Money laundering

This chapter offers a selective review of international standards and definitions, the global scope and traditional stages of money laundering, and available evidence surrounding the effectiveness of the regimes and the respective implementation in the United States of America (USA) and United Kingdom (UK).

The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention, 1988) signaled the beginning of the international drive, and parallel national responses, to target money laundering. Early efforts focused on laundering linked to drugs and designated offences. From the turn of the century, international conventions and much national legislation has tended to include laundering related to all serious crimes (punishable by four or more years imprisonment) and virtually any interaction with the proceeds of crime.

The United Nations Convention against Transnational Organized Crime (Palermo Convention, 2000) established the generic and interactive categories of prevention and enforcement for international and parallel domestic responses to money laundering. Prevention activities focus on know-your-customer policies, the reporting of suspicious and other financial transactions, and the regulation and supervision of financial institutions with various sanctions for noncompliance. Enforcement activities focus on the underlying offences that generate the proceeds of crime and the associated investigation, prosecution, and punishment as well as criminal and civil asset recovery.