Money Laundering: Role of Gatekeepers

Running Head: Money Laundering
MONEY LAUNDERING: Role of Gatekeepers
Critical Evaluation of FAFT Report 2018
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Money Laundering
Executive Summary
This report contains the critical evaluation of the role of the gatekeepers helping and assisting
in money laundering which are given in FATF Report 2018. It focuses primarily on
professional money launderers (PMLs) who works for empowering culprits to sidestep
against money laundering. The report portrays the capacities and qualities that characterize a
professional money launderer, in particularly people, associations and systems which are
engaged with outsider washing for an expense or commission. While PMLs may act in a
professional limit (for example legal counselor, auditor) and help genuine customers, this
report recognize those persons who are criminal customers either on a fulltime or low
maintenance premise. There are both the aspects of legal professionals in money laundering
in the report: the professional duty of the lawyer towards his client and giving advice
regarding the safe transfer of money.
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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
What is Money Laundering?......................................................................................................4
How much money is laundered per year?..............................................................................5
How is money laundered?......................................................................................................6
Where does money laundering occur?...................................................................................7
Who are gatekeepers?............................................................................................................8
Role of Gatekeepers in Assisting Money Laundering...........................................................8
Need of Gatekeepers by Criminals........................................................................................9
FATF Report - “Professional Money Laundering” July 2018.................................................11
Who is a Professional Money Launderer (PML)?...............................................................11
What Services Do PMLs Provide?.......................................................................................12
Complicit, if not Criminal, Professional Service Providers.................................................13
Conclusion................................................................................................................................20
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Bibliography.............................................................................................................................22
Introduction
The criminal activities, which laundered and hid in illegal tax evasion plans to threaten
popularity-based foundations, moderate financial improvement and add to legislative
unsteadiness1. The advancement of innovations, specifically inside monetary establishments,
offers more extensive open door for crooks to launder their cash got from illicit activities.
Contemporary financial institutions can move sick gotten gains by exchanging them to
different locales. In this manner, the extension of new worldwide markets, exchange and
fund, just as media communications and travel, not just have cultivated monetary
development and enabled numerous to flourish, yet have additionally exhibited culprits and
corrupt opportunist with the capacity to misuse globalization's increases to direct more
prominent wrongdoings2. This condition permits tax evasion as the “wheel greases” for these
illicit exercises, where tax evasion darkens the source of cash got from wrongdoings to wind
up untraceable, so the hoodlums can continue completing the unlawful business and getting a
charge out of the benefit.
To tackle the illegal activities which are done through gatekeepers, the International Anti-
Money Laundering Community has evolved various steps whose prime target is to eradicate
1 UNODC, Thematic Programme: Action against Corruption and Economic Crime, (Vienna: UNODC, 2011)
2 UNODC, Globalisation of Crime Vienna, (UNODC, 2010)
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Money Laundering
activities related to illegal tax evasion and gatekeepers3. Financial Action Task Force (FATF)
is one such measure that can tackle the problem of money laundering. There are other
measures available like United Nations Conventions against Corruption (UNCAC), it is
ratified many countries around the globe and it is treated as a precious bar and regulation for
evolution and clarification of rules and regulations and instruments4. Globally present anti-
money laundering steps are continuously improving according to changes, but some of the
recent cases elaborate that offenders can still successfully conceal and make sure that their
illegal money are safe. Mostly money laundering have its effect on national level but
sometimes it have its impact outside the territory as well. Its effects spread throughout the
world, violating various jurisdictions because there is no country which can stop it from
spreading5. There is need for development of more reliable system which can erase money
laundering globally and eventually stop illegal money flows.
This report on money laundering will be evaluating the role of gatekeepers. This report
mostly puts light on gatekeepers’ role in protecting the money arising out through illegal
activities and money laundering and to trace the flow of illegal money. This report will be
discussing the approach to prevent gatekeepers in helping the schemes related to money
laundering.
3 Robert Leventhal, Money Laundering and Terrorist Financing: A Global Threat, (U.S. Department of
State,2008)< https://www.state.gov/j/inl/rls/nrcrpt/2003/vol2/html/29843.htm> accessed on 10 April 2019
4 American Society of International Law, “Adoption of UN Convention against Corruption, The American
Journal of International Law,” (American Society of International Law), 2004<
http://www.jstor.org/stable/3139275.> accessed on 10 April 2019
5 Patrick Glynn, Stephen J. Kobrin, and Moises Naim, (Institute for International Economic, 1997) < http://
www.iie.com/publications/chapters_preview/12/ 1iie2334.pdf> accessed on 10 April 2019
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What is Money Laundering?
Money Laundering is the system where huge amount of money can be generated by criminal
activity. The money that comes from this process is dirty and laundering makes it look clean.
Illegal arms deals, pirating, and the demonstrations of crimes can create tremendous amount
of cash. Misappropriation, insider exchanging, payoff and fraudulent plans can likewise
convey broad advantages and create incentive to “legitimize” the illegal gains via illegal tax
avoidance6.
Exactly when a crime increases significantly, a person or gathering must make sense the way
to control the gains without attracting thought in regards to the essential development or the
general population included. Offenders generally do this through veiling the origin, altering
the structure, or removing the resources for a spot where it is difficult to find. As a result of
rising worries over unlawful tax avoidance, the Financial Action Task Force (FATF) was set
up in Paris in 1989 by the G-7 Summit7. Basic undertaking of the FATF was to develop
Recommendations, which are 40 to be exact, asks government of the nations to enforce these
recommendations to curb illegal tax evasion.
How much money is laundered per year?
Money laundering or illegal tax evasion is an unlawful development done by wrongdoers
who are from outside of the standard extent of financial and cash related estimations. Nearby
6 Introduction to money laundering, (UNODC, 2019)<
https://www.unodc.org/unodc/en/money-laundering/introduction.html?ref=menuside> accessed on 10 April
2019
7 History of the FATF, (FATF, 2019)< http://www.fatf-gafi.org/about/historyofthefatf/> accessed on 10 April
2019
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