Money laundering, which involves disguising the origins of illegally obtained cash and then transforming it into apparently legitimate investments, is bolstered by the near anonymity that can sometimes be achieved through internet communication.
"A potential risk exists at any stage of the contact between a new customer and financial institution," says a report issued Thursday by the Financial Action Task Force (FATF). But, the group says, in the case of internet banking, the difficulties "are increased if the procedures for opening [accounts] are permitted to take place without face-to-face contact..."
International access
FATF, set up by the G7 group of major industrialised nations, also noted that worldwide access further complicates detection of fraud.
It is not always clear whether an account is accessed from a country other to where the money is held, and account managers may simple be too busy to monitor all the activity of individual account holders.
Gambling with illegal cash
It isn't just online banks that are vulnerable. Internet-based gambling operations can also act as a haven for illegal cash-washing operations.
The FATF said there is evidence that criminals are using online casinos to commit crimes and launder the proceeds.
Aside from the problems inherent in internet banking, online casinos further complicate tracking of questionable transactions because gambling records are software based and at the gambling site - often located offshore.
That makes evidence gathering more difficult because the records are harder to find and may not exist at all.
Combatting cyber crime
In issuing its report, the FATF said countries could take several measures to counter money laundering. They include:
- Requiring internet service providers to maintain accurate and thorough subscriber information
- Require the establishment of log files, showing access and telephone number identity
- Ensure that information is made available internationally
In June, members of the G7 group of industrialised nations published a list of countries that made money laundering easy, and threatened tough action and sanctions if their governments failed to join international efforts to crack down on the criminals.
Source:
http://news.bbc.co.uk/2/hi/business/1149984.stm
From the first days which I wrote this webloge, always I asked from myself that why there is not a powerful organization which can prevent happening of these kinds of crimes that is related to money laundering? Finally I found it; Financial Crimes Enforcement Network (FinCEN) is a governmental organization of United States. FinCEN receives Suspicious Activity Reports from financial institutions, analyses them, and shares their data with Financial Units of other countries to preventing of happening these kinds of crime. It offers training and advice to organizations of foreign governments to help improve the efficacy of their own anti-money laundering programs.