How can Money Laundering Affect your Business?
In 2018, anti-money laundering (“AML”) regulations and enforcement measures are reaching new heights across the globe. While some countries, such as Colombia, are rife with illicit profits from criminal enterprises, they have also made strides in recent years strengthening their AML and terrorist financing programs. Other nations, however, facilitate money laundering through weak AML legislation, corruption, and lack of transparency surrounding financial flows. Money laundering undermines the integrity of a business, and the financial sector as a whole.
Institutions can become complicit in criminal enterprises, leading to damaging scrutiny from regulatory authorities, customers, and other businesses. Countries rampant with money laundering have witnessed entire industries overtaken by organized crime, leading to increased levels of bribery, corruption and criminal activity in their societies.
How is money laundering accomplished?
Initially, illegal profits are placed into the financial system, such as through monetary instruments or small deposits. Second, the launderer engages in a series of movement of the funds to distance, or, “layer” them away from the source. Finally, the funds are integrated back into the economy, such as by investing them in real estate or business ventures.
In this day and age, as technology increases exponentially, so too does the potential for money laundering. Methods include laundering through electronic transfer of funds, private banking, money remitters and money exchange houses, insurance companies, and securities broker-dealers. Alternatively, launderers also use casinos, travel agencies, and vehicle sellers to hide illicit gains. Shell companies and trusts are commonly used to mask beneficial ownership, many of which are located offshore.
Which regions should I be most concerned with?
Of the United States Department of State’s 2017 list of 88 countries of primary money laundering concern, 37 of these countries are located in Latin America. In addition, other noteworthy countries on the list include Canada, India, Portugal, Russia, Spain, Turkey, Ukraine, the U.A.E, and the United Kingdom.
Uncovering complex money laundering schemes requires professional assistance. Vcheck Global’s team not only includes investigators with expertise in financial investigations, but those who specialize in anti-money laundering investigations, particularly across foreign jurisdictions. This allows Vcheck Global to best serve our clients across a variety of sectors, including financial institutions and law firms. Vcheck Global helps you know more about the people and companies you do business with.
Brock Treworgy
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