Money laundering is the operation of hiding the source/origin or destination of illegal moneys in order to make them legal. All civilized countries fight this phenomenon through improved legislation and international agreements.
Therefore, on October 2000, the Pan-European legislation on money laundering was enacted, whereby a banker who does not report a suspicious client may be imprisoned for at least four years. The Russian Federation criminal law also considers legalizing money or any other property acquired illegally as an economic offence. The essence of the crime is in making financial operations and other deals with money or other property acquired expressly in an illegal way as well as the use of this money or other property to carry out business or other economic activities.
A law on money laundering was also passed in Israel in spring of 2003. Its components are as follows:
- Money laundering is a criminal offence punishable by imprisonment of up to 10 years or a fine of up to 3 million shekels.
- The law bans any operation with capital acquired illegally in order to conceal its source and name of the real owner.
- The law provides the following definition of criminal offences related to money laundering: trade in narcotics, illegal trade in arms, illegal gambling, crimes connected with prostitution, crimes connected with violation of copyrights, bribery, murders, car theft and trade in stolen car parts, etc. If during an investigation related to money laundering, facts are discovered on tax crimes, they will be reported to tax authorities.
- To sentence a person for money laundering it suffices to prove that such person knew that the money or property was acquired illegally. Even if a person is not aware what exact crime was the source of the capital, such person will not be not acquitted.
- Financial institutions including banks should identify clients under established rules and report to a special department within the Ministry of Justice on deals and financial operations, which are beyond common rules.