MONEY LAUNDERINGin the U.S. and abroad

Allyson Bowers

MONEY LAUNDERING: THE SPECIFICS

What: “conversion of criminal incomes into assets that cannot be traced back to the underlying crimes”

3 phases: (1)placement, (2) layering, (3) integrationAn estimated 2 to 5% of the global economic output, equal anywhere from $590 billion to $1.5 trillion

U.S. laws & regulations:

Important International Actors:Financial Action Task Force on Money Laundering (FATF)Law Enforcement, Organized Crime & Anti-Money Laundering Unit, UNODC

Drug TradeThe Issue:

DRUG TRADE & MONEY LAUNDERING

• Why it Matters?• The Mexican drug cartels and Colombian suppliers generate, launder, and remove $18-39

billion from the US annually1

• Effect on national and international economy• “Unchecked, money laundering can erode the integrity of a nation’s financial institutions. Due

to the high integration of capital markets, money laundering can also adversely affect currencies and interest rates. Ultimately, laundered money flows into global financial systems, where it can undermine national economies and currencies.”2

• Corruption, Security concerns, Organized crime, ensuing violence, etc.

• Parties Involved:• Countries

• (i.e. Colombia, Mexico, U.S.)• Gangs & other guerrilla groups

• (i.e. FARC, Sinaloa cartel) • Banks

• (i.e. former Wachovia, HBSC)

POLICY PROPOSAL:

Focus: EnforcementSub-focus: international

Why?• “The actions fall in the cracks between sovereign national law and

international controls.”1

• “No credible estimates are available as to the volume of money laundering, or its distribution across countries and activities.”2

Final Thoughts & Conclusion