Money laundering is a multibillion dollar industry that impacts legitimate business interests by making it much more difficult for honest businesses to compete in the market since money launderers often provide products or services at less than market value. Where a financial institution or business is also regulated by the government, money laundering or a failure to put reasonable anti-laundering policies in place can result in a revocation of a business charter or government licenses.
Businesses that associate with people, countries or entities that launder money also face the possibility of fines. ING, the Royal Bank of Scotland, Barclays and Lloyds Banking Group are all among institutions that have been fined for being involved with transactions associated with money laundering activities in countries such as Iran, Libya and Sudan.
Money Laundering Definition
Money laundering is a crime defined as the process of creating the illusion that large amounts of money obtained from serious crimes actually originated from a legitimate source. Laundering is often done through crimes such as drug trafficking or terrorist activities. It is estimated that more than $800 billion is laundered annually.
International bank HSBC has also been fined for a failure to put proper anti-money laundering measures (AMLs) in place. According to the Unite States federal government, HSBC has been guilty of little or no oversight of transactions by its Mexican unit that included providing money-laundering services to various drug cartels involving bulk movements of cash from HSBC's Mexican unit to the U.S. The government says HSBC failed to maintain proper records as part of its AML measures. This includes a huge backlog of unreviewed accounts and a failure by HSBC to file Suspicious Activity Reports (SARs).
After a year-long investigation of HSBC the federal government indicated the institution had failed to comply with U.S. banking laws and consequently subjected the U.S. to Mexican drug money, suspicious traveler's cheques and bearer share corporations.
Corporations such as HSBC are subject to several federal laws that seek to prevent money laundering. These include the Bank Secrecy Act, the Trading with the Enemy Act and title III of The Patriot Act called the "International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001."
Title III seeks to prevent the exploitation of the American financial system by parties suspected of terrorism, terrorist financing and money laundering. The law imposes strict bookkeeping requirements and also authorizes the Secretary of the U.S. Treasury to develop regulations that encourage better communication between financial institutions with the goal of making it more difficult for money launderers to hide their identities. The Treasury can also halt the merger of two banking institutions if both entities have a history of failing to put adequate anti-money laundering procedures in place.
The Association of Certified Anti-Money Laundering Specialists (ACAMS) offers certification for anti-laundering professionals known as Certified Anti-Money Laundering Specialists (CAMS). Requirements to gain CAMS certification include obtaining 40 qualifying credits based on education, work experience and passing the CAMS examination. Professionals who earn CAMS certification may work as brokerage compliance managers, Bank Secrecy Act officers, financial intelligence unit managers, surveillance analysts and financial crimes investigative analysts.