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To understand the impact of money laundering can be very easy for the sufferers, who lost their reserves due to some crime. The effect of this crime or fraud can be deeper and long lasting on the society. Some people have the innate fear that Anti money laundering or AML can have a negative effect on commerce in developing countries. Let’s focus on the developing nations and their impact on this situation- The first and most obvious result is the growth of crime and corruption due to anti-money laundering. A lot of authorities that are believed to be harbors for successful laundering are actually careless about the regulations of the government. They usually focus on small crimes, some reporting, implementation of penalties, and provisions. In these conditions cases of bribery in government and bank officials, lawyers, accountants can increase. Once the base is established then cases of bribery can become less and other crimes can also become less. The second influence is on legal businesses where a fraudster uses a company’s name to hide his illegal funds and activities. It is possible that the work of the company may be reduced. This allows the company to sell the products in reduced rates, which would reduce their competition and creating the opportunity to expand. As the company grows it provides a great chance to the launderer to take the illegal funds out of the company. In a developing country, it won’t be difficult for the fraudster to gain access of the company and the industry. It must be noted that the launderer does not share the same objectives of the legalized business owners. These legalized owners aim to maximize their returns through lucrative operations in the business. The primary concern of the launderer is not on the returns but on hiding the actual origin and ownership of the funds that are controlled by him. This also leads to economic distortion where the launderers invest their money and assets in those areas that may not be beneficial for the economy of the country. It distorts the government with the facts of the country and the government does not get a true picture of the actual economic trends. Due to this leadership takes such decisions which are not in the best interest of the company. In such a situation it becomes necessary to have a fraud prevention method. So every company or institution that faces the threat of fraud needs to take steps by using the best management tools. By using the fraud prevention tools one can prevent any kind of fraudulent activity. By having a fraud management system would help in ensuring a protection shield for the organization.
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Anti-money laundering, Fraud prevention,
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