financial system.
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 OTHER AVENUES OF MONEY
LAUNDERING THROUGH
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LEVERAGING TECHHOLOGY
 Cryptocurrencies
The use of digital coins to engage peer to peer
transactions.

Online Platforms and

Marketplaces E-commerce platforms, online gambling sites,
and digital payment systems.

Cybercrime and Digital

Fraud Online banking systems, conduct phishing
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attacks.
 Money laundering
poses several
disadvantages to the
economy, society,
and financial
system.
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 Loss of Tax Revenue:

Laundered money often bypasses tax authorities, resulting in a loss of tax revenue for
governments. This deprives governments of funds that could be used for public
services, infrastructure development, and social welfare programs.

Negative Impact on Legitimate Businesses:

Create unfair competition for legitimate businesses by allowing criminal enterprises to
undercut prices, evade taxes, and operate outside the law. This can stifle innovation,
discourage entrepreneurship, and erode trust in the business environment.
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 Erosion of Financial Sector Integrity:

Undermines the integrity of the financial sector by facilitating corruption, bribery, and
other illicit activities. It can damage the reputation of banks and other financial
institutions.

The Philippine financial system carries a moderate risk of

being used for money laundering, terrorist financing and
as conduit for funding weapons of mass destruction,
according to the results of the latest multisectoral
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assessment done by the central bank.

 Fueling Organized Crime and Terrorism:

Provides financial support to organized crime groups, terrorist organizations, and

other illicit actors. This can perpetuate violence, instability, and insecurity in
society, posing significant risks to national security and public safety.

Social Costs:

Money laundering is often associated with the trafficking of drugs, weapons, and
human beings, as well as other forms of organized crime. These activities have
devastating social costs, including drug addiction, human exploitation, and violence,
which can harm communities and undermine social cohesion.
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 What is AML?
In the most general sense, Anti-
Money Laundering (AML) refers to
the collection of laws, law
enforcement, processes, and
regulations that prevent illegally
obtained money from entering the
financial system.
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 Who is using AML?
Financial institutions are the most
prominent users of AML legislation,
as they are compelled to report any
suspicious behavior to authorities.
However, financial institutions are
not only obligated to report
suspicious behavior.
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 The purpose of anti-money laundering
(AML) measures is to prevent the
illegal acquisition of funds through
criminal activities such as drug
trafficking, corruption, terrorism, and
fraud, and to ensure that financial
systems are not used to launder the
proceeds of such activities.
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Purpose
 Philippines' central anti-money
laundering/counter-terrorism financing
(AML/CTF) authority. As such, it
functions as the AML/CTF regulator and
supervisor, financial intelligence unit, and
primary law enforcement agency of the
Philippines against money laundering and
terrorist financing.
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 Assignment.

• Search the key components of

anti-money laundering
initiatives.
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