Many governments, financial institutions, and businesses impose controls to prevent money laundering. The first is criminalization by the government. The United Nations Convention Against Transnational Organized Crime has set forth guidelines that help governments to prosecute individuals involved in money laundering schemes.
What are the consequences of money laundering?
A change in demand for cash by money laundering can completely erode a nation’s economy. It may cause volatility in interest and exchange rates and high inflation rates. It fuels corruption and organized crime and can result in disastrous social consequences. Money laundering is used to create shadow economies.
What is money laundering?
Money laundering can be defined as some window dressing that is done to the ‘money’, to make it appear as if it was legitimately earned. It is to ensure that illegally earned money (Or even black money) looks white and pure and looks legitimately earned. It is done with some tweaks to prevent any issues that might happen in any future transactions.
