Prevention of Money Laundering: European Approach

The prevention of money laundering and financing of terrorism is one of the most important subjects in com-pliance today. No company that trades goods can ignore this and continue in business without an analy-sis of their own risks and the rules needed to minimize them. Anti-money laundering is as important as the avoidance of bribes, corruption, violation and theft of intellectual property.

Money laundering means simply the act of making money that comes from an illegal source “A” look like it comes from a legal source “B.” Criminals try to disguise the origins of money obtained from illegal activities by placing it into a legal business or on an account, execut-ing various trades as layering steps in order to make the money seem like it’s coming from legal sources. A drug dealer selling cocaine will hide the fact that his money comes from drug dealing. To achieve this, the drug dealer will invest it in some legal business. The dirty money, which has been “invested,” becomes washed money.