Resolution Through European Integration
Association of Montenegrin Banks, Forthcoming
Posted: 5 Nov 2016
Date Written: June 3, 2016
The development of economic relations has prompted the development of the idea of integrating more countries into one big country. Countries have formed, in the process of integration, different economic associations based on economic interests, also encouraged by the political, cultural and other reasons for unification. The European Union was created as the highest point of integration in Europe by the Maastricht Treaty in 1992 with the aim of creating a single market, supported by a single system of legal obligations that apply equally to all members of the Union. Globalization and trade liberalization significantly affect the increase of gross domestic product of the Union, but on the other hand localization opens a huge space in the Member States for abuses and tax evasion. The advantage of the integrated economy represents a liberalized business that includes free cash flows. These circumstances create space for circulation of goods, services and money, but also allow the circumvention of control of their flows, resulting in an increase of financial abuse, money laundering and terrorist financing through regular business transactions and legal cash flows. The great benefit resulting from European integration is both a channel for spreading financial abuse through business, ranging from simple frauds to money laundering and terrorist financing. Economies in the region are aimed at the achieving greater economic growth and prosperity, to modernize fast, but that modernization brings unwanted consequences in the form of various forms of fraudulent acts for which they are not yet sufficiently prepared. Money laundering is extremely harmful phenomenon, both from the individual’s aspect and entire society; therefore it is necessary to develop mechanisms to protect from this problem, before it takes hold.
Keywords: European integration, money laundering, terrorist financing, financial statements, fraud
JEL Classification: F02, F36, F61, K13, M41
Suggested Citation: Suggested Citation