Wave efforts to combat it. How to turn suspicious funds into legal wealth?

– What are the steps to introduce illegal funds into the international system?

Placement, layers and aggregation.

What is the amount of illegal money entering the global financial system annually?

It ranges from $ 300 billion to $ 400 billion.

Gang money, drug trafficking, looted government wealth and fraud, all of these illegal funds, which account for about 8% of the volume of international trade, flow with ease to global financial systems despite the procedures and restrictions put in place by governments and international organizations to detect , freezes and prevents movement.

But how does this money enter the global financial system without being discovered? The honor goes here to the smurfs, the victims and the shells.

These three terms are an accurate description of the methods of converting dirty money into regular wealth legally acquired by its owners.

three steps

Before talking in more detail about the task associated with each term during dirty money laundering operations, it is necessary to highlight the steps for introducing money in the international financial system, and this is done through 3 procedures.

Firstly, “placement” and through this step, funds are introduced into the financial system, usually by dividing it into many different deposits and investments, and secondly, “sorting” and by which funds are mixed to create a distance between them and the offenders to create, and thirdly, “merger” which is the last step, which is the return of funds to It is to the offenders as legal income or clean money.

the smurfs

To carry out these operations, fraudsters often use smurfs, mules and shells to integrate their money into the international financial system.

To illustrate, the Smurfs’ job is to legitimize dirty money by depositing large sums of money in different banks using small transactions (dividing the sums into more than one part).

By depositing small amounts of money, the “Smurfs” are not subject to the indicators of local and international control over the sources of funds, and then these funds are transferred through a series of different accounts before being returned scattered to its first owner .


The “victims” are individuals who are employed by the owners of the dirty money to help carry out their schemes, and who may be in the scheme, or may be recruited without their knowledge.

The recruits are usually contacted, often have no knowledge of the plan, and may be tempted by the promise of attractive jobs.

Criminals often target people with no financial supervision, no criminal record, or the financially vulnerable.

One of the responsibilities of the “victim” is to open money and deposit it in bank accounts, money launderers then start making bank transfers and use currency exchange to move money through the financial system to avoid further detection.

The title of “victim” can be given to these persons, because when the crime is discovered, they are among the first to bear criminal responsibility.



As for the “shells”, these are fictitious companies, which are companies that are officially registered in the state and pay taxes on a regular basis, but they have no commercial activity, physical operations, assets or employees, and these companies become exploited by depositing and transferring money into their various accounts without any control over it. .

Apart from these previous methods, the owners of illegal money can hide their money by investing in portable commodities like gems and gold that can be easily transported from one region to another around the world.

As well as investing in valuable assets and selling them with prudence, such as real estate, or resorting to falsifying transactions related to these funds, or gambling.

Other digital methods

In the digital age, new ways of legitimizing dirty money have emerged. These include the use of anonymous online payment services, person-to-person cell phone transfers, the use of cryptocurrencies, online auctions and sales, gambling sites and virtual games.

The International Monetary Fund, in a statistic released last year, estimated the volume of money laundered annually at between 2-5% of global gross domestic product, and 8% of total world trade volume, which is 300 -400 billion dollars. .

Wave measures to combat this

The world is aware of all the previous methods of transferring suspicious funds and turning them into legal wealth, and is taking continuous measures to prevent it, and the Arab Gulf states are also falling within the international system to combat this phenomenon.

In recent years, the Gulf states have enacted their own laws to combat money laundering and terrorist financing crimes, joining regional and international agreements and organizations related to the fight against this transcontinental crime, in addition to imposing procedures on their banking systems that any effort effectively limited. to exploit the Gulf states’ financial system to legitimize crime funds. .

Among the most prominent Gulf measures in this regard are the establishment of the UAE, last August, a court specializing in money laundering crimes, and the signing of agreements with a number of countries, particularly Afghanistan and Turkey, in 2015 to exchange information regarding this type of crime.

Every bank in Kuwait has a department that specializes in combating money laundering and terrorist financing crimes. The Sultanate of Oman abolished any informal money transfer system in the country, and Qatar established the National Committee to Combat Money Laundering and Terrorist Financing in 2015.

money laundering

Basel Index

Regarding the classification of the Gulf countries on the Anti-Money Laundering Index (Basel) issued by the “Basel Institute for Governance” in Switzerland, Bahrain last year 2021 ranked first in the Gulf among the safest countries in the field of money laundering laundry.

Bahrain scored 4.50 points out of 10 points, Saudi Arabia came second in the Gulf region with 5.12 points, followed by Qatar third with 5.88 points, and the UAE last with 5.91 points. To classify the two countries .

It is noteworthy that the degrees given by the classification of countries are from 0 to 10, and the closer the number is to 10 degrees, the greater the country’s sensitivity to financial risks, i.e. zero, becomes the least considered dangerous while 10 the most dangerous.

The classification, which includes 129 countries, measures the risks of these countries in the areas of money laundering and terrorist financing, by evaluating the level of combating them in the country and other related factors, including financial transparency and the effectiveness of the country’s legal system. .

In 2018, Kuwait was fourth in the same index in the Gulf and worldwide 56, which is the latest classification for the Gulf country. As for the Sultanate of Oman, it ranked first in the Gulf and 29 worldwide in 2014, and was not ranked after it.

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