This essay will explore the many strategies used by law enforcement and government agencies that are used to combat money laundering performed by organized crime. I will discuss the effectiveness of certain strategies, and show which strategies produce the best results. The definition of money laundering is not clear cut or easily defined but it is commonly described as the handling of criminal profits, originating from criminal activities such as the illegal sale or buying of fire arms, drug trading, human trafficking illegal gambling, et, to cover up their illegal origin.
This is the process of hiding the illegal origins of money deriving from crime and illegal activities. The process itself is the most crucial step as it allows criminal organizations to keep their profits without putting their source at risk (Danis, Module 9, Slide 1) Most of the illegal profits generated by organized crime commonly derive from the drug trade, financial crimes and especially fraud. It is estimated that approximately $900 billion to $2. 25 trillion has been illegally laundered which is almost 4% of the worlds GDP.
Money laundering is major criminal activity in Canada and is one of the most important factors in keeping organized crime groups afloat and profitable. In order to efficiently and properly eliminate money laundering we must first find the source and stop it. According to Commission on Narcotics Drugs (CND), the drug trade in Canada can possibly generate $3 billion at the wholesale level and close to $13 billion when sold on the street, and most of this money will be laundered. Danis, Module 9, Slide 1) Canadian law enforcement agencies have allocated a large amount of funds and resources to try and eliminated and eradicate the drug trade which will eventually lead to the slowdown of money laundering. There have been many legislative programs put in place by the Canadian government and law enforcement agencies to stop money laundering. The RCMP created the (POC) “Proceeds of Crime Program” who is a group responsible for locating and the removal of illegally obtained and laundered money.
There are 12 (POC) groups in Canada who have been very successful and have already seized over $30 million of criminal assets and cash since they were introduces in 2001. After the success of the (POC) divisions similar groups were created for almost the same reasons to combat money laundering. Such as the Integrated National Security Enforcement Teams (INSETs), Integrated Market Enforcement Teams (IMETs), Combined Forces Special Enforcement Units (CFSEUs) and the Integrated Border Enforcement Teams (IBETs).
Danis, Module 9, Slide 2) In 1989 at the G-7 countries (Canada, France, Great Britain, Germany, Italy, Japan and the United States) got together and created (FATF) The Financial Action Task Force. It has now over 30 members and is the most important international governmental organization that is combating against money-laundering. The main key objectives of (FATF) are to go over and clarify the global standards and protocols for combating money-laundering and terrorist financing since post 9-11.
They also promote global implementation of these standards and are in charge of enforcing them while still keeping an eye open for new money laundering strategies and terrorist financing threats. Danis, Module 9, Slide 5)Other strategies have been put in place in order to combat money laundering such as preemptive economic measures like asset forfeiture which deters criminals and makes it harder for organized crime groups to stay profitable and keep then at an economic disadvantage after the seizure of assets. Danis, Module 9, Slide 7).
The Canadian government started also monitoring financial transaction exceeding $10000 and are keeping records of these financial transactions since the creation of bill C-9 which was an Act to Facilitate Combating the Laundering of Proceeds of Crime implemented to slow down money laundering. People who did not comply with bill C-9 could also possibly face jail time and fines between $50000-$500000. (Danis, Module 9, Slide 14) . Before 1989 the act of money laundering was not technically a criminal offence and it was quite difficult for authorities to seize assets deriving unlawful activities.
This lead to the creation of many Canadian legislations such as Bill C-61 and other federal statues that would grant forfeiture powers to the government. Bill C-61 also forced Revenue Canada to divulge information that may have lead to money laundering charges. (Danis, Module 9, Slide 10) Many strategies and legislation have been put in place to combat money laundering and have been quite successful in the fight against financial crimes. It is now easier and less time consuming for authorities to prosecute and gain personal financial information about suspects. Since these new rules and regulations have come into effect hundreds of millions f dollars have been seized by police and anti-money laundering agencies in the last 20 years.
But these strategies are only effective to an extent, they do have flaws and are problematic at times. The Centre for Justice Statistics admitted that the reported number of money-laundering crimes has increased in the past decade and that Canadian law enforcement has had only a small amount of success in finding culprits, and is having a hard time incarcerated these criminals because money laundering cases are very complex, complicated and are often time and resource intensive and require a large and dedication to complete.
There are also difficulties in prosecuting certain criminals because they may operate there money laundering strategies outside Canada which makes it harder to investigate. (Danis, Module 9, Slide 22) The most effective strategy implemented is probably the creating of FAFT. FAFT has a large amount of international members and many more available resources available to its disposal than other smaller local groups. The FAFT is also focused on terrorist funding and is associated with other world agencies such as the IMF which makes it much easier to track and investigate local and international money laundering schemes.
Other effective strategies such as bill C-9 have become quite successful and produced more results because it is capable of monitoring anyone who money substantial amounts of money in and out of financial institution and alerts government agencies of these transactions. (Danis, Module 9, Slide 6-15) Danis, M. (2012). Combating Money Laundering. Retrieved from http://www. econcordia. com/cour… ganized_crime/lesson9/
