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The need for accountability and transparency of financial transaction in the global world is increasing. This is imperative given the global financial crisis of 2008. Evidence shows the increasing demand for corporate governance and the prevention of the financial risk of money laundering calling for increasing regulations. 
Figure 1 shows its spreading effects on the global financial sectors. The risk as shown below spread from terrorist financial risk 55%, corruption risk 15%, and financial transparency 10%, political and legal risk 5%
Fig 1: International Asset Recovery Centre

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The impact is felt globally considering the metrics of the World Bank/ IMF assertion of doing business across various countries in the world. An increasing arithmetical progression is noticeable from 2.5% in 2005 to 5.6% in 2016 indicating that there is no progress recorded to show that the efforts put in place to fight the financial crime of money laundering as demonstrated in the work of the World Bank as evidenced in Figure 2 is progressing. 

One concern is the activities of investment companies as instrument of money laundering and this call for the increasing awareness for corporate governance and increasing demand for the accountability of fiduciary relationship and obligations

World Bank Doing Business Project

Fig 2: World Bank (2016)

What is Money Laundering?

The ordinary definition of money laundering from a personal perspective is simply the conversion of or making illegal money legal. The International Compliance Association defined money laundering as “the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source,”. 

The United nations identifies this as the most fundamental rule in using  money laundry mechanisms:
‘Law One: the more successfully a money laundering apparatus is in imitating the patterns and behaviour of legitimate transactions, the less the likelihood of it being exposed.’

The closeness in proximity of an illegitimate transaction to a legal one is the fundamental rule of successful money laundering. These devices used by criminal entrepreneurs such as transfer- pricing between businesses internationally, with fraudulent documentation, these criminal acts are near impossible to trace on the surface. Only become visible when the criminal act is unraveled, giving jurisdiction for the money trail to be revealed. Historically Criminal entrepreneurs  catered to small regional geographic markets, but now cater to an international market. This has caused what the United Nations describes as an “integrated underground global financial system”. Criminal Entrepreneur are now able to use transnational corporations to launder money with the use of secrecy jurisdictions in order to camouflage illicit commercial transactions such as assisting insider trading schemes by corporate bribe.
 The process usually entails some laundering activities. It has also been referred to as a financial risk and the biggest business problem in the world as well as a depletion of resources. Money laundering is important to all those who engaged in criminal activities that involve large proceeds to conceal the money trail, which can be used to pin down the perpetrators for their crimes. Moreover, the proceeds of the crime themselves can be the subject of investigation.

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