Vancouver Model for Money Laundering

Blog / Vancouver Model for Money Laundering

The British Columbia (BC) public investigation into money laundering also reported that the Vancouver Model is against Canada's criminal history. The Vancouver Model is a model used for laundering the revenues of contraband drugs and illegal funds from China. The Vancouver Money Laundering Model BC is also widely used, and a large amount of money was laundered with this model.

Using The Vancouver Model in Money Laundering

China has banned its citizens from withdrawing very high amounts of money abroad, which creates a problem for some citizens. The huge amount of money mentioned here is beyond $ 50,000. The fact that large sums of cash were not withdrawn from abroad had a very negative impact on gamblers in China. Before gamblers go to Canada to perform this prohibited activity, they carry Canadian billed suitcases with them. Later, the funds in these bills are laundered in Canada, and the real income of the dirty money is concealed and legalized.

After this stage, Chinese citizens go to casinos in Vancouver, illegally exchanging their money with casino chips. These chips are then converted into Canadian dollars in certain ways. As a result, funds brought from China are also laundered from Vancouver casinos by changing from cash to casino chips. Additionally, once these funds arrive in Canada, they can be mixed with cash from the drug trade, and then the cash is cleared through private mortgages and BC casinos. This money laundering process is called the Vancouver Model.

The Result of The Vancouver Model

The Vancouver Model is a tactic developed by money launderers to avoid suspicion of drug trafficking and organized crime. Money launderers need to hide the illegal source of funds in order to carry out their activities, so they always need to turn those funds into a less suspicious asset. At this point, for criminals, British Columbia is a very attractive place to carry out this activity. Vancouver Harbor provides a trade hub with Asia, and BC has a growing marijuana industry in itself. Apart from that, Vancouver is home to many substance users who maintain a stable customer base. Banknotes used to transport large funds extracted from China in suitcases across borders are usually $20 and $50 bills. These small banknotes are the most frequently used in even the largest businesses.

The negative effects of money laundering through the Vancouver Model were felt in almost all states of Canada. The money laundered also affected foreign citizens from purchasing a property in Vancouver. As a result of affecting property purchasers, housing prices and living costs were significantly higher than the local population's budget. In Canada, it was stated in a report that owners of about half of the city's most expensive homes are purchased using secretly structured purchasing methods. This situation not only affects Canada but also affects China negatively. Money laundering is prone to capital controls of countries.

What to Do to Prevent The Vancouver Model

Because the criminals who implement the Vancouver Model know the traditional ways very well, manual routes change their tactics in order not to go unnoticed. In order to prevent the Vancouver Model, regulators are increasing their regulations on this issue. Defining money laundering with the Vancouver Model is the responsibility of both financial institutions and the casino and real estate industry. Casinos in British Columbia have also taken measures such as showing a legitimate source for spending over C $ 10,000. With these measures, the realization of money laundering and terrorist financing activities is tried to be prevented. The Vancouver Model is not just a money-laundering activity between Canada and China. So it would be quite wrong to think about this crime in Canada and China.

Institutions such as the gambling and real estate sector where the Vancouver Model takes place are easier to prevent this crime if they comply with the AML regulations they are responsible for. Nowadays, awareness of the Vancouver Model is increasing. For this reason, institutions must implement the responsibilities they are responsible for. Organizations need to know who they do business with, who their customers really are. The potential risks of people whose real identity is known can also be determined. Suspicious persons and activities can be detected by checking these people regularly and even by scanning the transactions. In this way, money laundering activities carried out with the Vancouver Model can also be prevented.

Some of the most important components of AML regulations are the implementation of "Customer Due Diligence (CDD)" and "Know Your Customer (KYC)" procedures in organizations. With Sanction Scanner's AML Screening and Monitoring Software, you can easily perform CDD and KYC operations in accordance with the obligations.

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