Money laundering

Introduction Money laundering as a crime only attracted interest in the 1980s, essentially within a drug trafficking context. It was from an increasing awareness of the huge profits generated from this criminal activity and a concern at the massive drug abuse problem in western society which created the impetus for governments to act against the drug dealers by creating legislation that would deprive them of their illicit gains. The term "money laundering" is said to originate from Mafia ownership of Laundromats in the United States. Gangsters there were earning huge sums in cash from extortion, prostitution, gambling and bootleg liquor. They needed to show a legitimate source for these monies. . As a 1993 UN Report noted: The basic characteristics of the laundering of the proceeds of crime, which to a large extent also mark the operations of organised and transnational crime, are its global nature, the flexibility and adaptability of its operations, the use of the latest technological means and professional assistance, the ingenuity of its operators and the vast resources at their disposal Money Laundering refers to the adaptation or "Laundering" of money which is illegally obtained, so as to make it appear to originate from a legitimate source. Money Laundering is being employed by launderers worldwide to conceal criminal activity associated with it such as drug / arms trafficking, terrorism and extortion. But in simple terms it is the Conversion of Black money into white money. Money laundering is the illegal practice of filtering ill-gotten gains or dirty money through a series of transactions, so that the funds are cleaned to look like proceeds from legal activities. Money laundering is obsessed by criminal activities and conceals the true source, ownership, or use of funds. The International Monetary Fund has stated that the aggregate size of money laundering in the world could be somewhere between 2 and 5 percent of the worlds gross domestic product. Money Laundering has a close nexus with organised crime. Money Launderers accumulate huge profits through drug trafficking, international frauds, arms dealing etc. Cash transactions are

mostly used for Money Laundering as they assist the disguise of the true ownership and origin of money. Criminal activities such as drug trafficking transactions. The most common types of criminals who need to launder money are drug traffickers, embezzlers, corrupt politicians and public officials, mobsters, terrorists and con artists. Drug traffickers are in serious need of good laundering systems because they deal almost wholly in cash, which causes all sorts of logistics problems. One important part of money laundering is the affinity and need for perpetrators to run cross border schemes for the purpose of disguise and/or to take advantage of the rough developments in the national anti money laundering regimes. obtain an air of secrecy through cash

Problem Statement: Unemployment and Poverty enhance the volume of money laundering, How much of level money laundering plays a role in enabling terrorists to finance their activities and what is the role of money laundering in curruption within the organizations and what is the role of weak Governance in money laundering. Objectives of th study: To express the existance of some of the extensive crime money laundering in pakistan. To analyse the affects of the money launering with particular references of social, political and cultural aspects. To analyse the current legal regimes as regards regulation of money laundering in pakistan.

Questions of the study: 1. What is money laundering? 2. What is factors that effects the money laundering? 3. Is money laundering help the terrorists to finance their activities? 4. What is the currently legal regimes regarding the regulation of money laundering in pakistan

Significance of the study: This study is designed as assessing the numerious effects of the money laundering in pakistan, and to verify whether or not the legal framework is sufficient to sucessfully address the terrorize. The practically importance of the study therefore, is that once an effective mechanism to restrain money laundering has been devised, there would be outstanding development in every phase of society.

Research Model

Unemployment

Weak Governance

Money Laundering

Poverty

Corruption

References 1. Nand C. Bardouille, "The Offshore Services Industry in the Caribbean: A Conceptual and Sub-Regional Analysis," Economic Analysis and Policy (September 2001). 2. Mark P. Hampton, "Where Currents Meet: The Offshore Interface Between Corruption, Offshore Finance Centres, and Economic Development," IDS Bulletin , vol. 27, no. 2 (1996) 3. IMF Staff Report on Nigeria, 2001 available at http://www.waado.org/NigerDelta/ Essays/Nigerian Economy/IMFonNigerianEconomy.html 4. Pakistan moves on money laundering, BBC News, Nov. 6, 2001, at http://news.bbc.co.uk/hi/english/business/newsid_1641000/1641138.stm