Combating money laundering and terrorist financing

Moustafa El-abdallah Al Kafry
2022 / 7 / 31

Money laundering takes place when someone engages in illegal economic activity´-or-gets money illegally, and then makes sure to clean up the money he has received, by engaging in legitimate economic operations not for profit, but often loses, the goal is to eventually come out of these operations and he has obtained funds that can be declared and shown clean washed legitimately. Thus, we find someone who buys a company´-or-factory, builds a housing project,´-or-otherwise with illegal funds, then sells the total´-or-partial of these projects and becomes a millionaire. Money-laundering is an economic phenomenon that we are beginning to observe as the internet is growing and suspicious messages are received from around the world.
Money-laundering is a process through which suspicious funds from illicit sources are legitimized (e.g. drug trafficking, arms trade, trafficking in women, smuggling and trafficking of antiquities, misappropriation of funds, tax evasion, evasion of customs duties and bribery). Money-laundering is therefore all conduct intended to conceal´-or-change the identity of funds linked to illegal operations, which are camouflaged for their real sources and to appear to be the result of legitimate operations.
Illicit funds:
Decree No. (33) issued in the Syrian Arab Republic in 2005 to combat money laundering and terrorist financing defined illicit funds as: funds obtained´-or-resulting from the commission of one of the following crimes, whether these crimes occurred in the territory of the Syrian Arab Republic´-or-abroad.
• Cultivation, manufacture, smuggling, transportation´-or-illicit trafficking of drugs´-or-psychotropic substances.
• Acts committed by evil associations under articles 325 and 326 of the Penal Code and all crimes internationally considered organized crimes.
• Terrorism offences under articles 304 and 305 of the Penal Code and in international, regional and bilateral conventions to which Syria is a party. þ
• Smuggling, manufacture´-or-illegal trafficking of firearms, parts, ammunition and explosives.
• Illegal transfer of migrants, piracy and kidnapping.
• Organized prostitution, trafficking in persons and children and illegal trafficking of human organs.
• Theft, smuggling´-or-illicit trafficking of nuclear, chemical, bacterial´-or-toxic substances.
• Theft and misappropriation´-or-seizure of public´-or-private funds by means of robbery, robbery, fraudulent means´-or-illegal transfer through computer systems.
• Counterfeiting currency, other means of payment, public attribution, valuable papers, documents and official instruments.
• Theft´-or-illicit trafficking of cultural relics´-or-property. Bribery and extortion offences.
• Smuggling offences.
• Use of trademarks registered by non-owners´-or-falsification of intellectual property rights.
Stages of money laundering:
Money laundering goes through three stages:
1. Placement, i.e. the introduction of suspicious money into the legal financial system.
2. Cover´-or-concealment (layering) i.e. transfer and exchange of suspicious (-dir-ty´-or-illegal) money within the financial system in which it was introduced.
3. Integration, i.e. the final integration of money with legitimate funds to ensure that the illicit source obtained is concealed.
Those who are used as intermediaries in the suspicious money laundering process:
Those used as intermediaries in suspicious money laundering are:
• Financial institutions (savings institutions, banks),
• Brokers,
• speculative companies,
• The money changers,
• Casinos
• Retail stores and service delivery,
• Legally covered companies,
• Non-bank financial institutions (bureaux and exchange shops),
• Travel and tourism agencies,
• Import and export agencies,
• Entities with cash-related activities (car and heavy equipment market),
• External financial services agencies (external remittances )
• Charities.
The methods used in the suspicious money-laundering process are to deposit suspicious funds in the above-mentioned institutions and entities with a view to -convert-ing them into legitimate and clean funds.
Indicators of money laundering include:
Composition and fragmentation: dividing the large amounts from illegal acts into small amounts to keep a low profile´-or-inform the competent authorities.
Collusion: Employees of institutions´-or-entities used as intermediaries in suspicious money laundering facilitate the acceptance of deposits without applying the procedures governing it, such as filling out filing forms, filling out transfer forms´-or-reporting suspicious transactions.
Offences that produce illegal funds and need to be laundered are punishable by law, and the penalty extends to confiscation, fines and imprisonment. Money-laundering must be criminalized and criminalized. In other words, the legal rule was that whoever steals and hides the stolen money is punishable by the act of theft and I do not have to hide the stolen money. Those who embezzle and invest what they have embezzled are punishable by embezzlement and confiscation of money, but without penalty for investing´-or-hiding money. Smuggling, organized crime, the slave trade and drug trafficking must be considered by legal systems to support money laundering offences.
Committing the offence of money laundering:
Based on the Decree against Money Laundering and Financing of Syrian Terrorism, it is an offence of money laundering that is intended to:
• Hide the true source of illicit funds by any means´-or-give false justification to this source.
• Transfer´-or-replacement of funds with the perpetrator s knowledge that they are illegal funds for the purpose of concealing´-or-disguising their source´-or-helping a person involved in the commission of the offence escape liability.
• Own, acquire, manage, invest´-or-use illicit funds to purchase movable´-or-immovable funds´-or-to carry out financial operations with the perpetrator s knowledge that they are illegal funds.

Penalties for money laundering:
Article 14 specifies penalties for anyone who has committed, intervened´-or-participated in money laundering as follows:
A temporary detention of three to six years is punishable by a fine equivalent to the value of the seized funds´-or-a fine equivalent to its value if it cannot be seized, but not less than 1 million Syrian pounds, anyone who has committed, intervened´-or-participated in illegal money laundering resulting from one of the crimes mentioned in article 1 of the Legislative Decree knows that it is the result of unlawful acts unless the act is punishable by a harsher penalty and this punishment is severed in accordance with the provisions of article 1 of the Legislative Decree. 247 of the General Penal Code if the offence is committed in the context of an organized criminal gang and is also punished according to the above who has committed, intervened´-or-participated in terrorist financing operations. The attempted crime of illegal money-laundering and the crime of financing terrorism are punishable, and the partner, interventionist, instigator and concealer shall be punishable by the original perpetrator.
The international body leading the world s anti-money laundering efforts has adopted new rules to tighten the crackdown on -dir-ty money, terrorist financing and money laundering, banning unregulant banks and tightening controls on casino businesses. The new rules are aimed at tightening procedures for reviewing financial records and customer history, particularly in high-risk businesses such as correspondent banks´-or-dealing with people with questionable political backgrounds. Gambling clubs, real estate brokers, precious metal dealers, gemstones, accountants and lawyers will now be subject to surveillance to ensure that they do not launder money. It is estimated that between -$-700 billion and -$-1,500 billion is laundered annually.
Because of the economic, social and political risks resulting from money-laundering, international efforts, global´-or-regional conventions against money laundering and the United Nations Convention against Illicit Trafficking are growing. Such as imposing international best practices with regard to the illegal transfer of funds through so-called "secret banks", Internet cafes, tourism companies and import and export companies, which are key channels by which "extremists" transfer their money.
Prof. Dr. Moustafa El-Abdallah Al Kafry
Faculty of Economics - Damascus University

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