Money Laundering and Corruption Essay Example | Topics and Well Written Essays - 2500 words

Money Laundering and Corruption - leaven ExampleThe government activity and various pecuniary institutions have made signifi female genital organt efforts of preventing and detecting and fraud issues. This iswhen making legal proceeding issues that involve dirty money. Corruption is a moral impunity that involves embezzlement of funds and bribery issues. The government employs operational issues such as use of the FATF for investing corruption and conducting money launder as headspring as asset tracing investigations. The Risks Posed By Money Laundering and Corruption to the Global fiscal System and International Business Money laundry and corruption pose varied risks towards global financial dust and international business. Laundering of money and corruption are interrelated because they both pose risks to guestsand theirproducts or transaction made and also impose risk to geographical risk factors in varied ways. at that place are many highlighted cases that have posed ris ks to many economies across the globe. Therefore, FATF has made considerable efforts of preventing money laundering and corruption. Therefore, their independent organization have implemented anti monetary laundry and combating terrorist financing activities in grade to reduce the risks that whitethorn arise from these threats. Understanding risk posed by these threats is significant. This is because it enables the government to provide pass for areporting entityto implementthe riskmanagement systems and assess the level of enhanced due constancy (EDD) in order to reduce risks. Customer Risk Factors Money laundry and corruption issues expose policy-making people and other public official to risks. The measures employed in money laundry are intend to encourage entities to report risk sensitive issues existing in the entity or exposing politically persons to high-risk to customers. The politically exposed persons (PEPs) status does not reveal that a person is corrupt or incriminate d for being corrupt, merely it reveals the potential risks money laundering contribute to customers and their transaction process. The risk that corrupt PEP poses to the financial system is seen as one way of putting customers under risk especially when they are making transactions (Karsten 2003, p.15). Business relationships with PEPs contribute to increased customer risks because of increased possibility that an individual is holding. For instance, politicians may misuse countenance by influencing their personal gain with an aim of achieving their own advantage. Moreover, the nature of the position may lead to customer risk factors. Someone holding a position in a certain office may have a substantial opportunity and authority of assessing the funds or assets of the state. He or she can take control over the government resources including setting money for combating terrorism issues and other activities thus exposing customers to great risks. For instance, the court case of Nic olau Dos Santos Neto, the ex-president of Brazil is one of the incidences that reveal the corruption nature of PEPs (FATF Report 2012, p.14). The essential corruption vulnerability may vary dependingupon the extent to which they exercise authority in the hierarchy. It is significant to actualize that not all PEPs cause risks to customers.