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What are the Best Tips for Preventing Money Laundering?

Article Details
  • Written By: Felicia Dye
  • Edited By: Melissa Wiley
  • Last Modified Date: 12 October 2017
  • Copyright Protected:
    2003-2017
    Conjecture Corporation
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Preventing money laundering will be most effective if the government, the private sector, and the public work together. Governments can play their role by empowering authorities to take action on this issue and imposing regulations on the industries that criminals rely on. Businesses can show their commitment by making relevant prevention efforts in addition to those required by law. If citizens are given a means to provide information, they can assist by exposing illegal activity and new money laundering methods.

A government can display its dedication to preventing money laundering by setting up a task force. Large corporations, such banks and wiring services, should also have departments that are dedicated to this cause. It is important for these public and private labor forces to work together on a national and international basis.

Imposing reporting requirements on banks and money wiring services can provide a nation with effective crime-fighting tools. Such measures usually require businesses in these categories to gather information on transactions over a certain amount. This may be done by staff members interacting with their clients, or it may simply involve the clients filling out a standard form.

These businesses can play an even more critical role in preventing money laundering if they take action other than that required by a government. Banks, for example, can implement regulations that delay the processing of transactions that exceed a certain amount. Money wiring services can limit the number of transactions allowed between two parties within a given time frame. These businesses should also strive to stay abreast of money laundering trends and invest in technology that aids in the prevention and detection of this crime.

Any other businesses that have staff who are likely to interact with money launderers or their proceeds should commit to training those staff members. Having a broad range of individuals with the skills to identify potential problems and take the necessary measures can have a major impact on reducing the prevalence of the money laundering. Businesses should also identify how their products or services may be used to launder money, and they should respond by implementing the appropriate preventative measures.

Granting seizure power to the proper authorities is also an excellent means of preventing money laundering. For example, in the UK, police officers and customs officers have the ability to seize large sums of money that individuals try to enter or exit the country with. This allows authorities to intervene in a situation where an airline passenger is found with substantial amounts of cash but cannot provide a convincing explanation for having it. Without this ability, authorities cannot effectively intervene when suspicious funds are discovered. Instead, they must generally wait until they have enough evidence to make serious allegations of a crime.

The role of the public should not be underestimated. Providing anonymous hotlines can allow individuals to share information that can be essential in preventing money laundering. Having a rewards-for-information program may also motivate more people to get involved. This may lead to high-profile cases, which can be used to deter criminals.

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