MONEY LAUNDERING AND THE INTERACTION WITH THE INTERNATIONAL BANKING SYSTEM

Money laundering is a process by which one gives or tries to give an appearance of legality to profits obtained illegally by criminals who, without being compromised, subsequently benefit from those revenues. The preoccupation of hiding the nature or the existence of money has existed since ancient times. Taking into account the scale of operations and their frequency, specific to those times, the historical tradition enshrines the following practices: the use of banking activities and geographical areas as financial refuge. The use of banking activities to hide and fraudulently transfer money experienced a special development in the European Middle Ages. These money laundering techniques, which foreshadow modern banking techniques, were mainly designed either to make the high interest rates on loans disappear, hiding their existence, or to appear to be a different kind of income, disguising their nature. The objectives of money laundering were and are achieved using several methods: - for long distance payments, between two shopping centers where different currencies were used, the payment amount was calculated on the basis of an artificially increased exchange rate that also covered the payment of interest; - the amounts paid in excess (the interests) were presented as a special premium to compensate the risks of the loan operation under the justification that the debtor was a bad payer; - what are now called "ghost companies" were also used. Significant amounts were lent to firms that did not have a real functional role, and then the creditors received a so-called profit from the debtor (which was, in fact, the interest on the loan), even if it did not make any profit and did not carry out no activity. In essence, all these tricks were intended to deceive the authorities into transfers of the amounts obtained fraudulently, generally through tax evasion.