International Narcotics Control Strategy Report Volume II: Money Laundering and Financial Crimes [March 2008]   [open pdf - 5MB]

"This year's Volume II of the INCSR on Money Laundering highlights continuing threats and vulnerabilities posed by money laundering and terrorist financing to U.S. national security and to the stability of the global financial system. The 2008 Volume II also reflects the current and latest trends used by criminals and terrorists to launder, move, and store the fruits of their illicit activities. Some of these methodologies include: the continuing use of banks and money service businesses as gateways to the global financial system; bulk cash smuggling; trade-based money laundering and value transfer; legal entities such off-shore financial centers and international business centers; casinos and 'virtual' casinos; and new payment methods sometimes also identified as 'e-money.' Twenty-five years ago, the Department of State was mandated by Congress to examine the challenges and threats from narcotics-related money laundering. Although it is sometimes difficult to obtain data on money laundering systems and trends, via reporting reflected in this edition from our worldwide diplomatic posts and the domestic law enforcement and regulatory communities, we are able to glean increasingly greater insights. We can say with certainty that the use of offshore financial centers, casinos, and the Internet is demonstrably growing at alarming rates. Virtual money laundering is a reality and at this time is immune to traditional money laundering countermeasures. If ignored, 'virtual' money laundering will pose a threat to our financial sector. In the following section, we expand on one facet of the virtual threat: 'mobile payments.'"

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