Chapter 45: Money Laundering Regulation: From Al Capone to Al Qaeda
Brigitte Unger Money laundering – bringing illicit proceeds from drugs, fraud and other crime back into the legal economy – owes its name to Al Capone. He literally used launderettes for disguising illegal alcohol revenues during prohibition in the US. Launderettes, a flourishing cash-intensive business in the 1930s, when almost no household had a washing machine, were an ideal location to slip the money from illegal alcohol sales into the cash register. Disguising the origin of such money is, however, even older than Al Capone’s “washing of money.” One of the oldest techniques to circumvent government scrutiny was to use international trade to move money, undetected, from one country to another, by means of fake invoicing or falsely declared merchandise (Zdanowicz 2009). Though money laundering is an old way of trying to hide the illicit proceeds from crime, it became an issue of international concern only in the last 20 years; and it is only since 9/11 that it figures as a prominent issue of national and international safety on the agenda of international organizations. How was it possible that a problem which existed for centuries was suddenly considered a topic of major international concern which had to be regulated? And how was it possible that its scope expanded from Al Capone’s whiskey business to protecting national security and fighting Al Qaeda? I will discuss the characteristics of the problems to be regulated in section 45.1 and what they mean for the private support and public interest in regulating laundering in section...
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