The control of risks associated with crime, terror and subversion
| DOI | https://doi.org/10.1108/13685200410809913 |
| Published date | 01 July 2004 |
| Date | 01 July 2004 |
| Pages | 201-206 |
| Author | Claes Norgren |
| Subject Matter | Accounting & finance |
ANALYSIS
The Control of Risks Associated with Crime, Terror
and Subversion
Claes Norgren
The matter of the control of risks associated with
crime, terror and subversion falls in the mandate of
the work of the Financial Action Task Force on
Money Laundering (FATF). Below there is an over-
view of FATF policy, but discussion then falls on
more concrete measures such as the developing of
standards and the progress that the FATF has made
over the last year. First, there is an assessment of the
problem of money laundering and terrorist ®nancing
and the need for the international community to take
action.
THE PROBLEM
Money laundering and terrorist ®nancing are serious
problems facing not only nations but also the global
community. These problems compromise the stab-
ility, transparency and eciency of ®nancial systems.
They have serious consequences if allowed to occur
without preventative action.
Money laundering is de®ned as the processing of
criminal proceeds to disguise their illegal origin in
order to legitimise the gains of crime. In the same
manner terrorist ®nancing can be characterised as the
direct or indirect provision of funds with the intention
that they should be used in order to carry out an act
that constitutes terrorist acts. The techniques used
to launder money are essentially the same as those
used to conceal the sources of terrorist ®nancing.
Funds used to support terrorism may originate from
legitimate sources, criminal activities, or both.
From these broad de®nitions it is clear that the main
problem is criminal activity. However, the FATF is
taking action by focusing on the ®nancial link to the
core problem. The laundering of money is being crim-
inalised from a number of predicate oences. In terror-
ist ®nancing action is being taken against the ultimate
crime by attacking the preceding ®nancing.
The eort to combat money laundering stems from
the ®ght against drugs in the late 1980s. The ®ght
against terrorism, a long-term problem, took a new
avenue after 11th September. After that the FATF
took on the task of actively combating terrorist ®nan-
cing. Although it might seem that these are two quite
dierent problems, it is important to see how closely
related they really are.
What are the eects if no one counters these pro-
blems or fails to perceive that they exist? The eects
are twofold: ®rst of all, the consequences that come
from the criminal activities as such and secondly the
impact on the ®nancial system.
It is well known that widespread criminal activity
has severe repercussions on trade, growth and wealth
in society. Who will develop a business if there is
no security for the investment and for the people
employed? The absence of corrective action will
permit criminals to operate using their ®nancial
gains to expand their criminal activities and to foster
illegal activities such as corruption, drug tracking,
arms tracking, smuggling and terrorism. Needless
to say, if every opportunity is not taken to limit such
crimes, in addition to human losses there will also be
losses in economic terms.
Money laundering, organised crime and economic
crime are often only dierent facets of an increasingly
integrated criminal activity. Criminal organisations
will use their pro®ts to acquire control of legitimate
businesses. They also use those pro®ts as direct bribes
to individuals and governments. With time, such
practices can seriously weaken the moral and ethical
standards of society and even jeopardise its democratic
institutions. This will create incentives for individuals
and ®rms. In the end a cancer-like growth could attack
the very fabric of society.
What will happen if the ®nancial system is a harbour
for money laundering and terrorist ®nancing? If
this is the case it will aect the public con®dence in
banks and ®nancial markets. Economies with growing
and developing ®nancial centres are particularly
exposed. Corruption and criminal in®ltration can
expose banks and ®nancial systems to sudden collapses
with costs resulting from a lack of public trust and
Page 201
Journal of Money Laundering Control Ð Vol. 7 No. 3
Journalof Money Laundering Control
Vol.7, No. 3, 2004, pp. 201± 206
#HenryStewart Publications
ISSN1368-5201
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
