M ONEY L AUNDERING in the U.S. and abroad Allyson Bowers

M ONEY L AUNDERING : T HE S PECIFICS What: conversion of criminal incomes into assets that cannot be traced back to the underlying crimes 3 phases: (1)placement, (2) layering, (3) integration An estimated 2 to 5% of the global economic output, equal anywhere from $590 billion to $1.5 trillion U.S. laws & regulations: Important International Actors: Financial Action Task Force on Money Laundering (FATF) Law Enforcement, Organized Crime & Anti-Money Laundering Unit, UNODC Bank Secrecy Act (1970) Money Laundering Control Act (1986) Anti-Drug Abuse Act of 1988 Annuzio-Wylie Anti-Money Laundering Act (1992) Money Laundering Suppression Act (1994) Money Laundering & Financial Crimes Strategy Act (1998) Patriot Act (2001) Intelligence Reform & Terrorism Prevention Act (2004)

Drug Trade The Issue:

D RUG T RADE & M ONEY L AUNDERING Why it Matters? The Mexican drug cartels and Colombian suppliers generate, launder, and remove $18-39 billion from the US annually 1 Effect on national and international economy Unchecked, money laundering can erode the integrity of a nations financial institutions. Due to the high integration of capital markets, money laundering can also adversely affect currencies and interest rates. Ultimately, laundered money flows into global financial systems, where it can undermine national economies and currencies. 2 Corruption, Security concerns, Organized crime, ensuing violence, etc. Parties Involved: Countries (i.e. Colombia, Mexico, U.S.) Gangs & other guerrilla groups (i.e. FARC, Sinaloa cartel) Banks (i.e. former Wachovia, HBSC)

P OLICY P ROPOSAL : Focus: Enforcement Sub-focus: international Why? The actions fall in the cracks between sovereign national law and international controls. 1 No credible estimates are available as to the volume of money laundering, or its distribution across countries and activities. 2 Final Thoughts & Conclusion