Money Laundering and Its Regulation

Abstract

This article examines definitions of "money laundering" and the conceptual and actual role its regulation plays in dealing with drug markets. If laundering is prevented, incentives to become major criminals are diminished. It identifies and critiques three aspects of harm arising from laundering: facilitating crime groups' expansion, corroding financial institutions, and extent. After a discussion of laundering techniques used with drug money, including the symbiotic relationship with some otherwise legitimate ordinary businesses, the article examines the history of public- and private-sector antilaundering policies and their implementation in the United States and globally. It concludes that much detected laundering involves the same out-of-place judgments the police use, but though the proportion of routine and suspicious activity reports that yield arrests may be low, they do generate some important enforcement actions. Nevertheless, the impact of antilaundering efforts on enforcement resources, organized crime markets, or drug consumption levels remains modestly understood at present.