Money laundering is an ongoing issue that governments, financial institutions, and businesses have to be wary of at all times. This financial crime has far-reaching effects, adversely influencing currencies, interest rates, and overall economic development. If you need to know about common anti money laundering problems, visit this website.

While many policies and practices exist to identify and prevent this crime, many common anti money laundering problems continue to present challenges.

The Birth of Money Laundering

The first recorded cases of money laundering occurred in the 1920s. The treasurer of Torrio-Capone Administrator Group initially came up with the idea. He saw laundering schemes as the perfect way to hide profit from illicit activities, and he was correct. The organization used early techniques to essentially turn dirty money into clean money, allowing them to use the ill-gotten gains as if it were perfectly legal.

Money laundering continued to prosper in the coming decades, creating a seedy underground financial system that undermined currencies and entire economies.

It wasn't until 1986 that money laundering officially became a crime. The United States was the first country to criminalize it, but others followed.

The Cornerstones of Money Laundering

At face value, this act is pretty simple. It starts by placing illegal funds into legitimate financial institutes. From there, organizations can spend it, transfer funds, and more.

Once a part of the more extensive financial system, illicit money can go through many layers of transactions. The more a criminal organization uses it, the murkier the true nature of the cash becomes. Before long, it looks like nothing more than operating cash flow or revenue.

Money Laundering Today

This criminal act hasn't gone anywhere. Businesses and governments established many policies to reduce it. However, money laundering still exists.

Many common anti money laundering problems revolve around its constant evolution. Our shift to digital technology opened the floodgates to financial crimes, and money laundering was no different.

It's an ongoing problem. Luckily, many companies are staying one step ahead. With robust identification verification processes and tons of great technology at the helm, organizations are getting much better at doing their due diligence and reporting suspicious behavior.

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