A critical analysis of the requirements introduced by the third money laundering directive and their implication for privacy and confidentiality

Abstract

There is a strong belief among most countries that economic crimes, including money laundering constitute a serious threat to national economies and respective governments. Economic crimes can have a devastating effect on a national economy since potential victims of such crimes are far more numerous than those in other forms of crime. Economic crimes such as tax evasion, company fraud, corruption and manipulation of the stock markets have also a potential adverse effect on people who do not, prima-facie, seem to be the victims of the crime and are therefore ‘anonymous victims’. Therefore, economic crimes constitute a serious threat to the national economy and system of governance. It is for these reasons that it is of vital importance to provide incentives to clearly identify and combat economic crime on a national and international scale. Hence countries are required to assess the efficiency and transparency of the legal systems they have adopted. Due to the incessant increase and rich variety of forms of economic crime and the impressive sophistication of money laundering operations and techniques, it has become necessary to take cognizance of the strategies adopted and pursued by various governments, in order to counter the offensive of organized economic crime. By its very nature, money laundering occurs outside the normal range of economic statistics as it is very difficult to come up with any accurate estimates of the extent of money laundering globally. Nonetheless it is evident that the amount of money involved in money laundering has drastically increased especially with respect to funds derived from drug and fraud related crimes.