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Clear and Present Danger: Money Laundering and Tax Havens Countries June 14, 2013

Introduction

The most common financial crimes concerned by all government in the world today are Money Laundering and abusive Tax Havens. The social and economic consequences of these crimes are very serious. Schneider and Windischbauer (2008) state that two to five percent of the global GDP (about $590 million to $1.5 trillion) stems from illicit sources need to be laundered[1]. According to American and British government, by tracking money linked to financing of planned attacks, terrorist attacks in Bali and Heathrow was successfully thwarted (Kumar & Campbell 2009). On other hand, abusive tax havens are blamed for hiding untaxed income from both tax authorities and law enforcement (Manning 2005). From those examples, we can see how big the social and economic effects of money laundering and tax havens because they are related with crimes, drugs and terrorism.

This paper will discuss money laundering and abusive tax havens, the characteristics, examples of money laundering and tax havens activities, regulatory reforms, investigations and regulatory activities to combat money laundering and tax havens in Indonesia. (more…)