Economic and social effects of money laundering: the UK case

Abstract

Paul Barnes

Money laundering is one of the largest economic problems of the 21st century with huge social implications and effects. It enables the richest and most powerful in society to take advantage of globalisation and differences across countries. It is only for less well-off money laundering regulations in the UK are stringent and enforced. Money laundering is not a ‘victimless crime’. The individual(s) or the country (and inhabitants) from which the money is stolen are, by definition, the victims/losers, whilst the money is used in the recipient country to support the criminal’s lifestyle or other activities such as drug importation, child sexual exploitation, human trafficking and terrorism and so on, alternatively, invested in property until a profitable opportunity arises. This paper examines the problem both generally and the UK in particular. It describes the main forms and types of money laundering and the devices used. This is followed by sections on its effects on an economy and contains an empirical study of this as it affects London property prices, the actions taken by UK regulators against money launderers, their advisers and agents. The final section discusses some recent initiates and recommendations as to what can and should be done.

PDF