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 What is the meaning of money laundering and what are the methods and tools used for money laundering; Where many ways can be followed to obtain illegal funds and transfer them to legitimate sources through some different stages, and money laundering leads to many negative effects on companies and society in addition to negative effects on the economic output of various countries of the world.

What does money laundering mean?

Money laundering is defined as a process that aims to legitimize funds obtained from illegal sources such as drug trafficking. Finance has specific policies to know and combat money laundering as well. 

How is money laundered?

Many people want to use illegal money effectively, which makes them resort to money laundering so that this money appears legitimate and is used easily, by transferring cash to one of the other forms of money and then performing many complex financial operations aimed at returning the cash again To deposit the aforementioned funds in the bank, and the owners of these funds use them in the normal economic cycle to gain the necessary legal legitimacy.

money laundering tools

Some many tools and means are used in the money laundering process, including the following:

• Structuring deposits: Many people divide large amounts of money into smaller amounts of money to remove doubts about these funds, and then deposit these funds into different bank accounts.
• Offshore banks: Many money launderers work to send money to foreign countries that are distinguished by receiving money from unknown sources and then doing some complicated operations to get this money back.
• Phantom companies: These companies are used to make money as a payment from the price of various goods with no goods on the ground, to obtain fake invoices that help launder money.

stages of money laundering

The money laundering process includes three different stages, namely:

• Deposit: This stage includes collecting illegal funds and depositing them in the legal financial system by transferring them from cash to another type of money.
• Camouflage: This stage takes care of obscuring the true source of funds through many complex financial operations, to obtain the cash again and deposit it in a bank.
• Integration: The previous funds are used in many legal economic projects to gain a sound legal appearance and to keep their owners away from legal accountability.

Negative consequences of money laundering

Many people want to know the negative effects of money laundering operations after knowing what money laundering means and what are the means used in this process. Among the negative effects are the following:

• Effects on companies: The reliability of companies that carry out money laundering operations by their customers drops significantly, which leads to a decrease in their revenues, in addition to the impact of this on the various commercial operations of these companies as well.
• Economic effects: Money laundering leads to a decline in the performance of many companies, which leads to lower levels of money in circulation in some countries, and it also turns many producing companies into sterile companies aimed at money laundering.
• Social effects: The low performance of companies leads to providing many poor services to users, and the spread of money laundering leads to spending more money to combat these operations, which leads to a decrease in public spending.

Anti-money laundering

Countries around the world pass laws and regulations aimed at preventing criminals from obtaining funds from unknown sources and then converting them into legitimate funds, but this requires the response of all banks and other financial institutions to these laws to catch all criminals, and these laws include trafficking operations With illegal goods in addition to the existence of corruption in the disbursement of public funds and other methods of money laundering and its sources.

Many people want to know what is the meaning of money laundering and what are the negative effects of various money laundering operations; As these operations affect the lives of individuals in society in addition to their impact on the country's economy as well, countries are constantly working to combat money laundering through laws enacted for this purpose.