Themes > Banking > Money laundering
Money laundering

Money laundering is increasing in Europe. Regulations against it place a heavy burden on banks and other financial institutions.

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The EU's Second Banking Co-ordination Directive, also known as the Money Laundering Directive, was issued in 1991. It required states of the Union to establish similar regulations preventing, identifying and reporting money laundering activities. Money laundering is the process which criminals attempt hide the true origins of money, so that the money appears to from a legitimate source. In words, "dirty" money is turned into money. The availability of drugs such as heroin and cocaine increased substantially in recent years. As a , the amount of drugs money being has risen dramatically. There are also many serious crimes for which money laundering is required. You only have to of terrorist activities, fraud, counterfeiting, extortion, blackmail and major robberies.

Banks and other institutions are required to set and operate procedures to combat money laundering. Banks are required to monitor all their with customers and other banks. They have to identify which could possibly be part of a money laundering operation and their suspicions to the government's Criminal Investigations Division. Banks must also take reasonable to prevent these activities happening. The cost of the regulations is high, in terms of establishing and running computer systems for detection, staff training and record keeping.


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