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What Are the Penalties for International Money Laundering?

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  • Written By: Renee Booker
  • Edited By: E. E. Hubbard
  • Last Modified Date: 24 June 2014
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Money laundering is defined in various ways throughout the nations of the world; however, the basic concept involves the transfer, or use, of money acquired through illegal means in an attempt to hide the money. International money laundering does not have a single definition, as the precise definition will change from one country to the next along with the possible penalties. Most jurisdictions have fairly serious penalties for international money laundering, including the possibility of a costly fine and/or a lengthy prison sentence.

Money laundering has been around as long as crime and currency have co-existed. When a criminal robs a bank, the money must be "laundered" so the bills are not traceable. Large scale drug operations often have huge amounts of cash that must be disposed of and turned into spendable money. Both of these are examples of money laundering. Many money laundering operations are international in nature because either the illegal enterprise is international or because there is no realistic way to launder the money in the country of origin.

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Many of the world's jurisdictions have enacted legislation that attempts to identify and prevent international money laundering. Within the United States, for instance, as of 2011, all cash monetary transaction over $10,000 US Dollars (USD) must be officially reported to the government. In addition, anyone who feels a transaction is "suspicious" must also fill out a suspicious activity report. The European Union has a similar requirement for transaction over €15,000 Euros (EUR). The United Kingdom has an especially liberal definition of money laundering and, as such, almost anyone who works in any type of financial market is required to report suspicions of money laundering to the authorities.

The penalties for international money laundering can vary as widely as the definitions. Within the United States, money laundering is defined under the United States Code, Title 18 which essentially makes it a a crime to knowingly use the proceeds of an illegal activity for a financial transaction when the person knows that the transaction is an attempt to conceal the source of the funds or to avoid the reporting requirements of the United States government. As of 2011, the penalty under United States law is a fine of up to $500,000 US Dollars (USD) or twice the amount of the transaction, whichever is greater, and a term of imprisonment of up to 20 years. Most other large financial markets in the world have both financial and prison penalties associated with the crime of international money laundering.

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