Quo Vadis, Money Laundering?

Crime is resilient and fast adapting to new realities. Organized crime is in process of establishing an alternative banking system, only tangentially connected to West's, in fringes, and by proxy. This is done by purchasing defunct banks or banking licences in territories with lax regulation, cash economies, corrupt politicians, no tax collection, but reasonable infrastructure. The countries of Eastern Europe - Yugoslavia (Montenegro and Serbia), Macedonia, Ukraine, Moldova, Belarus, Albania, to mention a few - are natural targets. In some cases, organized crime is so all-pervasive and local politicians so corrupt that distinction between criminal and politician is spurious.

Gradually, money laundering rings move their operations to these new, accommodating territories. The laundered funds are used to purchase assets in intentionally botched privatizations, real estate, existing businesses, and to finance trading operations. The wasteland that is Eastern Europe craves private capital and no questions are asked by investor and recipient alike.

The next frontier is cyberspace. Internet banking, Internet gambling, day trading, foreign exchange cyber transactions, e-cash, e-commerce, fictitious invoicing of launderer's genuine credit cards - hold promise of future. Impossible to track and monitor, ex-territorial, totally digital, amenable to identity theft and fake identities - this is ideal vehicle for money launderers. This nascent platform is way too small to accommodate enormous amounts of cash laundered daily - but in ten years time, it may. The problems is likely to be exacerbated by introduction of smart cards, electronic purses, and payment-enabled mobile phones.

In its "Report on Money Laundering Typologies" (February 2001) FATF was able to document concrete and suspected abuses of online banking, Internet casinos, and web-based financial services. It is difficult to identify a customer and to get to know it in cyberspace, was alarming conclusion. It is equally complicated to establish jurisdiction.

Many capable professionals - stockbrokers, lawyers, accountants, traders, insurance brokers, real estate agents, sellers of high value items such as gold, diamonds, and art - are employed or co-opted by money laundering operations. Money launderers are likely to make increased use of global, around clock, trading in foreign currencies and derivatives. These provide instantaneous transfer of funds and no audit trail. The underlying securities involved are susceptible to market manipulation and fraud. Complex insurance policies (with "wrong" beneficiaries), and securitization of receivables, leasing contracts, mortgages, and low grade bonds are already used in money laundering schemes. In general, money laundering goes well with risk arbitraging financial instruments.

Trust-based, globe-spanning, money transfer systems based on authentication codes and generations of commercial relationships cemented in honour and blood - are another wave of future. The Hawala and Chinese networks in Asia, Black Market Peso Exchange (BMPE) in Latin America, other evolving courier systems in Eastern Europe (mainly in Russia, Ukraine, and Albania) and in Western Europe (mainly in France and Spain). In conjunction with encrypted e-mail and web anonymizers, these networks are virtually impenetrable. As emigration increases, diasporas established, and transport and telecommunications become ubiquitous, "ethnic banking" along tradition of Lombards and Jews in medieval Europe may become the preferred venue of money laundering. September 11 may have retarded world civilization in more than one way.

Sam Vaknin is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He is a columnist for Central Europe Review, United Press International (UPI) and eBookWeb and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

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#8 - Avoid distractions. Keep focused on speaker. By looking off in other directions or not maintaining good eye contact is a non-verbal communication signal that you really aren’t interested. If you are truly not interested in conversation, politely stop conversation, shake their hand and leave.

#9 - Don’t anticipate what is going to be said and try to finish their sentence. Listen to whole sentence and clarify if necessary. Listen to their needs and concerns and leave your comments out of conversation. Many offenders can’t wait for speaker to stop so they can talk about themselves.

#10 - If emotionally charged words or phrases are used, don’t start an argument. People are either not sensitive to their comments or they are ignorant. If offended by their comments, calmly state your view. If they retract their statement or apologize for offending you then continue conversation, otherwise stop conversation immediately.

# 11 - Listen to tone and interpret speaker’s voice implications. Is speaker upset? Depressed? Happy? Be compassionate to their need for you to listen. # 13 - Use good body language when listening. Keep a nice arm’s length speaking distance, arms can either be by your side or held at your waist ( not crossed)

A good conversation is when you know as much about speaker as they know about you. Taking turns to listen and speak. Asking open- ended questions to stimulate a good dialogue. This is how customer loyalty is built and friendships develop.