Byline: Ibtisam Butt, Azhar Rashid and Salman Khan
Money laundering is a scheme of continuous process in which criminals try to disguise the identity of the actual owner, and deliver the money to the destination which is obtained through criminal conduct2.Ultimate Aim of behind all this process of making it believed that the receiving income have come from a legitimate source3.The process of ML revolves around 3 stages primarily, first stage which is compose of business precipitance through foreign remittance, depositing cash through some structured transactions. Second stages involve layering, which is done through movement of illegal funds. They are dispersed through continuous flow of cash in order to conceal its source. It is performed with series of conversion so that funds are moved far distant for making it more impeccable to be the part of secure financial system which is done through some multiple banks and accounts conversion of assets .
These are outward foreign remittance through banks or illegal transfers of money through local points which after numerous circulation from one point to the other point finally reached back to destination or to the third party account. Third and the final stepis the involvement of re-entry into the legitimate economy by integration of funds with legitimate proceeds. By doing so the illegal assets are purified into white and become form of legitimate funds. The stakeholder of funds now can invest, sell and buy any assets, performbusiness, recycling corporate financing trade transaction and invoicing.
Money laundering affects badly on larger scale, the reduction of revenue, collection of taxes and weakens the government control over the economy. It leads to the social injustice as the criminal enjoys more luxurious life style and protocol at the cost of society, which should have been invested on their comfort. It helps the criminals to invest again and again for illegal funds for business hence affects the overall financial system of markets. It finally puts the question mark on the transparencyof financial system andcredible viable actions of the government to take appropriate effective measures against the money launderer.
Global initiative for Combating Money Laundering and Terrorist Financing
Various legislations have been placed which are working very effectively at global level to control money laundering, few of them are as followed
* Financial Action Task Force (FATF)
* United Nation Convention Against Corruption(2003)
* International-Convention for Suppression of Financing of Terrorism-2001(SFT)
* Palermo Convention(2000)- Transnational Organized Crimes (TOC)
Credibility of Financial Action Task Force (FATF)
Currently FATF has been internationally renowned and acknowledged for its certain standards, actions and perhaps the most effective organization of all against Money-Laundering and terrorist financing. This Task Force was founded in 1989 summit by the collaboration and efforts discharged by G7 countries. This organization at the beginning had only 16 countries which on the basis of popularity and some well renowned effective recommendations, it grew to 37 countries.FATF performs to locate vulnerabilities at various levels by giving safety to the global financial system with the collaboration of international stakeholders. It is formally known as international standards for combating money-laundering and proliferation of mass destruction4. So the pattern of FATF, nine regional bodies of FATF style have also been established all across which are5
* Eurasian Group (EAG) Moscow, Russia;
* Caribbean Financial Action Task-Force (CFATF)Port of Spain, Trinidad and Tobago;
* Middle East and North Africa Financial Action Task-Force (MENAFATF)Manama, Bahrain;
* Council of Europe Anti-Money Laundering...