Criminals use diverse methods to launder money which is the proceeds of crimes such as drug trafficking, terrorist activities, and tax evasion. As with other criminal activity, these methods are used to sidestep regulatory and law enforcement measures and to exploit current and emerging channels.

1. Banking system

The major channel for money laundering is the banking system.

Examples:

  • banks
  • foreign exchange
  • money transfer
  • offshore banks
  • remittance services.

2. Cash intensive businesses

A less visible channel is where criminals are connected to businesses which have a high volume of legitimate cash flow.

Examples:

  • building and construction
  • convenience store
  • entertainment
  • motor vehicle retail sectors
  • restaurants, hotels, pubs, and clubs
  • taxi services

3. Gaming sector

Another significant channel for money laundering is the gaming sector because in addition to gambling, many casinos and gaming facilities offer services similar to financial institutes. This includes accounts, foreign exchange, money changing, electronic funds, transfers, cheque issuing, and safety deposit boxes.

Examples:

  • casinos
  • pubs and clubs that have racing and sports betting facilities

4. International trade or investment

International trade or investment is a less visible channel for money laundering.

Examples:

  • cross-border movement of cash
  • real estate purchased with laundered funds
  • purchase of luxury items such as jewelry that can be moved across borders
  • securities or other financial instruments that are purchased in the launderer’s legitimate business entities’ names.

5. Professional advisers

Money launderers may seek assistance from professional advisers, such as financial advisers or legal advisers, either knowingly or unknowingly.

Sophisticated money launders use professional advisers who work around the laws, regulations, and controls in the financial sector, or who understand how to utilise schemes in countries with non-existent or weak anti-money laundering and counter terrorism financing controls.

6. Unregulated financial services

Emerging channels in crypto-currency exchange such as Bitcoin and Ripple, present new avenues for money laundering.

Find out how you can access online learning on anti-money laundering and counter terrorism financing now

Sentrient provide an online AML and CTF course that enables a Reporting Entity to deliver robust training for its staff that has been legally endorsed and covers legislation for all states and territories in Australia.

For more information contact us on 1300 040 589 or visit our website at www.sentrient.com.au today.