4 - The obsession with defining money laundering

Summary

Those involved in the fight against money laundering, or the financing of terrorism rely on the most current information on typologies.

IMF

Imagine just for a minute you have the pleasure of being a money launderer. You appreciate AML/CFT compliance professionals are supposedly watching your activities, you know law enforcement officers have an interest in asset recovery, yet you need to launder money for a cartel whose leaders are not going to take too kindly if you fail.

What do you do? Do you go with a well-publicised method of money laundering that you know has red flags, is considered risky and is likely to be detected, or do you choose the best bits from lots of methods to limit your risk of raising suspicion? If you chose choosing the best bits, you are probably like many other professional money launderers – so well done, because life just became a whole lot easier. But if you chose going with a wellpublicised method, you are equally as good, perhaps just a little more discreet. In this chapter we shall explain why.

The principal premise

The principal premise behind money laundering is to make the illicit value usable. Dirty money, which is money gained through crime can never be made clean – despite the word laundering implying that when it comes out of the three-stage process of placement, layering and integration it is then somehow clean. Equally there is no need to hide the illicit value, because if it is hidden, how can it then be spent?

It is the change of appearance where money laundering is most effective. Although there may be many definitions of money laundering, the principles are always the same: illicit money should appear clean so that it can be enjoyed without fear of raising suspicion. The less suspicion, the less chance of having to hand it over to law enforcement and thus having wasted time committing the predicate offence which provided it.

Various definitions of money laundering exist, a handful of which were captured in Chapter 1. Many definitions also derive from the EU Directives that show money laundering as: ‘[T] he conversion or transfer; concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership; acquisition, possession, or use; of property, knowing that such property is derived from criminal activity.’