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Factsheet money laundering

factsheetmoneylaunderingAt the level of the European Union a new anti-money laundering directive is currently under way. German NGO World Economy, Ecology and Developmet (WEED) has recently taken up the issue in a factsheet and focusses on the situation in Germany specifically. Contrary to popular perception, Germany is a popular destination for money laundering activities. Being a liquid market with high cash flow makes the country attractive while also complicating the monitoring of financial flows. Its central location between Eastern and Western Europe makes Germany an ideal trading center. Regulatory weaknesses amplify the problem.

October 10, 2013 | World Economy, Ecology and Development (WEED)

Money laundering and the reform of the Money Laundering Directive

Money laundering – a global problem

Money laundering is the legalisation of illicit funds or assets through their introduction into the economic cycle. The illegal funds are often closely linked to organised crime and originate from illegal activities involving arms, drugs, human trafficking, extortion or corruption. Lately, the definition in many places also includes the crime of tax fraud. However, there is no internationally standardised definition of money laundering. One reason is that new ways of implementing money laundering methods can always be found in a globalised world, including Internet-based transfer systems which allow payments to be handled anonymously. These illegal activities carry the risk of undermining legal structures.

Although there are numerous studies on money laundering, its true scope can hardly be measured. According to calculations by the United Nations Office on Drugs and Crime (UNODC), the annual volume amounts to between 800 billion and two trillion $ U.S. (2-5% of the global GDP). According to estimates by the U.S. organisation Global Financial Integrity, this sum includes $ U.S. 723-844 billion in corrupt funds flowing from developing into industrialised countries. According to the Swiss money laundering expert Andreas Frank, of the total money laundered worldwide, less than 1% is confiscated.




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