Avoidance and checking of cash laundering, along with the financing associated with criminal as well as terrorist actions, is a substantial factor which influences the actual efficient as well as effective operation from the global economic climate. Moreover, any reference to these activities includes a negative influence about the reputation associated with institutions which could trigger a possible undermine from the banking sector and also the local economic climate. As an effect, governments ought to take the required measures to be able to monitor and stop money washing practices.
According in order to Article 6 associated with UN Conference Against Transnational Structured Crime (Palermo Conference) cash laundering can be explained as:
- “The transformation or move of home, knowing which such property may be the proceeds associated with crime, with regards to concealing or even disguising the actual illicit origin from the property or even of helping anyone who is active in the commission from the predicate offence in order to evade the actual legal outcomes of his / her action;
- The concealment or even disguise from the true character, source, area, disposition, movement or even ownership associated with or rights regarding property, understanding that such property may be the proceeds associated with crime;
- The purchase, possession or utilization of property, understanding, at time of invoice, that this kind of property may be the proceeds associated with crime;
- Participation within, association along with or conspiracy theory to dedicate, attempts in order to commit as well as aiding, abetting, facilitating as well as counselling the actual commission of the offences established prior to this post. “
Within Cyprus, the Avoidance and Reductions of Cash Laundering as well as Terrorist Funding Laws associated with 2007-2010 (188 (We)/2007) as well as Directive DI144-2007-08 associated with 2012 for preventing Money Washing and Terrorist Funding, issued through the Cyprus Investments and Trade Commission (CySEC), retain the regulations for that combat associated with money washing and terrorist funding activities. The qualified authority may be the Unit with regard to Combating Cash Laundering (MOKAS).
The actual three phases of cash laundering tend to be:
- Placement: The cash enters to the financial program. Specifically, the cash derived through criminal activities is positioned in the bank or every other enterprise that may accept money.
- Layering: This can be a complicated action and entails many transactions to ensure that to allow it to be hard for that authorities to recognize an association between your placed funds using the ultimate beneficiary from the money. This phase may include purchasing as well as selling foreign currency, shares or even bonds, purchasing collective expense schemes or even insurance-based expense products, or moving the cash from 1 country to a different.
- Integration: This is actually the final phase. The cash integrates to the legal economic climate. Hence, it may be used for just about any purpose.
These days, globalisation as well as ongoing improvement of Web solutions help the move of funds in one country to a different. As an effect, financial businesses must develop their very own written anti-money washing processes as well as programmes based on the necessary regulations to be able to prevent as well as detect cash laundering methods.
Regarding the actual operation associated with financial companies, national as well as international anti-money washing legislations include procedures which involve:
- Customer id. That would be to say, understand your customer and his/her company activities. Consequently, the monetary companies should establish the required Know-Your-Client (KYC) methods.
- Record-keeping. Client as well as transaction data should be kept with regard to five many years.
- Transaction checking. Particularly, transactions which are regarded as vulnerable in order to money washing and terrorist funding, complex, extremely large dealings, and dealings with unusual patterns.