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Money‐Laundering: Estimates in Fog

Petrus C. van Duyne (Psychologist and a jurist working as a senior researcher at the Research and Documentation Centre of the Dutch Ministry of Justice)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 1 February 1994

342

Abstract

The paper examines certain problems in determining the extent of money‐laundering. The author first discusses the methodological problems inherent in assessing its volume. He then discusses two methods to estimate the extent of money‐laundering. One method is based on the cash‐flow which is generated by many forms of organised crime trade. In cross‐border money‐laundering constructions the banknotes have to be repatriated to the countries of origin. This creates a registered money trail which may be used to estimate the upper limit of money‐laundering in a national economy. The other method is the one used by the Financial Action Task Force of the G‐7. This method is based on the questionable assumption that 10 per cent of the drug trade is intercepted by the police. The author demonstrates the shortcomings of the FATF method which uses the street price level for its calculations. He warns against politically motivated inflated estimates and stresses the necessity for a methodologically responsible empirical research of this phenomenon.

Citation

van Duyne, P.C. (1994), "Money‐Laundering: Estimates in Fog", Journal of Financial Crime, Vol. 2 No. 1, pp. 58-74. https://doi.org/10.1108/eb025638

Publisher

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MCB UP Ltd

Copyright © 1994, MCB UP Limited

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