UCMUN 2014 Economic and Financial Affairs Council
Topic B Update Paper: Global Illicit Money Laundering
Written by: Adam Jarvie
Money laundering has been a United Nations issue since 1988 and remains in the news
today. As we already know, money laundering poses a serious threat to global economic interests
and accounts for a staggering 2-5% of the world's gross domestic product. In recent news, money
laundering has appeared in the U.S in Los Angeles and Florida, but to name only two. Japan,
Australia, and the British Virgin Islands, Mexico, South Africa, and Uganda, and others have been
recently been in the news for increasing anti money-laundering laws or exposed monetary frauds.
Because of the raised awareness money laundering is getting, anti-laundering laws around the world
are continually being implemented and strengthened to combat the serious economic threat it poses.
Even though money laundering is a major problem around the world, the main concern is its
use in terrorist organizations. Terrorist groups are some of the most dangerous, and in many cases,
richest groups of organized crime, due to their ability to use money laundering. The group ISIS,
which is currently in Syria and Iraq, has been in control of several major oil fields and refineries in
both countries. In late June ISIS was raising as much as $2 million a day through its oil resources.
ISIS has created its revenue through a complex system of smuggling/covering up money and oil. By
using locals to disperse the illicit funds among a large base of people and away from banks where
funds can be easily frozen and watched, ISIS has managed to foil Western anti-laundering laws. The
instability and weakness of the governmental systems of both the Nations ISIS occupies, only serves
to complicate the issue further.
Another major problem with the global economy and money laundering is the weakness of
laws in developing countries. South/Central America and much of Africa are weak on their laws and
enforcement capabilities to decrease the impact of money laundering. Drugs are a big problem for
Central and South American countries in particular. A common example is Mexico and its affect on
North America. Mexico poses a well-known problem in the world of money laundering due to its
UCMUN 2014 Economic and Financial Affairs Council
Topic B Update Paper: Global Illicit Money Laundering
large cartel and drug trafficking economy. Every year, millions of dollars from illicit drug sales are
involved in laundering throughout Mexico, spreading into the US border states. The previously
mentioned money-laundering problem in Los Angeles stemmed from Mexican drug cartels working
with high fashion in the city. In Africa, problems with money laundering are common as well,
though they aren't as drug related as in the Americas. South Africa has run into issues after some of
its leading banks were fined for lax regulations to prevent money laundering. This scandal affected
international banks including FirstRand, Nedbank Group Ltd, Barclays Plc, and the Standard Bank
Group Ltd. Some of the money involved is thought to be connected to terrorist organizations and
their money laundering schemes. Luckily, while Mexico and South Africa are struggling with issues
in money laundering, there are some developing states making big jumps in anti-laundering laws.
Recently Uganda created the "Financial Intelligence Authority" after a bill recently passed through
its parliament. This movement towards progress is slow but moving a place all around the world as
nations begin to see the problem that money laundering can cause.
UCMUN 2014 Economic and Financial Affairs Council
Topic B Update Paper: Global Illicit Money Laundering
Works Cited
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Mcevers, Kelly. "Feds Monitor LA's Fashion District After Money Laundering Raid." NPR. NPR, 9
Oct. 2014. Web. 12 Oct. 2014.
Nabwiiso, Samuel. "Uganda Anti-money Laundering Agency Starts." Home East African Business
Week Newspaper: The Region's Leading Business Newspaper. N.p., 28 Sept. 2014. Web. 13
Oct. 2014.
Philips, Matthew. "ISIS Loses Its Oil Business." Bloomberg Business Week. Bloomberg, 14 Oct.
2014. Web. 13 Oct. 2014.
Sevastopulo, Demetri. "British Virgin Islands Suffers amid Push against Money Laundering." World
Business, Finance, and Political News from the Financial Times - FT.com. N.p., 16 Sept.
2014. Web. 14 Oct. 2014.
U.S. Department of Justice. "Three Florida Residents Are Charged with Health Care Fraud, Money
Laundering, and Drug Trafficking." FBI. FBI, 10 Oct. 2014. Web. 11 Oct. 2014.
Yenko, Athena. "Australia Cracks Down On International Money Laundering Syndicate."
IBTIMES.com: International Business News, Financial News, Market News, Politics, Forex,
Commodities. N.p., 29 Sept. 2014. Web. 14 Oct. 2014.