According to the International Monetary Fund, this represents between two and five per cent of the world‘s gross domestic product. The lower figure is equivalent to the value of the total output of an economy the size of Spain‘s.
This massive sum of illegal money usually finds a home in geographical areas that have lax control over their financial institutions (off-shore tax havens) where it is invested principally in ‘passive’ i.e. non-tangible-asset producing, ventures. This has a very serious impact on international economic development. Money laundering can only flourish where some sort of banking system exists that is willing to cooperate with money launderers. Because banking for money launderers can be extremely profitable many bankers cannot resist the temptation to participate.
In HAVANA HARVEST, the protagonists deal with the BANK OF CREDIT AND COMMERCE INTERNATIONAL (BCCI), a banking group that had a unique criminal structure that was conceived for the specific purpose of evading regulation or control by governments. BCCI’s criminality included fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI’s bribery of officials in most of those locations; support of terrorism, arms trafficking, and the sale of nuclear technologies; management of prostitution; the commission and facilitation of income tax evasion, smuggling, and illegal immigration; illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers.
HOW DO WE FIGHT ‘MONEY LAUNDERING’?
Money laundering is defined by national and international laws that prescribe sanctions against those who practice it.In 1989 FATF (Financial Action Task Force), a Paris-based international policy-making body which, today, has about 40 member nations, was created by the G-7 Summit to develop and promote international policies to combat money laundering and terrorist financing. The EGMONT GROUP was founded in 1995.
It is a Toronto headquartered international FORUM of financial intelligence units the members of which work together to improve their respective anti-money laundering and anti terrorist financing programs. These members are all called FINTRACs (Financial Transactions and Reports Analysis Centers) formed to collect and analyze financial intelligence to detect, prevent and deter money laundering and terrorism. FINTRAC CANADA AND ITS FELLOW MEMBERS IN EGMONT (now numbering ABOUT 40 IN VARIOUS JURISDICTIONS) ARE THE SHARP END OF THE FIGHT AGAINST MONEY LAUNDERING AND TERROR FINANCING! THE GROUP RELIES HEAVILY ON THE Know Your Client (KYC) concept whereby EVERY EMPLOYEE OF EVERY PARTICIPATING FINANCIAL INSTITUTION is required to know his client and report any unusual or suspicious transaction to FINTRAC by filing what is known as a Suspicious Activity Report (SAR). In 2005 over 200,000 SARs WERE FILED in the UK alone. This number is growing by 50% per annum. In 2008 the number had reached three quarters of a million.
FATF, EGMONT AND THE FINTRACS are faced with the ALMOST IMPOSSIBLE TASK of monitoring the 10 trillion financial transactions that take place daily worldwide.
HOW DOES TERRORISM FEED ON MONEY LAUNDERING? (and vice versa) Terrorism is armed conflict, and conducting armed conflicts costs money, lots of it. Nation-states that engage in armed conflicts raise money from their citizens through taxation. This activity involves mainly clean money. TERRORISTS raise money in secretive ways from rogue donors.
Most of the donors‘ money is clean (i.e. emanating from legitimate sources, such as, for example, oil revenues), but, to avoid revealing their identities these donors turn to a form of reverse money laundering (i.e. turning clean money into dirty money) through complex, parallel, systems to dirty‘ their money they want to spend on terrorism. One of these systems (much liked by Muslim extremists for obvious reasons) is the HAWALA, a type of financial institution that is almost impenetrable because it is based purely on personal trust and operates virtually without records. This informality makes the HAWALA very popular in the Middle East, especially with the poor who do not know how to cope with paperwork, cannot afford to pay bank charges and to adhere to minimum balance requirements.
Curiously, the system was NOT invented by Muslims, but by the Knights Templar, a Christian Crusading Order created during the Crusades. Consider two brothers one lives in Montreal, the other in Moscow. They can effect international payments and receive funds without much money changing hands and without creating a paper
In his novel Havana Harvest Robert Landori again draws on his roots in Budapest, Montreal and Latin America to create a web of CIA intrigue and counter-intrigue, this time set in Cuba…. A masterful weaving of plot-lines that will keep you turning pages.