Money Laundering Phenomenon: Economic of the Suspicious Transaction Reports: The French Experience

Abstract

The main purpose of this article is to indicate interconnections that exist between the individual phases of money laundering, which is one of the most complex economic phenomena. The initial phase of money laundering involves the preparation of the discussed practices, primarily through the deployment of capital acquired from illegal sources (for example through the transfer of capital abroad—this practice helps reduce the risk of detection of money laundering). Among the methods of capital transfers, we can point the following: smuggling, transfer of luxury goods, electronic transfers (Hawala system—an underground banking system) or cyber-laundering. The second stage of money laundering involves the so-called placement, which is accomplished through the introduction of illegal means of payment into the financial system primarily by placing them on bank accounts. The third phase is referred to as layering and is done by hiding the actual source of the money that is transferred to bank accounts deployed in different banks or countries (double placement) with the participation of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system. The last step is integration (legalization), which consists in the final legalization of the money.