“Money-laundering” is the result of a property and capital transaction that originates in crime, which is camouflaged and implanted into the financial economic system, thus becoming “legal” prima facie. A person wishing to launder money does so in order to conceal the source of the property or the identity of its owner, with the prima facie purpose of disconnecting the money from the forbidden activity from which it was obtained.
The technological advances of the financial systems in the world, and the facilitation of transferring money in international markets have also facilitated matters for those who attempt money-laundering. Therefore, money that was obtained by felonious transactions such as drug trafficking, illegal arms dealing, human slavery, gambling, management offenses etc. could make its way into bank accounts dispersed globally. The method is almost always identical and executed in two stages:
1. Depositing the money (usually in cash) in a bank account while camouflaging the source and identity of the owner.
2. Later an “innocent” financial transaction is usually conducted: exchanging currency, acquiring financial assets, transferring to other banks or to other countries.
Once the source of the money has been blurred, the money appears to be legitimate. It is concealed in the economic system, does not arouse suspicion and it is well—suited for additional use.
The crime-fighting authorities in many countries e.g.: The United States and Canada, Britain, European countries, Australia, Japan and additional countries have reached the consensus that blocking the possibility for felons to “launder” and ”purify” their money is an important means in the struggle against terror organizations, drug crimes and the various types of organized crime. In order to promote the success of this issue, many countries throughout the world have agreed that international standards and legislation that would enable cooperation between governments, law enforcement authorities and the financial institutions are essential.
The first International convention for cooperation against money laundering (FATF) was signed at the end of the 1980s. As a result of the convention, an international task force was established in Paris for coordinating cooperation in this matter. Recently Israel became a full partner in this global struggle against terror and money laundering.
There are many ways to launder money and its prevention is complicated. In view of the dangers involved in money-laundering such as upsetting the stability of political, economic and social systems in democratic countries and even endangering human life, it is of the utmost importance that the struggle against this phenomenon should continue with all the means at our disposal.
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