Money Laundering

QUESTION 1

Money Laundering

In this new millennium, problem associated with money laundering is becoming a serious issue worldwide. Governments across the globe are putting their effort in combating money laundering activities, and for this particular report, two countries will be discussed in regard to this issue. Those countries are Australia and Malaysia. Both countries had enacted legislation on preventing money laundering scheme. However, the process of money laundering had evolved in tandem with the technological advancement where most of the transactions are being done through the Internet. This is seen as a real challenge for governments to curb the problem to ensure that the problem is not worsening.

Before the report goes in depth, it is essential to define first what money laundering is. In a simple term, money laundering is to ‘legalize’ the money that sourced from illegal activities. These illegal activities include drug trafficking, illegal firearms trading, human trafficking and terrorist organizations. Money laundering is a method used by criminals and wrong-doers to launder the money that come from illegal activities. The motive of this conduct is to make the money looks like it came from legal sources and the other reason is to conceal their criminal activities so that the money cannot be tracked back to them. Money laundering could actually create a negative impact on the several perspectives such as economic, social and national securities.

Australia is one of the countries that have a significant money laundering problems, and for Malaysia, the problem of money laundering is not as significant as its counterpart. A G-7 Summit held in 1989 had established Financial Action Task Force (FATF) in response to the concern of money laundering. FATF produced 40 recommendations for all country in fighting and preventing money laundering. In conjunction of anti money laundering activities, Australia had enacted the Proceeds of Crime Act in 1987...