PracticeAccounting FirmsMoney launderers’ techniques highlighted

Money launderers' techniques highlighted

Financial Action Task Force report shows how money launderers mask their audit trails

The abuse of alternative remittance systems and insurance policies to mask
audit trails that can highlight money laundering is the focus of a new report
from the Financial Action Task Force (FATF).

The global anti-money laundering body lists techniques used in these
industries by organised criminals in its latest annual ‘money laundering and
terrorist financing typologies’ report.

It warns that the growth in alternative remittance systems, which enable
international payments to be made outside established banking services, can help
criminals ‘obscure the audit trail for criminal money’.

Such systems are often complex and informal, ‘due to the intricate settlement
systems used and the number of jurisdictions through which a transfer could
pass’, making it difficult to trace payments.

Even where an alternative remittance system is registered, the mixing of
funds in a particular transaction can also ‘break the audit trail’, warns FATF.

Regarding insurance, the report describes methods ranging from simply buying
life insurance with criminal money and then cashing in the policy, to buying
expensive goods, insuring them, and then pretending they are stolen.

The report also examines the trafficking of human beings, noting that
criminals in this trade often use professional money launderers to hide their
illicit incomes.

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