Common Terms Associated with the Offence of Money Laundering

Common Terms Associated with the Offence of Money Laundering

Common Terms Associated with the Offence of Money Laundering

Criminals commit crimes, generate illicit money, and then try to place it in the legitimate economy. They take undue advantage of the open economy, globalisation, and thriving private sector to hide and legitimise their dirty money.

In this infographic, we discuss the offence of money laundering and the key terminologies associated with it.

The Offence of Money Laundering

Money laundering is the act of converting illegitimate funds that are the proceeds of a crime or predicate offence into clean and legitimate funds by concealing their illicit origin and ownership.

Criminals generate illicit money through offences like fraud, drug trafficking, tax evasion, corruption, etc. To hide the origins of this “dirty” money, they rely on money laundering to make it appear legitimate.

Key Terms Associated with Money Laundering

1. Predicate Offence: Predicate offence refers to any act that qualifies as an offence or misdemeanour under the relevant laws of the country, whether committed within or outside the country, subject to the condition that such act is punishable in both countries.

2. Proceeds of Crime: Proceeds of Crime refers to assets and funds, or any part thereof, that are generated, directly or indirectly, from a Predicate Offence.

3. Concealment: Concealment of funds refers to disguising and hiding the illegal source of funds. The funds are distanced from their criminal origin through various methods like the structuring of funds or creating complex ownership structures.

Summarising the Key Terms Associated with Money Laundering

Understanding the key terminologies like proceeds of crime, predicate offence, and concealment helps in understanding how criminals try to legitimise their money and take necessary steps to counter them.