Money laundering is indicative of past and future criminal activity, as well as being a crime in and of itself in the present tense. The laundering of money is an attempt to separate the monies from the criminal act from which it was gained or to which it will be used. The source of the funds becomes muddled and disguised until it resembles the funds of honest gains. Trails of deposits and withdrawals are eliminated and the funds appear legitimate all the while while evading incomes taxes.
The reputation of a country’s financial systems relies on the dismantling of such crime rings. The integrity of the financial institutions becomes eroding through the occurrence of criminal activities, which in turn affects the honest and legitimate competition between businesses, and the survival of those who are conducting legitimate transactions. This can have disastrous effects on the economy and the well being of the citizens of the society.
Money laundering not only the country in which it takes place, but ultimately affects every nation, as part and parcel of the entire process involve the constant shifting of assets in the international markets and institutions as well. In 1970 the United States Congress enacted the Bank Secrecy Act in response to what had already at that time become a serious concern and threat. This is a set of policies and procedures that are designed to maintain the validity and accuracy of an institutions records of the transactions that take place.
Not only is this intended to ensure that the banks are not involved in the corruption, but serves to protect those who are not involved. If accurate records are kept it is easy to defend one’s innocence if it is called into question. The accuracy of a financial institutions records is of utmost importance, as the records are always admitted into the evidence of cases involving money laundering and financial corruption.
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