Finances are considered to be illicit if their capital flight is considered to be illegal; that is if money is earned, utilized or transferred through the illegal ways. These finances do not exist in any national records of the country of origin thus all the profits on the stock of the illicit operations are not beneficial to the motherland but flow to the outside nations. The flow can be generated through various illegal routes such as mispricing, smuggling and balk cash movements among the others. This has captured the attention of government systems of almost all nations with the struggle of handling the unlawful operations. The study considers how the other nations beside United State encounter this issue.
With the increased in illicit financial operations resulting to raise in the crime rates such as drug trafficking nations like United Kingdom are struggling hard to handle the problem.
Counter illicit finance
Money laundering is considered as the most profitable criminal enterprise in the current world. Based on the international statistics of monetary fund, Lilley Peter estimates that the business makes as much as $2 trillion per year. The operations have initially been considered to be related with the narcotics trade or internationally planned crime, its role is slowly turning to terrorism financing. The process begun long ago when the criminal organizations used to pass their money through front businesses which included car washes and Laundromats. With the evolution of the financial world into cyberspace, the money laundering process rapidly evolved to a more complicated problem. In the present world, the criminals consider all activities or any transaction to make money.
The Money Laundering Regulations 2007 in United Kingdom require all the firms to consider the policies, systems and procedures so as to prevent the dangerous money laundering process or terrorist financing. It is the requirement of any regulated business to apply the enhanced diligence of the customer and the monitoring of the risk sensitive issues in the situations that present higher risk of the laundering of money and terrorism financing.
To handle issues relating to the illicit finances, the United Kingdom highly supports Financial Action Task Force which is concern about the financial activities. It gives regulations on matters pertaining the financial operations; for example, the organization calls on its members to and the other subjects to consider measures which prevents the International financial system from money laundering and terrorism financing.
The business regulations in Iran under the Money laundering regulations 2007, requires that all the institutions related with financial operations in Iran. This requires an increased scrutiny and regular monitoring the ongoing activities particularly in the issues concerning the relationship of the correspondent. The Financial Service Authority authorizes some people to consider their regulations and try to implement them for the control or minimization of counter financial crimes.
In the Republic of Korea, people are encouraged to put into consideration the regulations of the Financial Action Task Force (FATF) against the illegal financial operations for the prevention of the occurrence of risks. They should look into these for the protection of their financial system from financial crime and take the most appropriate actions to reduce the occurrence of the risks.
FATF also makes changes in all the processes for the improvement of the world based anti-money laundering and encountering terrorist finance. The organization draws attention to deficiencies in Bangladesh, Antigua, Angola, Ethiopia, Ghana and many others. The attention of the financial institutions of United Kingdom on the processes of money laundering is related to the Mutual Evaluation Report of Argentina and the summary of the chairman of FATF.
The relationship between money laundering and terrorist financing is that the funds which are used to support terrorism operations originates from criminal activities or legitimate. Finishing the sources of finances for the terroristic operations is thus important as an effort to minimize the issue. Therefore the FATF recommends that each nation should criminalize those who are perceived to be financing a terroristic operation or terrorist organization and term the offenses as money laundering offense. All regulations and recommendations of FATF on money laundering are essential in detection, prevention and suppression of the operations mo9ney laundering and financing of terrorism.
The efforts of all the nations in fighting financing of terrorism requires that the systems expand their anti-money laundering frameworks for the inclusion of the organizations which are considered to be non-profit making to ensure that they are not misused in the financing of terroristic operations. Because of the fear of law most of the criminals are considering the legitimate sources like donations and gifts from charitable organizations to finance their operations instead of engaging with illegal operations such as drug trafficking. This therefore is becoming the concern of most of the legal systems that all the operations of the non-profit making organizations and the others should be well monitored and makes it a recommendation that they should seek governmental approval before setting an agreement.
Money laundering and terrorism financing are secret operations whose profits and losses are never documented or published. Therefore much effort is required for those investigating on them to be aggressive so as to get the idea. The operators base their activities across the boundaries to conceal their illegal operations by taking advantages of the differing regimes of anti-money laundering thus their operations are somehow legal in some systems.
Illicit financial operations although not published or run openly in the market are common in all nations. Like United States the other nations like United Kingdom are also concern about the ways of encountering the illegal operations.