Effects Of Money Laundering On The Economy - Free Essay Example

Sample details Pages: 6 Words: 1823 Downloads: 5 Date added: 2017/06/26 Category Economics Essay Type Cause and effect essay Did you like this example? The purpose of the study concerned the impact of money laundering and its effects on the local economic and method of laundering technique in Mauritius. Money Laundering is very vast in nature; it consists of various steps, technique and approach of undertaking such unlawful activity. The research analyzes the economic effects of Money laundering in the Mauritian Economic. Don’t waste time! Our writers will create an original "Effects Of Money Laundering On The Economy" essay for you Create order The research work will attempt to examine the money laundering activities and the usefulness of prevention and detection techniques by local companies. The method that is to be used is mainly studying available research papers so that we get a maximum of information. The purpose of this study is to provide the general public a broad idea on money laundering with some existed solutions. The research will be in the main interest of financial institution, Government and General Public. 2.0 Literature Review 2.1 What is Money Laundering? Money laundering is the process by which money is obtained illegally. Various types of frauds corruption, cooking the books, involve money which has been preceded by several criminal acts. Individual or groups make illegal gains by carrying out these criminal acts and often swindle high amounts. Money laundering makes it possible to legitimate ill-gotten gains through computer crimes, insider trading, and bribery where these produce large amounts of profits. Money laundering takes place within all types of profit-motivated crime, such as embezzlement, fraud, misappropriation, corruption, robbery, distribution of narcotic drugs, and trafficking in human beings (ÃÆ'ËÅ"kokrim, 2008). 2.2 Characteristics of Money Laundering Money Laundering consists of a series of various transactions used to change the source of financial assets so as these assets can be used without compromising the criminalà ¢Ã¢â€š ¬Ã¢â€ž ¢s offences. These transactions involve 3 stages (Billy Steel, Money Laundering Stages of the Process): 2.2.1 Placement The first stage refers to the physical distribution of financial assets. It is the most dangerous one for the perpetuators as the money from illicit activities are introduces into the financial system. Money laundering is a à ¢Ã¢â€š ¬Ã‹Å"cash intensiveà ¢Ã¢â€š ¬Ã¢â€ž ¢ business generating huge amount of cash from unlawful activities (for example street drug dealing, where payment are made in cash). The proceeds are then place into financial institutions, in the retail economy or deposits out of the country. The principal aim of the launder is to deliberately remove the cash from the location of acquisition and to convert it into other assets so as to prevent detection from authorities. 2.2.2 Layering Layering involves creating complex layers of financial transaction designed to cover audit tails and provide secrecy. The first attempt is to disguise the origin and ownership of the funds by creating complex layers of transaction. The idea of the transaction is to disassociate the illegal funds to the source of the offence. Layering is the second stage, in which the funds are moved so as to veil or remove any whatsoever link from the crime committed to obtain the money. During the layering process, a number of accounts, financial institutions, companies, funds as well as the use of professionals such as brokers, lawyers and consultants as intermediaries could be involved   as this is where the money will be channeled. Assets that are bought through unlawful funds can be resold locally or abroad and as a result, the assets become more difficult to map out and seize. 2.2.3 Integration The final stage consists of the integration of the money in the legitimate economic and financial institution. Integration is the stage whereby takes place the creation of a legitimate basis for the asset origin. The launder make the money appear legally earned and à ¢Ã¢â€š ¬Ã‹Å"cleanedà ¢Ã¢â€š ¬Ã¢â€ž ¢. At this stage it is very difficult to distinguish by authorities the difference between legal and illegal wealth. The money is viewed as being legal, and the criminal can use it for any purpose. Illicit money is often removed from its country of origin to be cycled through the international payment system so as to blur any audit trait (Joyce, 2005). There are different ways in which the third stage of money laundering is done. For example, a credit card might be handed out by offshore banks, casino à ¢Ã¢â€š ¬Ã…“winningà ¢Ã¢â€š ¬? can be cashed out, capital gains on option, and stock trading might follow, and real estate sale might lead to profit. The proceeds of criminal a cts could be generated from organized crime such as drug trafficking, people smuggling, people trafficking, proceeds from robberies or money acquired by embezzlement, tax evasion, fraud, abuse of company structures, insider trading, or corruption. Popular Methods of the launders at this part of the game is Sending fake import à ¢Ã¢â€š ¬Ã¢â‚¬Å" export invoices and overvaluing the price of the goods. Consequently in allows the launders to more the funds from one company or country to another with the invoices serving as source of the capital place with financial companies. A simpler technique is to shift the money (via EFT) to a rightful bank from a bank owned by the launderers, as à ¢Ã¢â€š ¬Ã‹Å"off the shelf banksà ¢Ã¢â€š ¬Ã¢â€ž ¢ are easily purchased in many tax havens. The establishment of unspecified company in countries where the right to concealment is guaranteed. In such case the launderer is in a position to grant loans from banks to undertake certain future leg al transaction. In addition launders can claim tax relief on loan repayments and interest on loan so as to increase their profits. Most criminal acts are motivated by profit, argues Financial Intelligence Unit (2008). When substantial profits are generated from crime, perpetrators have to devise a means to control the assets in such a way that they do not attract attention to themselves or the crime committed. Thus, the money laundering process is crucial in order to enjoy the profit without arousing suspicion. 2.3 Problem statement: 2.3.1 Banking Secrecy: A major drawback of money laundering Banking secrecy is a professional obligation, meaning that financial institutions shall not expose a customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial information and they even have the right to resist any third partyà ¢Ã¢â€š ¬Ã¢â€ž ¢s enquiries in order to protect the customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s wellbeing. Secrecy laws have served to safeguard persons from financial failure in countries plagued by unsteadiness, fragile currency and run-away inflation rate. Wealthy individuals and political agents are also protected by allowing them to hide their possessions to avoid the risk of persecution (Savona, E.U, 1997). In some countries, for example in Switzerland, the revelation of secret banking information is punishable by law, whether it is intentional or unintentional (Corrado, M.G, 1988). In the world we are presently living, nobody can deny the fact that banking secrecy is the most significant weapon for money launderers. Some countries like Hong Kong, Switzerland, Panama are even known as notorious à ¢Ã¢â€š ¬Ã‹Å"banking secrecy heavensà ¢Ã¢â€š ¬Ã¢â€ž ¢. These jurisdictions really make the crime of money laundering more severe and out of control. For instance in Hong Kong, a new regulation was introduced in 2000 which requires banks to report suspicious transactions. This resulted in 6,100 suspicious transactions being reported in 2000 and 95% of them were from banks (www.hongkong.org/press/ny-021400.htm, 15th Aug 2001) 2.4 Combating Money Laundering: The Lifting of Banking Secrecy Despite being an important part of individual privacy, banking secrecy has to be lifted in some cases as it is equally important to fight against money laundering in order to guarantee a protected and safe society. The lifting of bank secrecy has already been embodied in the most vital international documents. Each party should authorize the court or other authority to order that financial or business reports should be made accessible or be seized under the 1988 Vienna UN Convention, the 1990 Strasbourg Convention and the 2000 Palermo US Convention specifically (United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Art.5(3), 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, Art.4(1), United Nations Convention against Transnational Organized Crime, Art.12(6)). The FATF recommended that financial institutions should concentrate on all unusual or large transactions, which have no evident economic or lawful purpose. Such transactions should be examined, written and be made available to supervisors, auditors and law enforcement agencies. If financial institutions doubt that proceeds come from a criminal activity, they are required to account for their suspicions to the expert authorities without delay (The FATF Recommendations on Money Laundering, 1996 Art 14, 15). These measures are innovative, modern and extremely different from the conventional banking system. In early times, the relationship between financial institutions and customers were founded on trust and confidence: neither the banker asked questions nor the customers made disclosures. The situation has now changed. Along with that, the way of thinking and attitude of bank directors, staff and that of management authorities have changed (Galvao G, 1997). 3.0 Research Methodology 3.1 Aims and Objective of the research The aim of the research is to identify evidence of banking secrecy and their effectiveness in combating money laundering. Cases of money laundering in Mauritius will be studied and analysed. Key principles from the anti-money laundering act and from regulations imposed by bank regulators (e.g. Financial Services Commission and the Bank of Mauritius) will be outlined. The study will then research on the measures taken by banks to fight against potential cases of money laundering in order to guarantee a protected and safe banking service. The lifting of bank secrecy has already been embodied in the most vital international documents. The objectives of this research are to: 3.2 Research Method A survey with a self-administered questionnaire will be the data collection technique used. The questionnaires will be sent to the senior managers, executives and branch managers of the identified banks in Mauritius. Visits to the company/meeting with the relevant person will be carried out where necessary to ensure maximum response and that questionnaire is being filled up by the addressee. Also, secondary data will be taken from company websites, reports and financial statement to supplement research. 3.3 Statistical Analysis of data After the questionnaire, the response will be input as data so as to make use of specific statistical technique. Thus SPSS statistical package will be used to analyze data for the findings of the research. 3.4 Benefits of the Research The research will be beneficial to: Companies Government Future Research Dissertations 3.4.1 Companies Combating money laundering will have a positive impact on companies: Through integrated management of financial crime operational efficiencies will improve The risk of corruption, identity crime and other criminal crimes will reduced considerably Reduced financial risk, reputational risk and legal risk Bad debts and fraud losses due to customer comprehensiveness 3.4.2 Government Money laundering has a negative effect on the economy, such as loss of control on the economical policy, economic distortion and instability. Moreover, government loss revenue as tax collection becomes more complicated and confusing. Therefore, the research will help to reduce these drawbacks. 3.4.3 Further Research Research will assist other researchers to make further research in the topic. Ghantt Chart Task/activity Mar Apr May Jun Jul Aug Sep Oct Choose topic à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · Literature search à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · Developing framework à ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ · Design questionnaire à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ · Survey à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · Data Input à ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ · Analysis à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ · Writing up à ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒ ¯Ã¢â‚¬Å¡Ã‚ · Submit à ¯Ã¢â‚¬Å¡Ã‚ · Budget Analysis Expenditures Rs Consultants and contracts 1400 Travel 400 Supplies and materials 400 Communications (Telephone, postage, etc.) 150 Equipment (Purchase) 700 Other (Equipment rental, etc.) 400 Total 3450

Leadership Personal Action Plan For A Successful Leader

Brittany R. Norman November 29, 2015 MGMT 500 Leadership Personal Action Plan Effective leadership is about stimulating growth and development in your teams and also in the people around you. In order to achieve the aforementioned, a leader must have a plan of action to become successful. This paper will allow me to highlight and reflect upon my personal strengths and challenges as a leader and also describe my plan to leverage those strengths. Additionally, I will be able to identify ways to improve my leadership skills. Lastly, this plan of action will provide details of a timeline of the applicable steps that I will take to ensure I become a successful leader. An efficient leader should be able to utilize his or her strengths to†¦show more content†¦According to Baldwin, Chapter 11, page 379, â€Å"Managers do not have to have the solution to every conflict. They should, however, be capable of diagnosing conflict and facilitating resolutions and agreements.† While leading my team, I plan to have an open-door policy which will lead to open an d honest relationships. This will also create an environment that allows my team to trust me in guiding in finding solutions to their issues. Being well organized is another strength of mine. Organization is a very important aspect of being a great leader. For me, it is easier to accomplish tasks when I have a to-do list. Having a list allows me to keep order throughout my day and also allows me to prioritize assignments. My employees will be able to look to me to provide guidance on work that needs to be completed on a daily, weekly, and monthly basis. I will provide them with agendas for meetings, due dates for assignments, and establish personal goals. Being organized will keep the team on tasks and prevent them from falling behind. 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What Have You Found Interesting About Churchill’s Use Of Language In The Following Extract Free Essays

The extract I have chosen to analyse is from the Methuen book, Top Girls, page 111 (When Mrs.Kidd enters) through until when she leaves towards the end of page 112. During this extract the audience is exposed to two major differing social classes. We will write a custom essay sample on What Have You Found Interesting About Churchill’s Use Of Language In The Following Extract or any similar topic only for you Order Now Mrs.Kidd is a vast contrast to Marlene, as she is very well spoken, whereas Marlene’s language is a little less appropriate for the workplace. It is obvious that the two characters are of differing social classes, due to their names. Mrs.Kidd is the only person in the play given a surname, and her forename is Rosemary, which illustrates a middle class background. Marlene, on the contrary is a name more associated with working class backgrounds, as shown in a hit television series called, â€Å"Only Fools and Horses† in which a woman of working class background is represented. I think that the two woman represent the two main social groups of the nineteen eighties England, one a middle class housewife completely supportive of her husband and traditionalist views on ‘a woman’s place’ in society, and the other a working class career woman who has made her own way to success, without the aid of a man, she is in Mrs.Kidd’s eyes anyway, â€Å"†¦one of those ball breakers/†¦Ã¢â‚¬  Mrs.Kidd’s intentions are unclear to Marlene until she comes straight with it, she says to Marlene, â€Å"The fact is he’s in a state of shock. About what’s happened.† Marlene is surprised and doesn’t understand what she means, until she explains exactly what she means, â€Å"I’m referring to you being appointed director instead of Howard.† Marlene replies to Howard’s sleeping problems with sarcasm, â€Å"Has he thought of taking sleeping pills.† I think that Churchill implies that Marlene doesn’t really care and that it isn’t her problem. Mrs.Kidd then goes on to say that Howard deserved the job, because he’d, â€Å"†¦worked all these years.† Experience, however isn’t as important in the modern era of work, when qualifications bear more significance on a job application than experience. Marlene refers to this as one of business’ ‘little setbacks’. I think that Churchill attempts to make this line into a very poignant moment, as Marlene herself had a setback in the form of her daughter, Angie, whom she gave up to her elder sister, which enabled her to bounce back. I think that the poignancy would be lost as the conversation would be acted at a furious pace and the audience wouldn’t have sufficient time to react and sympathise with Marlene. Marlene takes a very professional approach to the conversation, using formal language and keeping her cool throughout the conversation, and ensures that Mrs.Kidd lowers the tone, so that she cannot be reprimanded by her senior colleagues, for dealing with the situation incorrectly. Mrs.Kidd comes across as being very discriminatory towards her own sex, when she says, â€Å"What’s it going to do to him working for a woman?† This question implies that Mrs.Kidd doesn’t believe in equality in the workplace and again reinforces her middle class traditionalistic views on a woman’s place in society. Marlene’s reply is a controlled sign of her frustration at Mrs.Kidd’s ignorance towards the state of the modern workplace. I think that Mrs.Kidd’s next lines show that Churchill doesn’t wish to show her as an individual, but more as a part or possession of her husband, Howard. Marlene sympathises with Howard, saying that she’ll be tactful and pleasant, but for Mrs.Kidd, this isn’t enough, she takes it too far by saying, â€Å"I think it is different, because he’s a man.† I think that this bold statement enrages Marlene, but she manages to bottle up her emotions. I think this is also used by Churchill to display to the audience Mrs.Kidd’s naivety to the modern workplace. Marlene appears beleaguered in her response, â€Å"I’m not quite sure why you came to see me.† As she feels that Mrs.Kidd has not achieved anything positive and has merely made a fool of herself and her husband. Mrs.Kidd appears to have realised that she hasn’t achieved anything, and is almost giving up, when she says, â€Å"I had to do something.† I think that Marlene attempts to sympathise with Mrs.Kidd, when she says, â€Å"I’m sorry he’s taking it out on you. He really is a shit, Howard.† Because she uses derogatory language towards him, I think she is blaming Howard and trying to tell Mrs.Kidd that it isn’t her problem entirely, and that Howard needs to deal with his own problems. Mrs.Kidd then tries to deploy another weapon, emotional blackmail, she says, â€Å"But he’s got a family to support.† Implying that they need the money more than Marlene, who is a single woman. Then she suggests that Marlene gives up the job, saying, â€Å"It’s only fair.† I think this inference sends Marlene into a state of shock as she replies, â€Å"Are you suggesting I give up the job to him then?† Mrs.Kidd thinks that Marlene has finally taken heed of what she has said and that she has succeeded in her quest to gain her husband the job. Marlene becomes confrontational and has no time for Mrs.Kidd, when Mrs.Kidd says, â€Å"I’m not asking.† Even though she blatantly is, to which Marlene replies sarcastically and goes on to tell her that, â€Å"If he doesn’t like what’s happening here he can go and work somewhere else.† Mrs.Kidd now becomes enraged and starts hurling abuse at Marlene, but the language has no effect on Marlene, who eventually says, â€Å"Could you please piss off.† Although this is abusive, I think that Churchill wants it to have the effect of displaying to the audience that Marlene is in control of the situation and is very calm and calculating in her response. I think that this scene bears great significance on the play as it displays Marlene’s professionalism and ability to cope with the workplace and problems. The extract also illustrates intentions of satirizing the middle class of the time and the Thatcherists, like Marlene. 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