Current Money Laundering Threats and Trends - Free Essay Example

Sample details Pages: 6 Words: 1880 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Tags: Act Essay Money Essay Did you like this example? Current money laundering threats and trends Traditional Money Laundering Typologies Structured Transactions Deposited to Financial Institutions It is true to say that the smuggling of prohibited goods will bring a huge amount of money to smugglers. That money, in the end, must be integrated into the economy in order to be used. The transfer of cash through banking system is considered as the most efficient and effective way. Don’t waste time! Our writers will create an original "Current Money Laundering Threats and Trends" essay for you Create order The cash can be moved quickly and electronically in a safe environment. However, jurisdictions would like to make the requirements and policy of transferring cash over a certain amount of money. In other words, financial institutions have to make a report of cash transaction for a regulated amount of cash. For smugglers of drug trafficking or some other banned things, cash transferring is safe and quick, however those cash will be investigated by banks and relevant agencies. As a result, in order to avoid the generation of these reports and the detection, criminals would like to structure their banking transactions. In detailed, they will open different accounts and cash amount at different banks. Since banks and financial institutions have applied the requirement of financial report more strictly and the required Suspicious Transaction Reporting has been developed, criminals would like to find the other ways for laundering their dirty money. This Suspicious Transaction Reporting is required in United States. Whenever banking employees suspected the sources of cash or they had reason to make a doubt that the cash could come from illegal actions; or they were informed that criminals wanted to change the cash into legal funds, the suspicious transaction reporting must be submitted. As a result, the required suspicious transaction Reporting can limit and prevent criminalsà ¢Ã¢â€š ¬Ã¢â€ž ¢ illegal activities in Money laundering. Cash Couriers and Bulk Cash Smugglers (BCS) The money laundering by cash couriers and bulk cash smugglers can be clearly explained by the long statement à ¢Ã¢â€š ¬Ã…“the most obvious technique involved employees of the criminal organization smuggling cash from the consumer country of the illegal product to the distributor, or from the criminal to the foreign bank secrecy destination where he or she had arranged for the currency to be investedà ¢Ã¢â€š ¬Ã‚ . Cash smuggling is divided into two categories including cash courier and bulk cash smuggling. In terms of BCS, criminals would like to smuggle cash with a huge amount. The transportation and delivery of cash can be implemented by some forms such as the involvement of land , sea border or cash concealed in vehicles or cargo containers. Criminals will cross the border illegally through sea or land to bring cash to receivers who also are criminals. Moreover, they can find somewhere in vehicles or cargoes or containers to hide illicit cash. For cash couriers, they are nat ural people and transport illegal cash with them. More clearly, they will conceal the cash into somewhere of their bodies or hide the illicit cash in their luggages which they bring with them. Among methods of the cash transportation, cash couriers prefer the transportation through commercial airline. It seems that the transportation through commercial airline will be less controlled and be faster. Consequently, the risk is less. For both cash courier and bulk cash smuggling, the money, which has larger denomination, will be used. The reason is that the larger denomination money will reduce the weight and size of the cargoes or luggages or vehicles or containers. The illicit cash transportation will be with a small quantity for the first time, then the quantity of the cash will be increased in next times. The purpose is to avoid risk of avoid the risk of being detected. In order to prevent and solve issues related to cash couriers and bulk cash smugglers, the International standa rds on combating money laundering and the finance of terrorism and proliferation (FATF) Special Recommendation IX was borned[1]. Following this regulation, countries have to implement à ¢Ã¢â€š ¬Ã…“either a declaration or disclosure system for detecting the cross-border transportation of currency and bearer negotiable instrumentsà ¢Ã¢â€š ¬Ã‚ . Besides, if border officials suspect the origin of cash or this kind of cash transported for illegal purposes, they will have responsibilities to seize the currency or bearer instruments. Lastly, people who are related to the action of illegal transportation such as providing false disclosures or declarations will be penalized by jurisdictions. The confiscation of currency or instruments related to terrorist financing or money laundering will also be carried out. The FATF is very helpful in issuing a Best Practice guidance paper, which support jurisdictions in recognizing the illicit cash[2] Money Service Businesses and Informal Value Transfer Systems The money laundering and cash transporting through central banks and commercial banks are very risky. Consequently, criminals, especially terrorists will choose non-banking financial institutions or service businesses since these organizations pay less attention to money laundering and regulations of money laundering. Hence, the risk of dirty money detected is not high. The illegal money circulation will not encounter barriers. Among those organizations, Western Union and Money Gram can recognize the harm of money laundering. Therefore, they have complied with the reporting requirements and well- cooperated with the law. In contrast, smaller ethnic-based money services businesses including grocery store, travel agency, and so on do not identify their responsibilities of anti à ¢Ã¢â€š ¬Ã¢â‚¬Å"money laundering and terrorist activities. As a result, criminals take advantage of organizationsà ¢Ã¢â€š ¬Ã¢â€ž ¢ deficits to launder their cash. Western Union and Money Gram are in charge o f different financial activities, for example wire transmission, exchange of foreign currencies, cash checking and sales of money orders à ¢Ã¢â€š ¬Ã‚ ¦etc. The transaction between Western Union, Money Gram and their customers takes place within United Nations and foreign countries. In the aspect of Informal Value Transfer Systems, it is popular in North Africa, Middle east, the horn of Africa and South Asia. The Informal Value Transfer System can be called à ¢Ã¢â€š ¬Ã…“ hawalaà ¢Ã¢â€š ¬Ã‚ . Its mechanism of action is to à ¢Ã¢â€š ¬Ã…“allows hawaladars from all parts of the world to transfer funds to and from their clients by setting debts between themselvesà ¢Ã¢â€š ¬Ã‚ . Trade-based Money Laundering Except for Structured Transactions Deposited to Financial Institutions, Cash Couriers and Bulk Cash Smugglers, and Money Service Businesses and Informal Value Transfer Systems, criminals use the Trade-based Money Laundering for their ethical behaviors. This method is very sophisticated. The quantity and value of cash is transported by falsifying invoices, or writing invoices under or over real invoices of commodities which are imported or exported. In other words, criminals will buy a quantity of commodity and the amount of cash for the commodity is 10 thousands dollar, for example; However, when writing the invoice, they will require their seller to note on the number of 5 thousands dollar. This phenomenon is popular in import and export operations. The purpose is to get tax evasion or to get tax application at low rate. Criminal also use over-invoicing commodities to hide the move of cash through complex and complicated documents. By this money laundering, criminals sometimes can associate with legal trade activity. Colombian drug cartels prefer to use trade based money laundering. It is popular in the way that they buy drug from other countries and resell it in their country. They also sell drug to other countries. The transportation of their drug is carried out through a common method named the Black Market Peso Exchangeà ¢Ã¢â€š ¬Ã‚ . Both Western Union and Gram money of Money Business Service and hawaladas of informal value transfer systems use trade based money laundering to settle the debts which is rised from foreign remittances. In short, criminal will buy commodities from a foreign country and transfer cash to the other country where the commodity will be sold, the proceeds will be sent to intended recipient. The trade based money laundering has nine indicators of red flag such as à ¢Ã¢â€š ¬Ã…“vendor payments made in cash by unrelated third parties; vendor payments made via wire transfers from unrelated third parties; vendor payments via che cks, bank drafts, or postal money orders from unrelated third parties; false invoicing and customs documents including commodity misclassification or commodity over valuation or under valuation; carousel transaction; commodities traded do not match the business invoiced; unusual shipping routes or transshipment points, packaging inconsistent with commodity or shipping methods; and double invoicing.à ¢Ã¢â€š ¬Ã‚  Emerging Technologies Previously internet, social network and technology do not develop as it is now. Therefore, criminals have to choose traditional money laundering typologies above for their illegal actions. In recent some decades, the boom of science and high technology has changed the method of money laundering. The below is three methods of ML in modern time. Prepaid Value Cards In order to make payment more convenient and quicker, FAFT issued a new method of payment in October of 2006. This method encourages legitimate trade organizations to use because of its convenience. However, the money launders have taken advantage of this advancement for their personal objectives. This issue has made non- banks busier in their service business. The opportunity to earn profit is higher through offering prepaid value cards, electronic purses, mobile payments, internet payment services and digital precious metals. Nevertheless, money-laundering criminals have considered those features as good methods for their money laundering purposes. In comparison to the ATM system which the surveillance camera is used, the new payment methods can help criminals avoid the supervision of financial providers. Hence, the possibility of being identified is lower. The other advantage and convenience of those payment methods is easy to access at any time and in anywhere of the world as l ong as the place has wifi, phone reception, or internet is connected. Compared to traditional cash transferring, those methods have more convenient [3]. Online Payment Systems The appearance of high technology and the boom of internet have brought many benefits to users. However, it has also created a dark side. Hackers can stole cash from banks and credit card information and information related to financial institutions. Money launders can make illegal funds disappear in dozens of different online accounts (Grow and Brian, (2006). These criminals will make those accounts difficult to be explored. As a result, online payment system, to some extent, can cause a danger to society and the financial system [4] Increased Use of Gatekeepers to Establish Sophisticated Trusts Along the development of technology and online network, the operation of money laundering is more and more sophisticated. Gatekeepers now have become more dangerous threat to society than the previous time. They are professional accountants, lawyers, and companies that provide service. Their participation in money laundering has contributed to the success of money laundering activity. They can directly launder money or be the third party to serve money-laundering process. According to FATF, Political Exposed Persons is regarded as gatekeepers because they are able to access to the funds and systems in their nations. Consequently, many of these gatekeepers have done tasks for personal aims. Furthermore, they are allowed to adjust the financial legislation or rules for personal purposes [5]. As a result, unmoral gatekeepers are very dangerous for society in general and for financial system of that country in particular. [1] https://www.fatf-gafi.org/dataoecd/50/63/34424128.pdf, [2] https://www.fatf-gafi.org/document/19/0,3343,en_32250379_32236920_43775315_1_1_1_1,00.html, [3] Global Money Laundering Terrorist Financing Threat Assessment(July 2010) https://www.fatf-gafi.org at pp. 34-35 [4] Grow, Brian, à ¢Ã¢â€š ¬Ã…“Gold Rush: Online payment systems like E-gold Ltd. are becoming the currency of choice for cybercrooks.à ¢Ã¢â€š ¬Ã‚  Bloomberg Business Week (Jan. 9, 2006) [5] https://www.fatf-gafi.org/dataoecd/48/10/45724350.pdf at p. 44

A Short Note On The Treaty Of Versailles - 1560 Words

Treaty of Versailles Essay During the years of 1914 to 1918, the first World War was fought resulting in a very destructive war. The war suffered approximately 10 million casualties and the ‘Western Front’ was totally destroyed. This also left many areas in Europe being destroyed too. On November 11th, 1918, Germany signed a cease-fire called ‘the Armistice’, and surrendered. In January, delegates from several countries met in Paris, France to discuss a peace treaty in hopes of ending the war. There were three important leaders, each with different ideas: Woodrow Wilson, George Clemenceau and David Lloyd George. The Germans were not extended an invitation to the meeting, but were forced to sign the treaty, no matter what the conditions were. The document became known as the Treaty of Versailles, which later was not implemented successfully. The Treaty of Versailles was signed in June 1919 and was the peace settlement that was supposed to end World War I. The failure of the Treaty of Versailles caused economic downfall and German expansion, which all contributed to the start of World War II. Another downfall of the treaty, further lead to the rise of Adolf Hitler and the fascist party. Many feared the start of a second World War. Contributions from President Wilson’s Fourteen Points, United States’ policies and international effort, were made to prevent World War II. While the war was still taking place, Woodrow Wilson, President of the United states, proposed a planShow MoreRelatedA Short Note On The Treaty Of Versailles Essay1532 Words   |  7 PagesTHE TREATY OF VERSAILLES Name Course Date of Submission As World War I approached its close, the Treaty of Versailles was among the peace treaties signed. It marked the end of warfare between the Allied Powers and Germany. The signing of the agreement occurred in 1919. The main reason behind the signing of the accord was to reprimand Germany for its part in the damage that happened in WWI. 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Seven External Factors That Could Influence Business And Marketing Efforts Free Essays

This paper will follow a young business as it begins the process of establishing itself in the legal world. There are several factors that business must consider before choosing what type of originations the business will become. In the case of this new company they have opted to become an S corporation. We will write a custom essay sample on Seven External Factors That Could Influence Business And Marketing Efforts or any similar topic only for you Order Now An outline of what lead to this decision will be discussed in-depth. In addition the steps that were taken to complete this task. Business Scenario As the reality of the business begins, it becomes very clear that we must start making the necessary steps to legalize the organization. The first step is to registering the business name. After registering Gentle Clean, we must make a decision on whether to become a corporation or a partnership. The first thing that must be considered is making sure that the business is its own entity. It’s very important that the business and its affairs do not affect our personal lives. As well as anything personal rolling over to the business. A LLC is seen as its own legal entity and is treated as completely separate and distinct from its members. An LLC can be sued, can sue, can enter into contracts, and be found liable both civilly and criminally all on its own, separate from the members of the LLC. In addition a LLC can be member- or manager-managed, which determines who has authority to bind the LLC in contracts. A LCC can be taxed as a partnership, resulting in the income being taxed to the partners’ own tax returns, or corporation, meaning it would be taxed as its own entity. C corporation and S corporation have limited liability protection for the owners, and each is seen as a separate legal entity from the owners. The main difference between the two is taxation. The C corporation files its own tax return, and while the S corporation must file corporate tax returns, it does not pay taxes at the corporate level. Rather, the profits of the corporation are passed through to the individual to the shareholders on their own individual tax returns. Reviewing the two options one point must be seriously reviewed. The matter of taxation is of serious importance, and which way we proceed. Both an LLC and S corp and C corp are their own entities. Yet very different in other aspects. We must decide whether to pay taxes at a cooperate level, or have the profits of the corporation are passed through to the individual to the shareholders on their own individual tax returns. Federal taxable income is between 15% and 35%, state and local taxes vary on income. Shareholders of most corporations are not taxed directly on corporate income, but must pay tax on dividends paid by the corporation. However, shareholders of S Corporations and mutual funds are taxed currently on corporate income, and do not pay tax on dividends. Since it will be several months if not years that the company will make a real profit. It would be in the best interest of the company to file as an S corp. Thus allowing the company to be its own entity as well as establishing the company and protecting the interest of our product. With that being said we must meet with a corporate attorney and file all necessary documents and begin the process of becoming an S corporation. Gentle Clean is now on its way to becoming a competitor in the world of Green cleaning supplies. How to cite Seven External Factors That Could Influence Business And Marketing Efforts, Essays