Money Laundered Offshore. Ideal Financial Haven

When laundering “dirty” money, criminals often look for a haven – either offshore or “onshore”, wither online or “offline”. It has been already discussed that offshore tax jurisdiction does not necessarily go hand-in-hand with money laundering, however, money launderers often choose offshore jurisdiction to launder money.

So, what are the criteria to choose a financial haven criminals take into account?

The United Nations Office on Drugs and Crime has pointed out the following features of an ideal financial haven:

  • no deals for sharing tax information with other countries,
  • availability of instant corporations,
  • corporate secrecy laws,
  • excellent electronic communications,
  • tight bank secrecy laws,
  • a large tourist trade that can help explain major inflows of cash,
  • use of major world currency, preferably the United States dollar, as the local money,
  • a Government that is relatively invulnerable to outside pressure,
  • a high degree of economic dependence on the financial services sector,
  • a geographic location that facilitates business travel to and from rich neighbours.

    Also, features like time zone location, a free-trade zone and availability of a flag-of-convenience shipping registry can influence money launderers’ choice.

    The above-mentioned list does not indicate the places not to deal with, it just indicates the places that are vulnerable to money laundering and the United Nations help many countries to develop anti-money laundering appropriate policies to avoid illegal proceeds.

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