What Is Money Laundering Commerce Essay


Money laundering, during the first 20 years of the 20th century in Chicago, the industrial center of the United States, there is an organized crime groups led by Al Capone. The criminal group set up large numbers of enterprises in order to obtain huge illegal profits. A Financial Officer in the criminal organizations, in order to disguise or conceal the illegal income, opened a laundry to provide customers laundry service, charge service fees. When he taxes at the tax authorities, he mixes the illegal income of the criminal organization and the legitimate income of laundry. The illegal income reported as legal income of the laundry, so that all future income tax has become a legitimate income, which will wash the "dirty money "cleaning. [1] 

Money laundering process:

Placement- the initial processing and handling that the criminals confused the proceeds of crime with other legitimate income.

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Layering- the process that the criminal cover the true source and the real ownership of the funds in order to cover up the illegal features of the funds.

Integration- Integration is to transfer the proceeds of crime or funds cleaned off to legitimate organization or individual account with no apparent relationship with the criminal organization or individual, thus completing the entire money laundering process. [2] 

Money laundering in the casino

In fact, casino is the most traditional money laundering sites. With a casino, nearly all the three processes of money laundering can be done. For the early Mafia's drug trade, they are mostly cash transactions; money is usually stained with white powder of the drugs. If caught by the police, it is difficult to be acquittal. So the Mafia members will carry the cash to casino and replaced cash to chips, once lost almost 30% of the total amount of money, they will take the rest of the chips and exchange for cash, of course the "dirty money" into "clean " income.

Even if you only have a very little knowledge about the gaming industry, you will know that it is a business that deals with a huge amount of cash. The casinos as a legitimate industry with large amounts of cash, usually offers a variety of services like a bank: the check to cash, foreign currency exchange, safe deposit available, and with Banker's Promissory Note to pay some large amount of money. They also often extend the use of bonds, which means that you can put your money in one casino of a casino gambling syndicates, and then take the money out from other casinos which may locate in another jurisdiction.

It is clear to see that for a recognized well organized casino, it will not only provide the casino gambling, but also has ability to provide a reliable source of income and the "function" of hidden funds.

The main gate of money-laundering is still the banks. The most crucial step of the Money-laundering activities is to make the bank believe that the proposed cash is obtained through legitimate sources. Revenue from legal gambling is legitimate income, and therefore the possibility that: criminals seek to disguise illicit cash into casino winnings and deposited to the bank. Therefore, the criminals can use the legal casino to do the money laundering.

The basic concept of the casino money laundering:

     In fact, the casinos, not only can do the money laundering, and, as a money laundering tool, it has "advantage" compared to other money-laundering channels:

     First, the casino business, it is all cash; not only the means of transaction in cash, and cash transactions the object itself. Casino not only accepting cash, and almost only accept cash. It is rarely to see gamblers bring checks or other financial instrument holding to gamble in casino. Casino money received almost one hundred percent in cash. So, if someone takes a huge amount of cash to the casino will not cause serious doubt.

     Second, all the gamblers' winnings in the casino are legitimate income.

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     Third, the gamblers' trading activities in the casino have no continuity and cumulative records. Different like depositors in the bank, every transaction are documented, under normal circumstances, gamblers usually have no "account" when they gamble in the casino. He has no record of all the cash transaction; through the analysis of a gambling casino it is difficult to found "suspicious transactions" from the customer transaction records.

     Fourth, there is no relationship between the amount of money bet at the casino and the amount of winning money. When a person holding millions of casino winnings to the bank and deposited the check, you cannot ask him how much is the capital he uses to win this money. All the millions of money could be won just by 1 dollar.

The prevention of money laundering in casinos: international Organizations and standards

Because of the hidden nature and the difficulty to investigate, the Casino money laundering has make many countries do not know how to deal with it. Which makes the casino money-laundering has been a near-anarchy field for many years. While countless committees and agencies trying to coordinate domestic law and policy and negotiation of international uniform standards, but no one have the power of enforcement. Nevertheless, the international community has begun to focus on combating money laundering in casinos, relevant organizations has found, conventions and legal documents related to casino money laundering attracting more and more countries and regions to participate.

   In the international anti-money laundering operations, the United Nations play an important role in actively promoting the anti-money laundering international cooperation. The United Nations proposed "United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances" in December 19, 1988 [3] , was the first Convention that the international community's use to combat money laundering, and later issued a series of legal documents, including legal model text to guide the countries to undertake anti-money laundering legislation.

In addition to the United Nations, a number of regional organizations and specialized anti-money laundering organizations also played an active role in the fight against money-laundering.

European Union- After June 1991, the Economic Community in Brussels, the Council of Ministers finally adopted, approved and promulgated the " Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering", has become "EU Money Laundering Directive".

Financial Action Task Force (FATF)- Financial Action Task Force (FATF) is an intergovernmental body whose purpose is to develop and promote policies at the national and international level to combat money laundering and terrorist financing. The Task Force was a "policy-making body" of the works to generate the necessary political will to achieve national legislative and regulatory reforms in these areas. [4] 

The Asia/Pacific Group on Money Laundering (APG)- The Asia/Pacific Group on Money Laundering (APG) is an international organization (regionally focused) consisting of 40 members and a number of international and regional observers including the United Nations, IMF, FATF, Asian Development Bank and World Bank

The APG is closely affiliated with the Financial Action Task Force (FATF), whose Secretariat is located in the OECD headquarters in Paris, France. All APG members commit to effectively implement the FATF's international standards for anti-money laundering and combating the financing of terrorism referred to as the 40+9 Recommendations. Part of this commitment includes implementing measures against terrorists listed by the United Nations in the "UNSC 1267 Consolidated List": The UN Security Council 1267 Committee Consolidated List - Al-Qaida, Usama bin Laden, & the Taliban etc.

Asia-Europe Meeting- ASEM Anti-Money Laundering project- was officially established in 1996 at the first summit in Bangkok. ASEM is an interregional forum which consists of the European Commission, the twenty-seven members of the European Union (EU).

Anti-money laundering project is the hold by United Kingdom Department for International Development (DFID) and the European Commission which aims to increase the Asia-Europe Meeting (ASME) members' capacity of anti-money laundering. When the project related to national needs assessment is completed, they will provide a number of countries technical assistance and training. The technical assistance and training of these countries may involve the following:

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The prevention of money laundering in casinos: application in Nevada, Australia and Singapore


International money laundering and thus can the casino should be incorporated anti-money laundering regulatory perspective of understanding, there is a process. 60s of last century, the U.S. government has already begun anti-money laundering legislation and the administration of justice, but until the mid-eighties, the United States was aware that the possibility of criminals using casino money laundering and passed "Control of Money Laundering Act" in 1986. It is the first time the casino is defined as" financial institutions" and list it in anti-money laundering regulation.

The birthplace of the modern gambling industry, Nevada, has the world's most mature and most representative of the casino anti-money laundering system. Its content can be roughly summarized as follows:

First, the cash transactions reporting system. Provisions of the Nevada gaming regulatory authorities, a gambler in the twenty-four hours of the cash transactions of more than ten thousand dollars, the casino has the responsibility to report the gambler's personal information and completing transactions a "Currency Transaction Report" to the government. Here the so-called "cash payment", including the purchase of chips, cash bet to win cash or casino chips in exchange for pay checks. Although the casino has no authority to act as financial police task for the government guilty of money laundering, but is obliged to report suspicious transactions to the government to review. Cash transaction reporting system is the core anti-money laundering regime of the Nevada casinos. [5] 

Second, prohibiting gamblers or other people engaged in more than 2,500 dollar amount of cash transactions in the casino. In Nevada casino, one currency for another currency exchange in cash, the amount of over 2500 U.S. dollars is illegal in the law.

Third, in addition to the check for the gambler's winning, the casino cannot issue a check which amount is bigger than 2500 US dollars. This one is to prevent collusion between the casino and the gamblers engaged in money laundering.

Fourthly, prohibiting a check with the title of a third party's name. Gamblers have no right to ask the casino to pay it with anyone's name written on the check.

Fifth, the multi-system transaction records. Gamblers in a range of activities in trading of more than 2,500 dollars, to record for total, to see the transaction within 24 hours of the total amount of more than ten thousand U.S. dollars. It is to prevent gamblers "shot for a place "to avoid cash transaction reporting system.

Gambling operators are reluctant to do these things, because it does not meet their own business interests. However, this is the law is no room for ambiguity. The Government of the state undercover gamblers sometimes to the casino and check whether these laws have been seriously implemented. Once a casino has no law-abiding, the punishment is extremely severe.


Australia is recognized as the world's most effective anti-money laundering system with the country. Meanwhile, Australia is the international money laundering organization where the Financial Action Task Force, the anti-money laundering activities, has a unique advantage.

In Australia, investigate cases of money laundering organizations are mainly the National Crime Authority, Australian Federal Police, Customs and Revenue Agency and so on. Australia, the prosecution is also a very important investigation of money laundering authority, whose function is to review the other organs of the transfer of the money-laundering cases, Bing to the Court.

Australian Transaction Reports Analysis Centre (AUSTRAC), in accordance with the 1988 "Financial Transactions Reporting Act" established, under the Australian Ministry of Justice. AUSTRAC operates with two important roles:

1. AUSTRAC oversees the compliance of Australian businesses, defined as 'reporting entities', with their requirements under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Financial Transaction Reports Act 1988.

These requirements include: implementing programs for identifying and monitoring customers and for managing the risks of money laundering and terrorism financing; reporting suspicious matters, threshold transactions and international funds transfer instructions; and submitting an annual compliance report.

AML/CTF Act obligations

2. In its intelligence role, AUSTRAC provides financial information to state, territory and Australian law enforcement, security, social justice and revenue agencies, and certain international counterparts.

The intelligence provided has been analyzed by highly qualified AUSTRAC personnel who use sophisticated tools to identify information that can assist AUSTRAC's partner agencies to investigate and prosecute criminal and terrorist enterprises in Australia and overseas. [6] 


As a new player in the Gaming industry, Singapore did quite well in the prevention of money laundering in casinos. And Singapore is currently a party to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances" in December 19, 1988

From a new [7] said at a news conference at the end of the 13th Annual Meeting of the Asia Pacific Group (APG) on money laundering we can find that there are nearly no money laundering detected in Singapore's casinos.

Ong Hian Sun, director, Commercial Affairs Department, Singapore Police Force, said: "So, if you talk about money laundering in the casino they are actually very well regulated, it's not so easy to launder the money. If anything, people will try to perhaps get round this S$10,000 threshold."

Singapore has also received recognition for the standards put in place by the Financial Action Task Force, an inter-governmental body which develops policies on money laundering and terrorists financing.

Mr Ong added: "We have achieved 43 largely compliant, as well as compliant ratings out of the 49 ratings. This is quite remarkable by any standards." [8] 

The Singapore authorities have measures in place that are necessary to prevent money being illegally siphoned in and out of the country. Every transaction above ten thousand dollars in the casino has to be reported to the government. Singapore's Casino Regulatory Authority was established two years ago to ensure that casino operations remain free from criminal influence.


As technology and market development, the Earth getting smaller, the scope of the international money laundering is also growing, so in the coming days for more knowledge of the international anti-money laundering is a very important and it is also very necessary to build a effectively anti money laundering system.


Necessary to introduce undercover

     In this case, I believe that "undercover" investigation means it is very necessary.

     In the United States, Nevada, Gaming Control Board (Gaming Control Board) of the officers can be disguised as ordinary gamblers at the casino secret investigation, if we see any violations, breach of the law can be punished. [9] But this is not allowed in Macau, "Macau Criminal Procedure Code," 113th article said that evidence obtained by means of deception is not valid and shall not be used. Therefore, the "undercover" is not currently allowed by the law of Macau.

     In fact, in addition to Nevada, the "undercover" investigative techniques were also adopted by many countries and regions. 2007, the China National Tourism Administration for Hong Kong's tourism industry has taken a special action, sending officers and media staff dressed as "mysterious quality supervisor, "implying the mainland and Hong Kong travel agency check. [10] 

     2004, the Legislative Council of Macao has six proposals call for evidence of crime prevention, special investigative techniques, but ultimately was not adopted [11] . The reason is mainly because people are worried about Macau has small population, staggered complex relationships, "undercover" may make the safety of investigators and their families threatened, people also worry about "undercover" may harm people's privacy Rights, leading to the power of the police thus become too large or abuse. I believes that "undercover" investigative techniques course, these problems, but we cannot because the one tree has poisonous and to destroy the entire forest, we do not always prohibit it, but how better to regulate it. For the Macao gambling industry, the use of "undercover" is conducive to regulate casino operations, to promote the healthy development of the gambling industry.

Alert the rise of money laundering in the online casinos

For the international anti money laundering, there are now some new challenges. The rise of online casinos offers the money launderers a more convenient way. It is quite simple to use a online casino to do the Money laundering: just open an account at a online casino website, import all the money from different sources to the account in the online casino, then the criminal just tell the gambling websites they want to cancel the account, and requires gambling website Check or bank draft on the account balance will be returned to them, the money laundering process is so easily done.

Compared to real life casinos, online gambling has become a "safe haven" for money laundering. Most gambling websites based in a "tax haven", the Caribbean region. Many sites not subject to government regulation, not compliance with international rules of the casino games; they would not even question the identity information of their customer. Many criminal groups put the dirty money in these accounts opened at the gambling website, generally bet on one or two, and then immediately notify the website "I do not want to play anymore" and require the website to return their own money in the account using a check with the name of the casino website. As a result, a huge amount of "dirty money" would easily "wash"! Preliminary estimates, each year through hundreds of gambling websites, there will be amount between 600 to 1500 billion U.S. dollars "dirty money " be washed.

For this new situation, the government needs to publish some legislation to make the operational of these websites canonicity. Also for the website itself needs to keep the record of the customers and have a duty to check the customer background information when they register at the website and keep checking annually.