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Strategies & Market Trends : Scamthony Cataldo -- Ignore unavailable to you. Want to Upgrade?

To: scion who wrote (22)	1/14/2004 4:37:11 PM
From: scion	Read Replies (1) \| Respond to of 137

34 International Affairs Review that transfer money out of Russia and into a number of international accounts. Next, this article reviews the major international agreements related to money laundering. Finally, the article concludes that the current multilateral efforts to curb money laundering, if intended to deal with situations such as the Bank of New York scandal, have been misdirected and offers a proposal for working with current international organizations to refocus the issue. Normal capital flight transactions take place in countries with economic instability and fluctuating currency rates. In Russia, however, it is difficult to distinguish capital flight from money laundering. Although the transactions described here are due mainly to corruption and fraud, it is impossible to identify the original source of these funds. The literature refers to misspent IMF funds, the laundering of money for Latin American drug trades through Russia, and other possible sources. However, no studies have accounted for specific amounts. Since the banks do not discriminate as to the source (e.g. they lack the typical Western “know your customer” laws) the capital flight funds and money laundering are intermingled. Although most of the literature on money laundering tries to identify what is “dirty” money (that which originates in illegal transactions) and what is “capital flight,” this distinction in the Russian context is difficult to distinguish in theory, and impossible to identify in practice. The literature on money laundering is just as vague. While there is widespread recognition that virtually any form of financial or real asset transfer can be used for laundering, there are different views about what forms of “illegal” activities should be used for international anti-laundering efforts.1 Some estimates include activities such as tax evasion, while others focus on harder criminal activities.2 Non-academic sources rarely identify which sources are included in estimates. However, there is no conceptual difference among money laundering transactions, underground, parallel, or hidden economies -- they all refer to concealed income through outside parties and transactions, and are the focus of this article.3 RussiaAsASourceofFunds Russia is the source of billions of dollars sent to foreign accounts each year for involvement in money laundering schemes.4 These large sums of laundering funds distort asset prices, interest rates, and exchange rates and contribute to instability in domestic economies.5 Three general categories of these transactions serve as examples: exporters arranging for outside payment, the practice of tolling, and bogus trade deals. The common motive is tax evasion. The recent trend of increasing bank connections with organized crime as well as the influence of high officials or others with close ties to the Russian presidency further complicates matters. Ransom money from kidnapping and stolen IMF funds are an alleged fund source in the Bank of New York transactions.6 35