What is Money Laundering?

Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of the underground economy.

[ this can be done in any financial system, including Western or Islamic ]

In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Comptroller of the Currency) to encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting.

As a result, the illegal activity of money laundering is now recognized as potentially practiced by:

• Individuals,
• Small and large businesses,
• Corrupt officials,
• Members of organized crime (such as drug dealers or the Mafia),
• Even corrupt states, through a complex network of shell companies and trusts based in offshore tax havens.

A few examples of money laundering are smurfing or kiting.
The increasing complexity of financial crime, the increasing recognized value of so-called "financial intelligence" (FININT) in combating transnational crime and terrorism, and the speculated impact of capital extracted from the legitimate economy has led to an increased prominence of money laundering in political, economic, and legal debate.

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