Commentary

A7.101 Introduction to money laundering

Administration and compliance

A7.101 Introduction to money laundering

Part A7     Money laundering and tax avoidance schemes

Contents of Part A7

A7.1     Money laundering

A7.2     DOTAS and money laundering

A7.3     Promoters of tax avoidance schemes and serial tax avoiders

A7.4     Tax avoidance

Division A7.1     Money laundering

Revised by
ELENA ELIA

Barrister

and
SAM THOMAS

Barrister, 2 Bedford Row

For updates affecting this Division please see Part A0 Updates

Money laundering—overview

A7.101 Introduction to money laundering

For the latest New Developments, see ND.1295, ND.2048, ND.2064.

Since Al Capone was convicted of tax evasion in 1931, prosecutors and police forces have realised the power in combating crime through tracking the proceeds. Money laundering aims to thwart these attempts by law enforcement. It enables criminals to give illegal or 'dirty' money the appearance of deriving from a legitimate or 'clean' source; and there are a number of methods in which this can be achieved. Criminals can convert proceeds into cash and spend it; which may work for small amounts of money but is impractical for larger sums. The more sophisticated criminals use techniques such as layering, where the funds are moved in a relatively short time between a number of entities so that the money ends up both appearing legitimate and having come from a legitimate source, with the initial injection of the funds into the chain of legitimacy being hard to trace. Whatever method is used to legitimise funds they all have one thing in common. They must come into, and exit from, a legitimate business at some stage.

Proceeds of Crime Act 2002

The UK has had money laundering

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