Despite a slew of laws and regulations that aim to eradicate money laundering, cases of it occurring among private and public organisations continue to be reported. Despite this, however, an increasing number of countries and territories appear to be willing to step up and join the fight against money laundering. For example, South Carolina has become the last state in the United States to introduce a piece of legislation designed specifically to tackle money laundering.
The new law, which comes into effect in June 2017, will see the South Carolina’s Office of the Attorney General assume responsibility for tracking all money transfers. This process will include the registration of all money lenders as well as the tracking of all money and wire transfers going in and out of the State.
It is hoped that the new law will go some way to addressing an escalating drug problem in parts of South Carolina. One recent investigation revealed that local areas such as Myrtle Beach had become something of a supply hub for drugs such as heroin, with approximately US$700 million allegedly leaving the State and heading to cartels in Mexico.
According to local media outlet News 13, arrests for heroin doubled in Horry County between 2010 and 2015, while it has been estimated that three Horry County citizens die each week as a result of a heroin overdose.
The money laundering efforts being implemented by South Carolina ought to be mirrored by all organisations, including those not operating in the financial industry. All companies need to carefully scrutinise all financial transactions but particularly those involving large amounts of money. Examples of suspicious activity that should raise red flags include companies:
- falsifying financial statements by overstating sales
- filing falsified tax statements
- transferring money from bank to bank or from account to account
- breaking up large amounts of money into small bank deposits
- reopening operations under a new name to hide a previous bankruptcy.
Companies can effectively manage the integrity and compliance risks associated with money laundering by utilising screening solutions. These can help companies by ensuring that they:
- are not partnering with a person or company or employ someone who has been identified as engaging in money laundering
- are not financing criminal activity
- are taking steps to mitigate the heightened money laundering and corruption risks of working with a politically-exposed person or state-owned enterprise