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Financial Outsourcing Solutions


FOS Blog

06 Aug

Money Laundering – Then and Now

Money Laundering – Then and Now

The concept of money laundering is nothing new and goes back to ancient times.  Money laundering is first seen with individuals hiding wealth from the state to avoid taxation or confiscation or a combination of both.  In China, merchants around 2000 BC would hide their wealth from rulers who would simply take it off them and banish them.  In addition to hiding it, they would move it and invest it in businesses in remote provinces or even outside China.  Fast forward thousands of years later, money laundering has advanced to a global level with varying methods that are extremely complex and sophisticated, such as investing in mobile commodities and the use of virtual currencies.  The whole idea is flying under the radar to make it impossible for authorities to trace the dirty money while it’s cleaned.  There are lots of money laundering techniques that authorities know about and probably countless others that have yet to be uncovered.

As for financial institutions, there are four basic strategies for strong anti-money laundering deterrence: know your customer; keeping monitoring processes up to date; investigation and reporting; and updating policies.  Implementing these strategies may be difficult, however, the level of scrutiny by Regulators demands attention to anti-money laundering prevention and deterrence.  It’s better to look ahead and prepare, than to look back and regret.  Are your anti-money laundering procedures adequate enough to stop the next level crook?