In its "Report on Money Laundering Typologies" (February 2001) the
FATF was able to document concrete and suspected abuses of online
banking, Internet casinos, and web-based financial services. It is
difficult to identify a customer and to get to know it in
cyberspace, was the alarming conclusion. It is equally complicated
to establish jurisdiction.
Many capable professionals - stockbrokers, lawyers, accountants,
traders, insurance brokers, real estate agents, sellers of high
value items such as gold, diamonds, and art - are employed or co-
opted by money laundering operations. Money launderers are likely to
make increased use of global, around the clock, trading in foreign
currencies and derivatives. These provide instantaneous transfer of
funds and no audit trail. The underlying securities involved are
susceptible to market manipulation and fraud. Complex insurance
policies (with the "wrong" beneficiaries), and the securitization of
receivables, leasing contracts, mortgages, and low grade bonds are
already used in money laundering schemes. In general, money
laundering goes well with risk arbitraging financial instruments.
Trust-based, globe-spanning, money transfer systems based on
authentication codes and generations of commercial relationships
cemented in honour and blood - are another wave of the future.
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