What is the Money Laundering?

Money Laundering is to ensure that the money that has been acquired illegally appears to have been obtained legitimately. In simpler terms, it is the process of turning the profit of illegal activity into a legitimate income. Money laundering, which is the process of concealing the proceeds of crime and integrating them into the legitimate financial system, is also a method used to hide the nature, source, location, situation, and movement of a crime or to give a legal image to the proceeds of crime. 


How Does Money Laundering Work?

Money laundering is essential for criminal organizations to use illegally obtained money effectively. The money laundering process usually consists of three steps: placement, layering, and integration.

  • Placement: The first entry of illegal money into the financial system is the settlement.
  • Layering: This step hides the source of money through a series of transactions and bookkeeping tricks.
  • Integration: Money laundering is withdrawn from the legitimate account, and the money is returned to the criminal from the legitimate source.

Not only are these three methods of money laundering, but also There are methods other than. To illustrate; 

  • Fake Export: It is a method frequently used in recent years in Europe. It can make it appear as exporting to any country on paper.
  • Stock Market: Money can be laundered and displayed as a business by buying stocks or bonds through brokers.
  • Antiques and Paintings: Antiques or paintings are taken with money that cannot be transferred. Later, these are sold against foreign currency, and money is laundered. 


Electronic Money Laundering

Electronic money provides an easy way to transfer value without revealing its identity, such as untraceable banknotes. P2P is the transfer between sides; it makes it even more difficult to detect black money. Money can be transferred or withdrawn when there is little or no residual. Money can also be streamed through online auctions and sales and gambling websites and converted into real, usable, and untraceable "clean" money.

The newest form of money laundering involves cryptocurrencies like Bitcoin. While not entirely anonymous, they are increasingly used in racketeering schemes, drug trafficking, and other criminal activities due to their relative anonymity compared to more traditional forms of currency. 

What Is The Effect of Society Money Laundering?

If money laundering is not controlled and these crimes continue to be committed, this situation's social and political costs can be severe. In addition to these costs, money laundering's economic and political impact can weaken the social fabric, collective ethical standards, and, ultimately, the democratic institutions of society. In countries transitioning to democratic systems, this criminal influence can undermine the transition process.


What Should Businesses Do To Prevent Money Laundering?

  • Tax evasion should be prevented in all steps, from production to consumption, and significant money movements should be monitored.
  • Local governments should be fully authorized in the areas.
  • The media should fully support the fight against organized crime and should not broadcast to legendary mafia members.
  • In the private sector, cartels should be prevented, and the underground economy should be reduced by eliminating tax-free earnings as much as possible. 
  • Businesses can protect themselves from financial crimes and strengthen AML compliance processes using AML software such as Sanction Scanner. 


Sanction Scanner's Pep, Sanction, and Watch Lists, which are updated every 15 minutes, support preventing money laundering and terrorist financing with more than 3000 data from more than 220 countries. Sanction Scanner customers continue to protect their reputations and reduce their workloads while avoiding risks.


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