Mitigation of Money Laundering and Compliance Enforcement in the Banking Sector of Cameroon
Posted: 17 Jan 2015 Last revised: 19 Jan 2015
Date Written: January 16, 2015
The Financial Action Task Force (FATF) defines money laundering as the processing of criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source. In the same line of thought, the Investopedia defines money laundering as the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.
According to the study conducted and published in the US department of state electronic journal, the practice of money laundering allows crime to dominate by promoting criminals to hide and legitimize proceeds derived from illegal activities. It is estimated that, money laundering activity amounts to approximately $1 trillion a year, worldwide. These illicit funds allow criminals to finance a range of additional criminal activities namely: corruption, distort economic decision-making, aggravate social ills, and threatens the integrity of financial institutions. To this long list; are the sales of illegal arms, smuggling, and the activities of organised crime, including drug trafficking and prostitution rings, can generate huge amounts of proceeds. Other illegal transactions such as embezzlement, insider trading, and bribery and computer fraud schemes can also produce large profits and create the incentive to legitimise the ill-gotten gains through money laundering. Banks are at the heart of these movements of money.
The current paper is an attempt to enumerate strategies developed by the Cameroonian authorities regarding the fight against money laundering and other ills related to the movement of money. The first part gives an overview of variables such as money laundering, compliance enforcement and the role of the Financial Action Task force. The second part provides measures the Cameroonian authorities are implementing to mitigate money laundering.
Keywords: Money Laundering, Bank, Cameroon, Finance
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