Money laundering the act of concealing the origins of money is mainly obtained through illegal means. It is done by directing the illegally obtained money through different channels and bank accounts including domestic and foreign accounts. Money laundering technique in the 21st century are large in number and let us discuss a few of them.
MONEY LAUNDERING involves three steps :
1. PLACEMENT: placing illegal money into the legitimate financial system
2. LAYERING: concealing the source of the money through multiple transactions and bookkeeping tricks
3. INTEGRATION: obtaining back the money and using it for their intended purpose
1. SHELL COMPANIES
A lot many companies are registered in the domestic jurisdiction but they have not produced or services. They are stagnant in development but they are shown to be grow8 through investments from multiple channels. These investments are nothing but illegally obtained black money which is poured in on one’s side and drawn out as profits and revenues on the other side just for the purpose of accountability of the money. This is done by involving many investors and directing the black money through them but ultimately delivered to the originator.
2. FOREIGN COMPANIES AND INVESTMENT IN RESORTS
TO escape tax jurisdiction of domestic companies black money is invested in foreign companies in names of different investors, the profits are also obtained and the investments are drawn when they need it back. This is another example of money laundering. They are also invested in the dark on the development of resorts and tourist spots.
3. INVESTMENT INVALUABLE MOVABLE ASSETS
Gems and jewelry are the targets buys for launderers. They can be easily shifted out of the home jurisdiction over a period of time or smuggled out through their own business activities on overseas bypassing regulatory checks
4. ELECTRONIC TRANSACTIONS :
Money is invested in peer to peer transactions and also as a virtual currency in gaming 6and then again converted back to real. Today the deve6of cryptocurrency has increased the opaqueness to detect the transaction and money laundering for drug trafficking and terrorism funding has risen to new heights.
To prevents the Above Money laundering techniques it requires multiple level checks and balan6and regulations along with initi8to develop transparency. International collaboration is the key and also agencies should support by providing information about the possible threats and also help fight the laundering TECHNIQUES. A strict regulatory system for cryptocurrencies and digital transactions should be in place. Stricter norms for money laundering in domestic jurisdiction are advised to time and again.