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According to the think tank Global Financial Integrity’s Transnational Crime and the Developing World report, the global illicit drug market had an estimated size of between US$426 and US$652 billion in 2014 alone. It’s important to know and understand the vast range of money laundering processes within the trade-in narcotics industry.
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In this post, we’ll take a closer look at how drug cartels launder money and how banks are engaged in the process. The drug war in the 1980s prompted governments to implement money laundering regulations in an attempt to trace and seize the proceeds of drug trafficking in order to apprehend drug gangs and banks that aided them. The reason why criminals and terrorist groups need to launder their funds is to legitimise them, before introducing them into the financial system as legal currency. Money laundering and drugs have historically had a close link. Aside from being a financial crime, money laundering is also associated with other types of crime, such as drug trafficking, human trafficking, and prostitution. It is the process of converting illicit proceeds into “clean” money, which cannot be traced back to the original source of income. Money laundering is a type of malicious activity that is practiced by criminals across the globe.