Money laundering

Money laundering is a process some criminals do to hide the money they make from crimes or political corruption, which is called "dirty money". Such dirty money needs to be "cleaned" so it looks like it came from legal sources, and banks can accept it without being suspicious on where it came from. Criminals also do money laundering to make it hard for the police to find out where the criminal got the money.

One way criminals launder money is by using the money earned from illegal activities to buy things (like gold and silver, shares or casino chips, other legitimate business activities like food or liquor stores) and then selling those things to get the money back. If a criminal buys and sells things many times it is hard for the police to find out where the criminal got the money.

Some countries have laws to try to stop money laundering. These laws help the police to find out when criminals try to do money laundering. Under the laws in some countries, business people must:

tell the Government when someone pays them a lot of money (for example $10,000) or when someone puts a lot of money in their bank
tell the Government if they think someone is doing money laundering, and
write down on paper, or on a computer, every time someone gives them a lot of money or they give someone a lot of money.

In 1989, some countries set up a group of people from different Governments to tell countries the best ways to stop money laundering. This organization is called the Financial Action Task Force on Money Laundering. The following countries have joined the Financial Action Task Force (FATF/GAFI):

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↑ "Members and Observers - Financial Action Task Force (FATF)". Archived from the original on 2015-09-19. Retrieved 2018-11-29.

[1] "Members and Observers - Financial Action Task Force (FATF)". Archived from the original on 2015-09-19. Retrieved 2018-11-29.

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