Punishment for money laundering [Section

18.4

Initiatives taken at international level to deal with the problem of money laundering

UN global programme against money laundering

Objectives and functions of the Financial Action Task Force (FATF)

(4) Compromised economy and private sector: Money launderers are known to use “front companies” i.e., business enterprises that appear legitimate and engage in legitimate business but are, in fact, controlled by criminals. These front companies co-mingle the illicit funds with legitimate funds in order to hide the ill-gotten proceeds. (5) Damaged privatization efforts: Money launderers threaten the efforts of many countries to reform their economies through privatization. These criminal organizations are capable of outbidding legitimate purchasers of former state-owned potential for more criminal activities and corruption, as well as deprive the country of what should be a legitimate, market-based, taxpaying enterprise. Since money laundering is an international phenomenon, transnational co-operation is of critical importance in the fight against this menace. A number of initiatives have been taken to deal with the problem at international level which are given below: The UN or the Bank for International Settlements, took some initiatives in 1980’s to address the problem of money laundering. Financial Action Task Force (FATF) in 1989, regional groupings, such as the European Union, Council of Europe, and organization of American States also established anti-money laundering standards for their member countries. The major international agreements addressing money laundering include the UN Vienna Convention) and Council of Europe Convention on Laundering, Search, Seizure and been the subject of pronouncements by the Basle Committee on Banking Regulation Supervisory Practices, the European Union and the International Organization of Securities Commissions. Office of the Drug Control and Crime Prevention implement this programme against Money Laundering with a view to increase the effectiveness of international action against money laundering through comprehensive technical cooperation services offered to Governments. The programme encompasses following three areas of activities, providing various means to states and institutions in their efforts to effectively combat money laundering: Technical co-operation is the main task of the programme. It encompasses activities of creating awareness, institution building and training. The research and analysis aims at offering States Key Information to better understand the phenomenon of money laundering and to enable the international community to raising the overall effectiveness of law enforcement measures. The implementation of the global programme against money laundering is carried out in the spirit of co-operation with other international, regional and national organizations and institutions. The Financial Action Task Force is an intergovernmental organization founded in 1989 on the initiative of the G7 countries to develop policies to combat money laundering. In 2001 the purpose expanded to act on terrorism financing. It monitors countries’ progress in implementing the FATF Recommendations by ‘peer reviews’ of member countries. The FATF Secretariat is housed at the headquarters of the OECD in Paris.