Money laundering has survived the years through questions of morality and lawfulness by adapting to rigorous restraints and finding new ways to manifest itself in different segmentation forms of trade. Historically, money laundering in its international form began in the 1960’s (Delston & Walls, 2009). While money laundering has been made popular throughout the years because of American Mafia scandals; a vast amount of terrorists, religious sectors, and other criminals have been actively money laundering.Most of the money being laundered today originates from insider trading, fraud, embezzlement, drug trafficking, illegal arms sales, prostitution, people trafficking, bribery, corruption, tax evasion or misuse of public and private funds.
Money laundering’s best definition is to process funds resulting in illegal or criminal activity (Canhoto, 2008). While throughout history a few insist that money laundering is not criminal, a strong majority have obviously ruled the latter because of the injustices done to people from the activities that transpire to earn the money being laundered.With the sole purpose for money laundering for avoiding paying taxes and hiding money obtained from criminal activity, the Financial Action Task Force (FAFT) was established in 1990 to “help countries combat money laundering and terrorist financing” giving special attention to “the role of financial institutions, and more recently, the physical movement across borders (Delston & Walls, 2009).This special attention has came about because of the shift in money laundering from the traditional ‘Swiss’ banks which were discreet in their banking practices, to “trade-based money laundering (TBML) to conceal and legitimize their funds, as this is a channel that remains relatively untouched by Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) efforts internationally” (Delston & Walls, 2009).
This problem hurts our economy by over inflating money markets which makes inflated stock and bond markets for investments.TBML has reestablished money laundering as a major ethical problem for the FAFT. TBML money laundering happens in a variety of ways. One common way of TBML is the misrepresentation of the price, quantity, or quality of goods sold.
This process can be simple or developed into a complex financial transaction that allows its owner to mask its actual location or amount. Some other ways of TBML that have higher stakes are narcotics trafficking, human trafficking, and terrorist financing. This can include the disguising of logistical support and the most feared support and movement being weapons of mass destruction.This process has been very lucrative for the people committing these acts and remains to be a viable source of income and prosperity for different segmented groups.
Obviously, having the ability to raise large amounts of cash swiftly can be very tempting to groups already committing other criminal activities. This reason can and has enticed many radical groups to weigh the options of raising capital by these means. I believe money laundering in any form is illegal, unethical and unmoral. I also believe it should be dealt with harshly.The reason I feel this way is we live in a capitalist society where an individual has plenty opportunity to establish a legitimate business. Money laundering is mainly committed to cover up for illegal forms of money established through illegal activities.
The lives that have been damaged throughout history because of these actions are countless not to mention the money that has been wrongfully removed from innocent people. An example of the damage that has happened to the innocent is when “Wayne Robertson (30) pleaded guilty to the manslaughter of 10-week-old Lila Robertson at Birmingham Crown Court in May 2009.In November 2006, he shook the youngster so hard she suffered a fatal brain injury. ” In addition, “eight months before Lila died, Robertson was part of a scam in which almost 8,000 was siphoned from the bank account of a flooring company in Redcar, Cleveland. ” (Baby killer admits role in cash scam, 2008).
Apparently, Mr. Robertson felt that he could not be caught in his actions of both cruel crimes. Another example is when “Four men and one woman were arrested on suspicion of a number of offences including arson with intent to endanger life and money laundering. (Police arrest five in arson and money laundering investigation, 2009).Because of the numerous articles like these, in my opinion money laundering is tied to other crimes of morality and causes excessive damages to other people and property. Also, knowing that there is a link between money laundering and these crimes increases my beliefs in the increased need to control the problem of money laundering.
One other view of interest is one of Douglas Husak the author of the book Overcriminalization: The Limits of The Criminal Law.As explained by Robert Young, Mr. Husak believes that “this excess of laws has contributed to an increase in the number of violations of criminal laws, which, in turn, has resulted in the meting out of too much criminal punishment (in particular, too much imprisonment). ” He goes further to explain “Furthermore, this over criminalization has caused serious injustices to become endemic within the criminal law system (because of problems in fairly enforcing the excessive numbers of law).
His beliefs are opposite of the general population.His overall view is that money laundering is not a major crime and that we have imposed a form of double jeopardy for those violating these particular crimes. He also believes that we should lessen the consequences because he believes they are not linked to other crimes. Many illegal activities have been encouraged with money laundering.
It is much easier on our government to find perpetrators if money laundering was absolved. By money laundering being absolved, our government would pick up on traffickers easier because they would have no way of accounting for their large and unexplainable income.With our government having specialty government services like the Internal Revenue Service, drug traffickers would be detected faster because of unexplained purchases that are higher than their recorded yearly income. Once that occurs the government would be able to isolate large expenditures that traffickers usually use their funds for. Some examples would be lavish vehicles, extravagant personal residences and large investments.
To combat money laundering, FAFT issued the 40 Recommendations in 1990 and revised them in 1996.Following these original Recommendations, 8 Special Recommendation were established to close some of the loop holes. These Recommendations established a “soft law” in the international community on money laundering practices. Shortly thereafter, the 9th Recommendation was established.
In addition, on September 11, 2001, FAFT established a second set of standards relating to CFT in addition to the standards on AML. This “soft law” as pertaining to the Recommendations, relies on information gathering, mutual monitoring, and “name and shame” sanctions to establish its goals (Delston & Walls, 2009).The “name and shame” was a list started in 2000 providing a series of reports identifying countries that have failed to meet the 40 Recommendations and were non-cooperative. This list originally contained fifteen jurisdictions. An excellent example of the “name and shame” list is when the FAFT posted the information in regards to the Seychelles’ Economic Development Act. This was very important because in 1995, the Seychelles, a small archipelago in the Indian Ocean, passed its Economic Development Act (EDA).
This act’s function was to attract investment in their jurisdiction by providing any person investing over 10 million on applicable projects to receive immunity for any violent or drug-related crimes while in the Seychelles (Delston & Walls, 2009). This EDA lasted from 1995 to July of 2000 when the Seychelles repealed it. This process although being effective was also slow. A period of 5 years transpired with nothing being done but to embarrass the country seems very short coming.The information not available is the lives that were damaged and have received or will never receive justice for.
This must have been a very distressing time for the people of Seychelles but a very prospering time for the wealthy that chose to exercise their immunity. The future of the FAFT is still a major concern for the international community because of the increasing amount of international trade and the jurisdictions attempting to hide or accumulate money. “With twenty million containers entering into the U. S. n 2005, a number expected to triple by 2020, and with less than five percent of those containers being inspected, the international trade system remains an attractive avenue for those wishing to launder the proceeds of a crime or engage in the financing of terrorism.
” (Delston & Walls, 2009). If we continue to allow 95% of all international goods to become unchecked we will have let in 18 million cartons uninspected which is a giant open door for those interested in Trade Based Money Laundering. This number is not only shocking but staggering.The opportunity that is present for those who are involved with these criminal actions will continue to prevail knowing that the chances of getting caught are very slim compared to the 95% chance of not getting caught.
In conclusion, if we are to continue to fight the major problems that lay in our society, we need to impose harder sanctions and new legislation that will keep up with the new and changing money laundering tactics. With the 40 Recommendations, 9 Special Recommendations, Financial Action Task Force (FAFT), Anti-Money Laundering (AML) and the Combating the Financing of Terrorism (CFT) money laundering still exists today.It has actually flourished and has expanded to prey on third world countries like the Seychelles. To eradicate money laundering is not foreseeable at this time but our society still should take on the responsibility of meeting the new changing needs of defending against money laundering.
If we do not stand together with our fellow nations, those that chose to perform these illegal acts will continue to perform these actions which will encourage and fund other crimes of morality and ethics.
