41. Fighting International Money Laundering and Offshore Banking Markets. Борьба с международным отмыванием денег и оффшорные банковские рынки.

Money laundering is the conversion or transfer of property derived from criminal activity to conceal or disguise its illicit origin; the concealment or disguise of the true nature, source, location, disposition, movement or ownership of property known to have been derived from criminal activity; the acquisition, possession or use of property known to have been derived from criminal activity; the participation, or assistance, in the commission of any of the activities above. Methods of ML: 1) Structuring: is a method of placement by which cash is broken into smaller deposits of money, used to defeat suspicion of money laundering and to avoid anti-money laundering reporting requirements. 2) Bulk cash smuggling: Physically smuggling cash to another jurisdiction, where it will be deposited in a financial institution, such as an offshore bank, with greater bank secrecy or less rigorous money laundering enforcement. 3) Trade-based laundering: Under- or over-valuing invoices in order to disguise the movement of money. 4) Bank capture: Money launderers or criminals buy a controlling interest in a bank, preferably in a jurisdiction with weak money laundering controls, and then move money through the bank without scrutiny.

Anti-money laundering guidelines came into prominence globally as a result of the formation of the Financial Action Task Force (FATF) and the promulgation of an international framework of anti-money laundering standards. These standards began to have more relevance in 2000s after FATF began a process to publicly identify countries that were deficient in their anti-money laundering laws and international cooperation.

Each EU country must set up a financial intelligence unit (FIU) in the form of a central national unit. These units are responsible for receiving, requesting, analyzing and disseminating to the competent authorities information concerning potential money laundering or terrorist financing. EU countries must provide their FIU with adequate resources to fulfill its tasks and ensure that it has access to any necessary financial, administrative and law enforcement information.

Offshore banks are banking firms that operate outside a customer’s (depositor’s) home nation, usually in a country that provides tax benefits, secrecy, and other valued services. Among the services typically offered by these institutions are payments and savings account, funds transfers, loans, currency exchanges, portfolio management, and safekeeping of assets. Recent estimates suggest that at least a quarter of globe’s aggregate wealth may pass through these offshore sites. Among the most leading offshore banks are the Bahamas, Bermuda, the Cayman Islands, Hong Kong, Monaco, Panama, and Switzerland. Advantages: protecting the identity and privacy of customers, lenient regulations that allow swifter access to customer accounts, minimal or zero taxes, and sheltering assets from political and financial turmoil.