“Money laundering”, is a term that is often used in association with illegal activities, especially in terms of terrorist actions. Many news reports in televisions and newspapers have used the term money laundering but still, the general public do not have enough knowledge of what money laundering is and the its corresponding effects to the society. In line with this, there is also a need to further study the processes that are involved in money laundering in order to properly address the aforementioned illegal action.
Being the case, there is a need to define the term money laundering and its relevance to important social issues. Moreover, due attention should also be given in the ways or means by which money laundering can be efficiently resolve. In order to understand the definition of money laundering it is necessary to also trace its historical origin. The definition of money laundering has developed through time, especially with the various changes that are happening in the society.
Traditionally, money laundering has been regarded as “a process by which criminals attempt to hide the origins and ownership of the proceeds of their criminal activities” (Hopton, 2009, p. 1). The aforementioned definition presents an objective that will allow criminals to retain control of the proceeds by means of covering their income and wealth. As a result, many people have the notion that money laundering is about making dirty money into clean money, protecting drug money, and hiding criminal money (Hopton, 2009). The traditional description of money laundering is able to describe certain aspects of the term.
However, the actual term of money laundering is actually regarded as a misnomer. The term money laundering does not take into account the changes in the modern world wherein laundering operations do not only involved money. Due to this, a modern definition of money laundering was established in order to capture the changes that are happening in the modern society. In the modern definition, money laundering “occurs every time any transaction takes place or relationship is formed which involves any form of property or benefit, whether it is tangible or intangible, which is derived from criminal activity” (Hopton, p. 2).
In relation to this, it is also important to point out that criminal proceeds do not have to be moved in order to launder them (Hopton, 2009). The modern definition of money laundering highlights important points that describe money laundering. Contrary to the common belief that laundering only involves illegal money, there are also cases wherein the money is legal but the failure of an individual to properly declare it as income on a tax return is also recognized as laundering.
Furthermore, the traditional view of money laundering involves the purpose that criminals result to laundering in order to identification, punishment, and confiscation of their ill-gotten wealth. The traditional perspective is not incorrect but it is also essential to highlight that the primary aim of criminals is not the conversion of property but rather the need to hide the fact that they actually own the property.
The purpose of the criminals is to remove the link between them and the property so that it cannot be related to the criminal offence that they wish to avoid. As a result, money laundering is more about disguising the real owner of the property rather than converting or washing a property that is deemed as illegal (Gilmore, 2004). Since the 1970s, the United States government has emphasized three important steps in order to fight crime, specifically money laundering.
First, the government, especially with the help of the justice system should prosecute the underlying crime. Second, necessary steps should be made in order to follow the money trail through money laundering investigations. Third, the government will enforce the corresponding measures in order to forfeit the proceeds and instrumentalities of the crime. The United States first established the money laundering laws in 1986 wherein it was designed to solve money laundering that only happen in the domestic scene (U. S.
Department of State, 2001). However, the problem of money laundering has become more of a global problem, especially with the involvement of international financial transactions, smuggling of currency across other countries, and laundering of illegal proceeds in one country to another territory. Being the case, the efforts and measures to combat money laundering should not only be confined as a national concern of countries but rather every state should take an active role in international efforts to address money laundering (Savona, 2000).
In the past fifteen years, international efforts have been made in order to address money laundering. The main international agreements regarding the issue of money laundering are the United Nations Vienna Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (Muller et al. , 2007). After the aforementioned international agreements, many multilateral organizations also follow from the example and enacted their own anti-money laundering initiatives.
Nevertheless, despite the presence of international agreements that promote and encourage international cooperation against money laundering, states still have many things to do, especially in playing a more active and bolder role regarding the issue. State signatories should obey the provisions of the international agreements that signed and at the same time efficiently implement the necessary measures to address money laundering in their country.
Moreover, states should also try to negotiate and convince non-signatories to take part in the efforts against money laundering and also make the necessary plan to solve problems that might occur if countries that are not signatories to anti-money laundering agreements become a hindrance in actually resolving the issue (Gilmore, 2004). Lastly, the general public should also do its part especially in understanding money laundering is and its corresponding effects. In doing so, people could be more vigilant in their decisions and actions that can actually help identify criminals who are guilty of money laundering. References
Gilmore, W. (2004). Dirty Money: The Evolution of international measures to counter money Laundering and the financing terrorism. Germany: Council of Europe Publishing. Hopton, D. (2009). Money Laundering: A Concise Guide for All Business. United States: Ashgate Publishing Company. Muller, W. H. , Kalin, C. H. , & Goldsmith, J. G. (2007). Anti-money laundering: International Law and Practice. New Jersey: John Wiley and Sons. Savona, E. U. (2000). Responding to Money Laundering: International Perspectives. New York: Routledge. U. S. Department of State. (2001). The Fight against Money Laundering. United States: Diane Publishing Co.