MONEY LAUNDERING: Extent of Money Laundering through Credit Cards Is Unknown
Abstract
Money laundering-the process of disguising or concealing illicit funds to make them appear legitimate-is a serious issue, with an estimated $500 billion laundered annually, according to the United Nations Office of Drug Control and Crime Prevention. The terrorist attacks of September 11, 2001, heightened concerns about money laundering and terrorist financing and prompted the enactment of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism, (USA PATRIOT) Act of 2001 (the Patriot Act).1 The goals of the Patriot Act include strengthening measures to prevent the supply of terrorist funding and strengthening the ability of the United States to prevent, detect, and prosecute international money laundering. As part of the subcommittee's efforts to combat money laundering, you asked us to review the vulnerabilities to money laundering that may exist in the credit card industry and the industry's efforts to address such vulnerabilities. Money laundering has three stages: placement, where illicit cash is converted into monetary instruments or deposited into financial system accounts; layering, where the funds are moved to other financial institutions; and integration, where these funds are used to acquire assets or fund further activities. The credit card industry includes: * credit card associations (associations), such as VISA and MasterCard, which license their member banks to issue bankcards, or authorize merchants to accept those cards, or both; 2 * issuing banks, which solicit potential customers and issue the credit cards;
Document Details
- Document Type
- Technical Report
- Publication Date
- Jul 01, 2002
- Accession Number
- ADA405152
Entities
Organizations
- United States Government Accountability Office