Money laundering

This chapter discusses available knowledge about money laundering and discusses selected definitions of money laundering offences, and available evidence on the size and scope of the problem. Particular emphasis is placed upon evidence concerning the underlying or predicate offending and laundering methods. 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 expanded the focus 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 responses that have been developed (see Hicks, 2010 for example) are key drivers behind what we know about the money laundering problem. Responses that generate the bulk of our knowledge in this area may be divided into two generic and interactive categories: prevention and enforcement (Levi & Reuter, 2006). Prevention activities focus on knowing 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 predicate offences that generate the proceeds of crime, investigation, prosecution, punishment, and criminal and civil forfeiture of the proceeds of crime.