The Scale and Impacts of Money Laundering

The Scale and Impacts of Money Laundering

Brigitte Unger

The book gives an interdisciplinary overview of the state-of-the-art of money laundering as well as describing the legal problems of defining and fighting money laundering. It then goes on to present a number of economic models designed to measure money laundering and applies these to measuring the size of laundering in The Netherlands and Australia. The book also gives an overview of techniques and potential effects of money laundering identified and measured so far in the literature. It adds to this debate by calculating the effects of laundering on crime and economic growth.

Chapter 3: Ways of Quantifying Money Laundering

Brigitte Unger

Subjects: economics and finance, economic crime and corruption, money and banking, law - academic, corruption and economic crime


3.1. MEASURING THE IMMEASURABLE Money laundering is a largely secretive phenomenon. The exact number of launderers that operate every year, how much money they launder in which countries and sectors, and which money laundering techniques they use is not known. Apart from recent spectacular media coverage, such as an US$80 million fine levied against ABN AMRO by US regulators, the involvement of the Austrian BAWAG bank in money laundering through the Caribbean, or the charges against Jean-Cyril Spinetta, the president of Air France–KLM, for money laundering and fraud in connection with the bankrupt company Pretory (see Financieel Dagblad 13th July 2006, p. 2), money laundering remains largely in the dark. It only comes to light when it is detected. Are these spectacular events the entire story or are they just the tip of the iceberg? Are they random samples of a small or large underlying population? Does the media overreact to scandals and overestimate money laundering as some criminologists believe (see for example, van Duyne 2006) or is the problem larger than one could possibly imagine, amounting to several trillion US dollars per year (Walker 1999[a])? In order to examine the money-laundering problem, one has to measure it according to country as well as globally. But estimating money laundering means measuring the immeasurable. Nevertheless, courageous attempts have been made to at least estimate the ranges and magnitudes of money laundering. Calculating the amount of money laundering will introduce problems similar to measuring the shadow economy, the amount...

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