Your Practice. Popular Courses. Part Of. Types of Financial Crime and Fraud. Financial Crime and Fraud Examples. Control and Regulation. What is Money Laundering? Key Takeaways Money laundering is the illegal process of making "dirty" money appear legitimate instead of ill-gotten. Criminals use a wide variety of money laundering techniques to make illegally obtained funds appear clean.
Online banking and cryptocurrencies have made it easier for criminals to transfer and withdraw money without detection. The prevention of money laundering has become an international effort and now includes terrorist funding among its targets. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
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Investopedia does not include all offers available in the marketplace. A certified anti-money laundering specialist CAMS works to spot attempts to obscure the origins of the proceeds of crime. Combating the Financing of Terrorism CFT Combating the Financing of Terrorism is a set of policies aimed to deter and prevent funding of activities intended to achieve religious or ideological goals through violence.
Smurf A smurf is a colloquial term for a money launderer who seeks to evade scrutiny from government agencies by breaking up large transactions. Partner Links. Related Articles. Investopedia is part of the Dotdash publishing family. Money laundering is the processing of criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source.
Through the Global Programme, UNODC encourages States to develop policies to counter money-laundering and the financing of terrorism, monitors and analyses related problems and responses, raises public awareness about money-laundering and the financing of terrorism, and acts as a coordinator of initiatives carried out jointly by the United Nations and other international organizations.
Due to the clandestine nature of money-laundering, it is however difficult to estimate the total amount of money that goes through the laundering cycle.
Terrorists and terrorist organizations usually need to rely on money to sustain themselves and to carry out terrorist acts. Terrorist financing encompasses the means and methods used by terrorist organizations to finance activities that pose a threat to national and international security.
Money provides terrorist organisations with the capacity to carry out terrorist activities, which can be derived from a wide variety of sources.
Money can come from both legitimate sources i. Drug trade, weapon smuggling, kidnapping for ransom. While a money laundering scheme is usually circular and the money eventually ends up with the person who generated it, a terrorist financing process is typically linear, and the money generated is used to propagate terrorist groups and activities.
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