Money Laundering can be defined as committing or attempting any act to conceal or disguise money’s true origin and make it appear as if it is a legitimate source.
Stages of Money Laundering
Introduction of illegally sourced funds into the financial system
Concealing the true source of funds by performing complex transactions so that it cannot be traced
Re-integrating the laundered money into the legal system, so that it appears as legal assets
Acts Linked to Money Laundering
Transferring money, converting it, or carrying out any operation using it, -Knowing that it is a result of criminal activity or an illegal source
Acquiring, possessing, or using funds that the person knows are proceeds of crime or from an illegal source
Concealing or disguising the true nature, source, mobility, ownership, place, disposition, or manner of disposition, Or rights with respect to funds that the person knows are proceeds of crime
Participation in by means of an agreement or aiding, abetting, or providing counselling, advice, facilitation or attempt to commit any acts deemed as money laundering
FATF and its role in monitoring Money Laundering
The Financial Action Task Force (on Money Laundering) is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. In 2001, its mandate was expanded to include terrorism financing.
The objectives of FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. FATF monitors progress in implementing its recommendations through “peer reviews” of member countries.