Financial monitoring as an element of State control

Abstract

In this article the author considers modern problems of establishing international controls over financial flows to prevent criminal permutations and circulation of money laundering transactions and the concealment from tax authorities of beneficiary countries. It examines the role of international organizations in strengthening the fight against money laundering and illustrates that central mechanism for anti-money laundering systems are measures of initial financial monitoring, which should be extended and applied to financial and non financial organizations projected as intermediaries whilst in the process of performing operations with commodities such as cash, securities or otherwise highly liquid assets such as: real estate, precious metals and stones and products of a similar nature. The author emphasizes that such institutions as banks, securities market participants, insurance, microfinance and leasing companies, postal organizations and providers of money transfers transactions, pawnshops, casinos and operators in the market of precious metals and stones, must thoroughly examine and probe their customers and the beneficial owners as well as to assess the risk of their operations in being utilized for the purpose of the legalization of criminal or otherwise illegal monetary gains, or other exercises such as terrorist financing and afterwards be compelled to promptly inform the financial intelligence authorities about, suspicious operations or transactions exceeding certain threshold values. The article concludes that the mechanisms of the FATF have proven as being effective and are now used by other international organizations. The group has grown into an influential force capable of being able to apply pressures on countries so as to improve the transparency of their financial systems.