Money Laundering

 Prepared by : Syahril Siregar

The illegal business which made the money laundering often occurs in whole world, for examples : Narcotic business, criminal, corruption etc. The money laundering sometimes be legal for someone countries because the regulations not set yet, or still new experience in this country, and at worst another already know but cover up with make regulations that legalize it.

Traditionally the job of fighting crime has focused on solving crimes. However, since the 1990s, crime fighters have also sought to deter criminals by paying more attention to the confiscation of proceeds of crime. And more recently, with the introduction of unusual or suspicious transaction reporting by the regulated sector, often the flow of money or goods is investigated even before a criminal offense has been detected.

Why criminals need to launder money

A person who commits a crime will initially try to prevent their actions from being noticed by the tax department, police and/or law enforcement authorities. If the person is arrested or taxed on the proceeds of crime, they will try to avoid having the criminal proceeds traced back to their origin and avoid their confiscation.

When criminals want to spend the proceeds of their crime, they face a dilemma: how to spend or invest large sums of money without evidence of a legitimate source of income that could draw the attention of tax examiners or auditors. Alternatively, criminals’ ability to expend cash on the purchase and use of high value goods or investments may bring them to the attention of law enforcement authorities. The tax department can start a tax audit and issue a tax reassessment while law enforcement authorities can initiate a criminal investigation into the origin of the money.

In order to be able to spend money openly, criminals will seek to ensure that there is no direct link between the proceeds of their crime and the actual illegal activities. They may also seek to construct a plausible explanation for an apparent legal origin of the money that they possess. In this way, criminals seek to “launder” their proceeds of crime before spending or investing it in the legal economy.1

Why have to know ML ?

Actually if money laundering circulate in people society its make all business not work well, and make a new criminal, illegal & criminal business will make illegal and criminal business too. That's why all people society have to know what is the money laundering, particularly for government employee and legislative assembly. Its comprehension have to tell to students for early morning system.

What is Money Laundering ? 

Money laundering is the process of concealing the source of obtained money, as the processing of criminal proceeds to disguise their illegal origin in order to legitimise the ill-gotten gains of crime.

Money laundering source of fund it was from illegal & criminal activities for examples :
1. Fraud
2. Theft
3. Narcotic
4. Embbezzelement
5. Briberry
6. Corruption
5. Tax Crimes

Money laundering often occurs in three steps: first, cash is introduced into the financial system by some means ("placement"), the second involves carrying out complex financial transactions in order to camouflage the illegal source ("layering"), and the final step entails acquiring wealth generated from the transactions of the illicit funds ("integration"). Some of these steps may be omitted, depending on the circumstances; for example, non-cash proceeds that are already in the financial system would have no need for placement.

Material book :

Money Laundering Awareness
Handbook for Tax Examiners
and Tax Auditors