Extract from the section on Money Laundering
Money laundering and criminal finance
Most, but not all, serious and organised criminal activity is aimed, directly or indirectly, at making money. Criminal proceeds are reinvested in further illicit enterprise, used to fund lavish lifestyles or to accumulate wealth and assets.
Assessment of the scale
Many hundreds of billions of pounds of international criminal money is almost certainly laundered through UK banks, including their subsidiaries, each year. The high transaction volume (estimated at trillions of pounds a day), language, developed financial services industry, and political stability of the UK make our financial system particularly attractive to money laundering despite the measures to identify and stop it.
Most proceeds of UK serious and organised crime are laundered through UK banks, wire transfer companies and other regulated businesses including Money Service Businesses (MSBs) and cash-rich businesses. A large proportion is sent abroad where profits are often ultimately invested in real estate.Importantly, a proportion is re-invested into criminal activity in various stages of any serious and organised criminal venture.
Money laundering techniques often involve offshore transfers and investment to disguise the criminal origins and asset ownership. Many criminals rely on professional enablers such as businesses that register and run ‘shell’ companies and trusts in numerous ‘off shore’ areas.
Illicit profits are often laundered through cash rich businesses. Complicit, negligent or unwitting professionals in financial, legal and accountancy professionals in the UK facilitate money laundering. Specialist money launderers, some overseas, manage laundering for multiple criminal enterprises.Virtual banks and virtual currencies are being used by some criminals, particularly those engaged in particular types of crime such as trading online fraud tools. We assess that the criminal use of these at present largely unregulated financial services is likely to increase, but most money laundering will still take place through banks and other regulated businesses.
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