Inter-agency co-operation was improved, lines of communication between law enforcement and financial institutions were increased, and the latter’s financial reporting requirements for international transactions were expanded. The 2001 USA Patriot Act amplified the fight against terrorism and its financiers, broadening the scope and strengthening the rules of the 1986 MLCA. 2001’s 9/11 terrorist atrocities influenced the international drive against money laundering due to the role of terrorist financing in the incident. Significantly, Mexico, as both a producer and conduit for drug cartels smuggling illegal narcotics into the USA, criminalised money laundering for serious offenses in 1996. The organisation is now 39 members strong. A treaty was drawn up and 171 countries pledged co-operation.Īt the G-7 summit the following year, the Financial Action Task Force on Money Laundering (FATF) was established to study and analyse this financial crime, and implement measures to prevent or combat it. The 1988 Vienna Convention against Illicit Traffic in narcotic drugs and psychotropic substances acknowledged money laundering as an illegal practice in relation to the drug trade. The relevant agencies in the many countries with strong economic and cultural ties to the USA followed suit. The 1986 Money Laundering Control Act (MCLA) represented the culmination of laws passed and threw down the gauntlet to drug cartels attempting to legitimise their profits. In the USA, the Reagan presidency’s War on Drugs emphasised seizing the assets and funds of drug barons. Reporting on the 1973 Watergate scandal saw the term ‘money laundering’ enter the media lexicon. The act acknowledges, emphasises, and combats money laundering in the drug trade. This indelibly elevated the targeting of profits from financial crime above the trend of focusing on tax evasion. The USA’s Bank Secrecy Act (BSA) of 1970 obliged vendors to declare cash transactions above a certain amount. These included laundries, which is most likely how the term ‘money laundering’ came to be. Alongside ‘cleaning’ dirty money through gambling, these syndicates hid the source of their wealth from authorities by engaging in legitimate business enterprises. ![]() The USA’s Prohibition Era sees the development of organised crime gangs - syndicates - in American cities which profited enormously from bootlegging during the 13-year nationwide alcohol ban. ![]() Historical evidence suggests that Chinese merchants would conceal wealth acquired through trade from rulers and officials whom they feared would confiscate profits.
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