Essays on International Money Laundering Assignment

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The paper 'International Money Laundering' is a great example of a Macro and Microeconomics Assignment. Money laundering is one of the most common forms of financial crimes today. There has been a significant increase in money laundering activities in the recent past. Steens (2000, p. 3) defines money laundering refers to the concealment of the source of assets obtained through criminal activity to make the assets appear as if they are acquired through legitimate means. With the globalization of the financial markets, hundreds of billions of dollars are derived criminally derived through money laundering every year.

Big multinational companies, in particular, are increasingly engaging in money laundering activities by abusing the accepted accounting principles to conceal illegal business activities (Madinger 2011, p. 13). However, engaging money laundering can have serious ramifications on a company that operates legally. Therefore, as money laundering activities increase, managers should be vigilant and initiate measures to prevent their companies from engaging in money laundering activities. The aim of this paper is to examine the impact of money laundering activities on the operations of a company. It will also describe the measures that managers can take to prevent their companies from engaging in money laundering activities. Concept of Money Laundering Money laundering has become a global phenomenon.

Today, billions of dollars change hands through money laundering activities. Despite the popularity of money laundering, the term is still less understood considering that it manifests in different forms. However, money laundering is a term used to refer to the legitimization of assets or money obtained through illegal means. In money laundering, the parties involved in the activity use different techniques to conceal the source of the assets or funds obtained through criminal activity to make it look as if the assets or funds are obtained through legal means (Parkman 2013, p.

73). Every country has its own definition of money laundering and the crimes that are considered to constitute money laundering. In the United States, it is estimated that more than $300 billion is laundered every year. Money laundering activities do not just happen at once. Instead, there are a series of steps/phases that are involved in any money laundering activity. The first step/phase is the placement phase that involves the introduction of the assets or money obtained through illegal means into the financial system (D'Agostino 2002, p.

14). Once the money has been introduced into the financial system, the parties involved in the money laundering deal conceal the sources of the money being laundered to make the assets look legitimate at the layering phase. Cover up is done by employing a variety of techniques, such as engaging the money laundered to multiple transactions. One the source has been concealed; the last stage is integration, where the money or assets are returned to the organization of the financial world to make the source look legitimate. Techniques used to Avoid Detection Because money laundering is a criminal activity, organizations that engage in money laundering deals take every step possible to avoid detection.

This is because when found, they risk facing prosecution and exposing the company to the risk of reputation damage and other related consequences. The first and most widely used detection avoidance that criminals use is the transfer of illegally-acquired assets from one bank to another and from one account to another.

This is repeatedly done to make it complex and difficult for an audit trail to capture, thereby concealing the real source of the assets. Secondly, criminals sometimes opt to divide a large sum of money into smaller bank deposits (Stessens 2000, p. 33). The illegally acquired money is then deposited into different bank accounts to conceal making it difficult for investigators to identify the real source. Additionally, criminals may avoid detection by using the illegally acquired money to buy money orders in small amounts or breaking the huge amount into small quantities and using it to buy cashier checks (Parkman 2013, p.

78). These techniques are widely used by criminals to make it difficult for investigators to detect a money-laundering deal in an organization. In fact, it is believed that although many money-laundering deals are going on in various companies across the globe, reporting the actual figure has never been easy because of the avoidance techniques that most companies use to deceive investigators that a deal is legitimate.


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