what does laundering money mean

What is the meaning of money laundering?

Money laundering

Known as money laundering, what is called the name of money laundering that transfers large amounts of money obtained illegally process to clean and viable funds for trading in public activities. [1] Money laundering is also known as a method used to conceal and cover the sources through which money is earned; Through the use of illegal means of investment, and then their profits are invested in legitimate and legal activities.

Money laundering is a crime punishable by lawBecause of its negative impact on the countries' private economy; As this crime allows criminals the ability to dispose of the laundered money and employ it in a range of public activities by concealing its illegal sources, and it also helps them expand their illegal business and make more of this money.

Money laundering tools

There is a set of tools used by money laundering criminals, which range from simple and traditional methods to the use of technological means that help them in the money laundering process. Among the most popular money laundering tools are the following: [2]

  •  Illicit Trade: One of the most popular traditional money laundering tools, which use all commercial channels to facilitate the money laundering process, and this trade includes illegal activities such as drugs, unlicensed weapons, and medicines that do not conform to specifications, and others.
  • The use of a group of financial institutions: they are institutions that contribute to facilitating money laundering operations by providing legal cover within the financial business and activities that they carry out, and thus contribute to converting illegal funds into laundered money.
  • Real estate leasing: It is the one that relies on the use of illegal capital in a group of real estate investment projects, which buy real estate and then lease it to individuals and institutions, and so the illegal money is replaced by legal money.
  • Loans: which are among the most common means used in money laundering. As loans linked to an interesting value are approved, and as a result, illegal money is presented as loan amounts, and then a percentage of interest is collected on its value after a certain period of time has passed.
  • Internet technology: One of the modern means of money laundering, which relies on transferring illegal funds to any other financial investments such as stocks and bonds, through the use of websites that act as a financial intermediary, which facilitates the process of investing unwashed money.

Stages of money laundering

Money laundering depends on a set of stages, namely: [3]

  • Deposit: It is the first stage of money laundering, through which money laundering criminals rely on disposing of their money by transferring it to bank deposits in banks and investment financial institutions, which contributes to replacing it with clean and legal money.
  • Aggregation: It is the method that money laundering criminals rely on to collect it within a group of projects and financial investments that guarantee them adequate coverage for their illegal operations. Aggregation helps provide camouflage for money laundering operations.
  • Consolidation: The last stage of money laundering, through which the illegal funds are mixed with the legitimate funds, and thus the funds are mixed together, and it is difficult to identify them.

The negative consequences of money laundering

Money laundering results in a set of negatives that affect society and the economy, namely: [4]

  • Economic results are a set of results that lead to the emergence of a negative impact on the national economy of each country. Because of the role of money laundering in the decline in the use of healthy capital and its replacement with illegal money, some criminals seek to spread it within the economic market, which leads to a decline in economic development and financial investments, which negatively affects the value of local currencies compared to foreign currencies.
  • Political consequences: They are the results that are related to the threat to the political stability of states due to the use of laundered funds to finance illegal and criminal operations that may lead to the spread of a security and national threat to a country, and political corruption may spread through the use of money laundering and its spread within the state sector.
  • Social outcomes: are the results that affect the entire societal environment. Money laundering criminals seek to spread all kinds of trade that provide the best assistance to them in order to launder their money easily, so they are keen to spread drugs among the youth group as one of the means that helps increase the laundered money, and as a result of this, the infrastructure of society is great.

Anti-money laundering

Many countries of the world seek to combat money laundering by all available and possible ways and means; Therefore, most of these countries established criminal units specialized in this, and then issued a law specific to the penalties for the crime of money laundering, and it is called the Anti-Money Laundering Law, which depends on monitoring this crime by imposing control over the transferred money for the purpose of exporting it, depositing and investing it, or Manipulating its value, converting it into other forms and forms, or following any other process that entails concealing the source from which the money was acquired, and each of these operations, whether applied individually or collectively, is considered a form of money laundering, which It is classified as a crime punishable by law. [5]

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