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:: Money Laundering  

Since it was coined to describe the notoriously sneaky activities of the entrepreneur criminal syndicates that mushroomed in the early part of the twentieth century in the United States (US), the term ‘money laundering’ has established itself in criminal justice systems all over the world. It is therefore often assumed that there is consensus over its definition and the meaning of concepts such as ‘dirty money,’ ‘illicit transaction’ and ‘legitimate assets’.

The primary objective of the laundering process, it is often asserted, is to convert money derived from an illicit transaction, which is therefore ‘dirty,’ into some other legitimate asset, thereby concealing the predicate transaction. 2 International law has therefore urged governments to criminalise the money conversion (laundering) process. Countries are required to penalise the laundering of funds derived from activities that happen within their territory, as well as funds originating from beyond their borders. In addition, attention should be paid to proceeds generated by local crime and transmitted to foreign countries. In fact, several grey areas continue to afflict the criminalisation of money laundering around the world. Uncertainty is centered around the lack of uniformity on what predicate transactions are illicit, with the exception of activities recognised by international criminal law, such as drug trafficking. Controversy about whether the basic transaction from which money was derived was unlawful or criminal stifles the transnational enforcement of criminal law. It is easier to describe money laundering than to define it. Money laundering comprises: all activities to disguise or conceal the nature or source of, or entitlement to money or property that has been acquired from serious economic crime. 3 Through legislation, some countries have extended money laundering to include the fruits of activities besides serious crime. Others have decided to designate a list of activities and confine the definition to proceeds of those activities.

Following the well-publicised atrocities in New York on 11 September 2001, there is growing pressure from Western countries to expand the concept of money laundering to include dealings in money or property that is intended to be used in committing terrorism, or to facilitate the commission of terrorism.If successful, thiswill shift thefocus to the intended use of resources whose source may be legal. Increased efforts to combat money laundering recognise the link between money laundering and serious crime. Successful money laundering activities not only enrich criminals but also assist in funding more serious criminal activity. Money laundering is said to be closely linked to economic crimes, such as fraud, bribery, corruption, exchange control violations and tax evasion and even to international terrorism. As an activity located within the economic environment, money laundering often has to use mechanisms that are intended to serve the lawful economy. It may therefore be classified as economic activity.

Money Laundering in Southern Africa

It is fair to say that there is a common aversion to money laundering in Southern Africa. At least 12 of the 14 member states of the Southern African Development Community (SADC) have committed themselves, through the Eastern and Southern Africa Anti-Money Laundering Group of countries (ESAAMLG), to take effective measures against money laundering. The two exceptions are Angola and the Democratic Republic of the Congo (DRC). Controversy persists, however, on the range of predicate activities for money laundering. Part of the reason is that, while there may be agreement regarding nomination of predicate offences, no regional criminal law exists.

As is the case at the global level, the rate of development of common criminal law is generally slow. Progress has been relatively rapid in respect of drug trafficking but lethargic regarding corruption, economic crime and terrorism. Instruments such as the SADC Protocol Against Corruption have been brought into existence in order to precipitate a convergence of the criminal law against corruption, but the level of domestication is uneven. The United Nations Convention Against Transnational Organized Crime (the Palermo Convention, 2000) requires member states to establish: a comprehensive domestic regulatory and supervisory regime for banks and non-bank financial institutions and, where appropriate, other bodies particularly susceptible to money-laundering, within its competence, in order to deter and detect all forms of money-laundering... 4 This regime should emphasise requirements for customer identification, recordkeeping and the reporting of suspicious transactions.


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