Implications of cash-dominated transactions for money laundering

It must be recognised that products and services offered by other financial and non-financial institutions are also attractive to the launderer.

Money laundering has traditionally been associated solely with banks. Action to combat money laundering has therefore focussed on the banks, reflecting the historical emphasis on the laundering of street cash derived from the sale of drugs. While it may be true that banking processes such as deposit taking, money transfer systems and lending, etc., offer a vital laundering mechanism, criminals have responded to counter measures put in place by the banking sector. It must now be recognised that products and services offered by other types of financial and non-financial institutions are also attractive to the launderer.

About the author:

Humphrey PB Moshi is a professor of Economics at the University of Dar es Salaam. He was the economic advisor to the Minister for Finance of Tanzania and the Chief Economic Advisor to the President of Zanzibar, as well as one of the key architects of the Eastern and Southern African Anti-Money Laundering Group. This is a revised version of a paper presented at the Expert Group Meeting on Proceeds of Crime in Cash-Based Economies, held in Vienna, under the auspices of United Nations Office on Drugs and Crime, from 18–20 November 2009.