Money Laundering Trends in the European Union

MONEY LAUNDERING

Answer the following questions.

Have you heard anything about dirty money? What is it?

Do you think that money laundering is in any way related to foreign trade transactions?

Do only the European countries face the money laundering problem?

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Money Laundering Trends in the European Union

The money launderer changes the illicit proceeds from one form to another, often in rapid succession. The trend is towards acqiuring tangible assets (such as cars, boats, aircraft, luxury items, real estate, and precious metals) with the bulk cash originating directly from criminal activity. Often, but not necessarily linked with off-shore centres, the mechanism of shell or front companies has been detected. These are entities that generally exist only on paper. These legal entities are usually conducted specifically in order to carry out a wide range of criminal businesses such as financial fraud, especially in the United Kingdom, and fraud against the European Union, especially in the Netherlands, Belgium and Italy. They do not participate in actual commerce and are run by straw men, as often found in Italy. Their purpose is qiute exclusively criminal and they often face a “law enforcement risk” from investitions about the real nature of their existence. This is the reason why they are closed down almost as soon as they are formed and often the accountancy booksare physically eliminated in order to conceal any trace that could help future or further investigations.

Money launderers are ever more oriented towards the use of non-bank financial institutions which are still not completely or properly regulated in some European Union member states. As they do not always come under the same obligation as the financial sector, because they are not allowed to undertake banking activities to earn unterest, they are used especially at the placement stage for entering the cash into the financial market. There is evidence, especially in the Netherlands, Belgium and Italy, of criminal groups moving from major commercial banks to those called second line banks and often operating accounts in the name of offshore companies. These include a wide variety of bureaux de change, cheque cashing services, insurers, brokers, importers, exporters and other trading companies, gold and precious metal dealers, express delivery services and other money movers. Casinos or gambling houses are used at the placement stage. Enquires into stockbroking markets in Austria, Finland and the United Kingdom have, however, revealed that much illicitly gained money is laundered in this circuit. A special mention has to be made of insurance companies which are increasingly popular laundering mechanisms, as in Germany, especially in the premium insurance bond sector.

Russian law allows for conducting cooperative investigations with other countries for money laundering, to include asset freezing, seizure, and forfeiture. Current Russian laws used to combat money laundering focus on the underlying crime that generates illegal proceeds. This international cooperation can be initiated on two levels: at the diplometic level, which requires the legal procedure using letters rogatory described below; and at the operational level, whereby the information exchanged is used for investigatory purposes only. Until more formalized bilateral agreements are signed, the trend in Russia is to encourage more contracts at the operational level between comparable national agencies, not only for the exchange of information but also for conducting joint investigations.

Russian law enforcement authorities may act on a legal assistance request in a money laundering case when the state asking for assistance is seeking records, searches, seizure of evidence, freezing of funds held in bank accounts, and the seizure and forfeiture of assets. Formal legal request, in the form of letters rogatory, must first be sent through the Ministry of Foriegn Affaires, which passes the request on to the appropriate law enforcement agencies. The law enforcement agency evaluates the competency of the request. Then, based on the approval of the General Prosecutor’s Office, a case is opened, and the operational phase or the investigation may begin. As a result of the investigation, any evidentiary information conveyed to the requester must be in conformance with the international and bilateral agreements in effect between both countries. Problems occur when agreements do not exist with other countries, especially in the area of forfeiture and seizure of assets. Russia has signed no agreements with other countries on recognition of foreign judgements.

Дата добавления: 2015-11-14