International

China A Source For Laundering Criminal Cash?

Could the Silk Road be a path to money laundering?

Associated Press reported that a range of criminals — from scam artists to drug dealers — have found a haven in China as a spot for money laundering efforts as underground financial networks in that country have covered for the nefarious activities.

That comes as the country has been an increasing part of the globalization trend, with money, people and its “criminal economy” being sent abroad. So, gangs from countries as far-flung as Israel and Spain and cartels from South America have laundered billions of dollars across China and Hong Kong, masking their activity through legitimate trade and finance that come across that region, said the newswire, basing that statement on an interview with law enforcement officials and legal documents.

By way of contrast, the Chinese Foreign Ministry has said, through spokesman Hong Lei, that China “is not, has not been nor will be in the future a center of global money laundering.”

Yet, in one example, last year, a French court convicted Gilbert Chikli of defrauding five companies of as much as €6.1 million. Chikli also was convicted in a €70 million extortion plot that attempted to bilk dozens of other enterprises, and he told the newswire he laundered his ill-gotten gains through China and Hong Kong.

Trade-based money laundering has also been a growing interest and concern for the United States, with billions moved through the region by drug cartels. They put their profits into bank accounts, and the money is then used to buy merchandise elsewhere in order to “clean” it. The U.S. State Department said earlier this month that China has not been up to par on its money laundering investigations, with Europol echoing that assessment.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 AML/KYC Tracker, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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