What is Money Laundering?

What is Money Laundering?

 

Money Laundering is understood to mean the process of turning money raised through criminal activity into ‘clean’ money. But the growing sophistication and technologies involved in financial transactions and evolving understanding of how laundered money can be used by criminals, has led to a broadening of what is now considered to be Money Laundering.

The United Nations 2000 Convention Against Transnational Organized Crime, also known as the “Palermo Convention,” defines money laundering as:
  • The conversion or transfer of property, knowing it is derived from a criminal offense, for the purpose of concealing or disguising its illicit origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of his actions.
  • The concealment or disguising of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property knowing that it is derived from a criminal offense.
  • The acquisition, possession or use of property, knowing at the time of its receipt that it was derived from a criminal offense or from participation in a crime.

 

Quite simply money laundering occurs every time any transaction takes places or any relationship is formed that involves any form of property that has come from any crime.

 

It is important to note that money laundering is not only about cash transactions. Money laundering can be achieved through virtually any medium, financial institution or business.

 
The broader definition of Money Laundering includes:
  • handling the proceeds of crimes such as theft, fraud and tax evasion;
  • handling stolen goods;
  • being directly involved with any criminal or terrorist property;
  • assisting in the laundering of any criminal or terrorist property;
  • criminals investing the proceeds of their crimes in any legitimate financial product or activity.