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Surprising Money Laundering Facts You Should Not Miss

Surprising Money Laundering Facts You Should Not Miss

Money Laundering is continuously evolving, and criminals are adopting new methods to indulge in financial crimes. Several measures have been taken by the governments of different countries to deal with this burgeoning issue.

The governments have adopted strict measures to prevent money laundering and terrorist financing, which is a massive threat to the world. Each country has its own AML compliance rules and regulations. The FATF also provides a comprehensive set of recommendations that should be followed to identify money laundering and prevent it.

Let's know some interesting facts about money laundering that will amuse you and let you know how the landscape of financial crime is evolving at a fast pace.

  • In 2020, $10.4 billion of fines were levied on global banks for violating money-laundering rules and regulations.
  • A study by Forbes reveals that globally 90% of money laundered every year goes unreported!
  • As per the International Monetary Fund, the laundered money equals 2% and 5% of the global GDP each year. It is a humongous figure and a cause of worry for governments worldwide. Criminals try to take advantage of the loopholes to run the illegal money through the regulated financial system. It has been estimated that laundering cash accounts for 5% of the global gross domestic product (GDP). But this is an estimated amount which could be even higher as a vast amount is not traced, and so you can imagine the extent to which the money is laundered.
  • Nearly $300 billion are laundered every year in the U.S.
  • Annually, over 200,000 money laundering cases are reported in the U.K.
  • The amount of money laundered in 2019 in Mexico was $50 billion.
  • As per El Economista, drug cartels and other illegal organisations laundered approximately $50 billion in 2019 in Mexico.
  • The AML software is expected to have registered a CAGR of 15.2% from 2018 to 2025. It is estimated to reach $2717.0 by 2025. The reason for this unprecedented growth is the rise in money laundering cases globally, the introduction of strict AML rules and regulations, and increased expenditure on technology among financial institutions.
  • As per Europol, approximately $62 million were laundered in 2009 using real estate investments.
  • According to the 2019 Basel AML Index, New Zealand, Estonia, Finland, Sweden, and Macedonia are the five nations successfully fighting money laundering.
  • According to the FBI, the FBI's Internet Crime Complaint Centre (IC3) received 791,790 complaints of suspected crimes. The number was equally staggering in the year 2019-467,361.
  • As per a study by Forbes, AML non-compliance fines were imposed on 12 of the 50 largest financial institutions in 2019.
  • According to the 2019 Basel AML Index, the five countries, Mozambique, Liberia, Laos, Myanmar, Afghanistan, are prone to money laundering. It is noteworthy that countries that lack a reliable infrastructure and have a weak financial system become the victim as money launderers will exploit their vulnerabilities. However, Financial Institutions are taking AML compliance seriously and improving their compliance framework to prevent illicit money from entering their system.
  • As per Transparency International, more than $459 billion worth of illegal money was transferred through U.K.-based financial institutions in 2019. The amount is enormous, which exposes how vulnerable financial institutions are at the hands of criminals.
  • As per the Organised Crime and Corruption Reporting Project) each of the Big Four accounting firms (KPMG, PwC, Ernst & Young, Deloitte) received suspicious payments in 2019. It's a shocking revelation. It indicates that even the most respected institutions can fall prey to the notorious activities of criminals. The irony is that they are the top organisations expected to be ahead of the criminals and not become the victims.
  • The money laundering scenario in the United States is also shocking. It is estimated that $300 billion accounts for financial crime in the country, as per the U.S. Department of Treasury. But the actual number might be more than that indicated. The funds may be running through various forms, such as real estate investments or university grants, or perhaps online video games. Once the money has been laundered and run through the legal systems, it is challenging to differentiate illicit money from legit money, and criminals go scot-free.
We understand that money laundering cases are evolving and growing fast from the above-stated facts. Organisations are vulnerable, and criminals use every loophole to launder their illicit money. So, the AML compliance framework should be made robust, leaving no stone unturned to give criminals even a single chance to misuse the legal, financial systems and pose a threat to the country and the world economy at large.

Continuous monitoring and consistent adherence to the AML compliance rules by adopting the measures and recommendations provided should be the way forward for financial institutions.

Conclusion

Having stringent customer verification processes and implementing them without fail should be the norm for every financial and other regulated entity to combat money laundering and terrorist financing. AML effectiveness is implemented by how well the country’s anti-money laundering and countering the financing of terrorism (AML/CFT) framework is implemented.

It depends on different factors- the willingness of the company’s top officials, public transparency, and the quality of the AML campaign. The scale and the frequency with which criminals use different methods are a lesson for the authorities. Financial institutions and other regulated entities should diligently follow the AML practices, and continuous monitoring is one of them.

Financial institutions think that compliance measures will drain their resources. But with the advent of technology and sophisticated AML software, the compliance process has become cost-efficient. Moreover, the AML compliance process has become more effective. Financial institutions can identify money laundering cases and combat them successfully with the help of technology. In addition, AML consultants also offer reliable services that help institutions comply with the AML rules and regulations.

Reliance on technology has increased, and organizations are choosing AML software to strengthen their fight against money laundering. They rely on top AML consultants and access a wide range of AML compliance services. AML Bahrain is a leading AML consultant offering an array of AML compliance services such as AML Training, in-house AML department set up, AML software selection, and many more. For the complete range of AML compliance services, feel free to visit AML Bahrain.

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