The Cost of Laundry!

Abstract

At a recent meeting of government officials in Trinidad to discuss regional security and in particular the threat of regional and, indeed, international dcstabilisation presented by the illicit drug trade, considerable attention was focused on the role of offshore financial centres in facilitating the financial activities of organised crime groups. Of course, over the years offshore financial centres, typically on small tropical islands in the Caribbean and more recently the Pacific, have attracted a certain amount of criticism. As governments have increasingly recognised the practical importance of taking the profit out of serious crime, thus attacking both the motivation for much criminal activity and undermining liquidity within criminal financial structures, attention has inevitably been focused on the attempts of those involved in protecting the profits of crime to launder it. Ironically when the Criminal Justice Act 1988 provided the courts with powers to deprive convicted criminals of the proceeds of profitable criminal activity in Britain, this gave to organised criminals a clear incentive to launder their ill‐gotten gains. It must be remembered that the laundering of money is an expensive and potentially high risk activity. Therefore, criminals would not normally bother to go to the expense and trouble of laundering the proceeds of their illicit activities unless there was a pressing reason to do so. The prospect of confiscation on conviction is a real risk and, thus, a compelling justification for attempting to obscure the source of such funds. Of course, the 1988 Act did not contain provisions outlawing money laundering, which was unfortunate given the incentive that it gave to the practice.

Citation

Nakajima, C. (1995), "The Cost of Laundry!", Journal of Financial Crime, Vol. 3 No. 2, pp. 172-174. https://doi.org/10.1108/eb025702