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NCJ Number: 211260 Find in a Library
Title: Underground Banking: Legitimate Remittance Network or Money Laundering System?
Author(s): Rob McCusker
Date Published: July 2005
Page Count: 6
Sponsoring Agency: Australian Institute of Criminology
Canberra ACT, 2601, Australia
Publication Number: ISBN 0 642 53884 0
Sale Source: Australian Institute of Criminology
GPO Box 2944
Canberra ACT, 2601,
Document: PDF
Type: Issue Overview
Format: Document (Online)
Language: English
Country: Australia
Annotation: This report provides an overview of underground banking and the potential for criminal abuses.
Abstract: In underground banking, money is transferred through informal rather than formal mechanisms. It represents one of the major ways in which workers from overseas transfer legitimate remittances to their home countries. The informal mechanism of underground banking, unfortunately, makes it a perfect conduit for money laundering by criminal organizations and terrorist networks. In order to retain the use of underground banking for legitimate purposes while thwarting the attempts of criminal organizations, a regulatory balance must be struck. Following a description of how underground banking systems work, this report focuses on the potential for criminal organizations to exploit underground banking for their illegal activities. The various regulatory responses that have been employed are analyzed and both general and specific economic solutions are offered. Governments are cautioned to avoid overregulation as there is a danger of driving underground banking even further underground, causing a larger problem from a public safety perspective. One solution may be to alter the economic conditions that make underground banking an attractive alternative to formal banking. Figures, references
Main Term(s): Money laundering
Index Term(s): Australia; Regulations; Trend analysis
Note: Australian Institute of Criminology Trends & Issues in Crime and Criminal Justice No. 300, July 2005; downloaded September 13, 2005.
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