Globally, the phrase ‘money laundering’ means the process of hiding the origin of money obtained from certain crimes, while avoiding the legal consequences for those who committed these crimes. Money laundering is often associated with illicit activities, namely financial frauds, corruption, smuggling, drug trafficking, or extortion. In the absence of global co-operation, money laundering becomes both a sizeable and dangerous phenomenon. According to figures published by the World Bank, corruption generates annually more than USD 1 trillion (about 2.5% of world GDP), which need to be ‘laundered’ somehow.
Just like corruption, money laundering affects all of us, sometimes having serious social and political consequences. It destabilizes the economy of vulnerable countries, compromises the integrity of state institutions, and destabilizes the financial system. As a result, economic growth and development is affected, the tandem of corruption - money laundering being both a cause and a consequence of poverty in many countries. Moreover, without adequate measures, corruption and money laundering can turn into a vicious circle that is difficult to break. On the one hand, money laundering is a way for organized crime groups to get the necessary financial resources for their illicit activities, thus generating corruption; on the other hand, corruption generates resources that need to be ‘laundered’ later.
Money laundering has become a topical issue in the Republic of Moldova as recently the national banking system has been the target of major events of this kind. With a transition economy, a high level of corruption and a poorly monitored financial system, our country has become the target of regional or even global money-laundering groups. All of them had the same starting point, namely when the banking sector was transferred almost entirely under the control of non-transparent shareholders with obscure interests. As a consequence, the most resounding cases of money laundering via domestic banks occurred during this period, specifically the Laundromat case and the frauds at Banca de Economii. Thus, according to some journalistic investigations, subsequently confirmed by authorities, about USD 20 billion were transited from the Russian Federation during 2010 - 2014, which transformed the Republic of Moldova into a vehicle for laundering illicit money and their subsequent transfer to countries of destination. At the same time, along with the Laundromat case, the frauds at Banca de Economii also revealed some money-laundering mechanisms, a fact internationally recognized. The involvement of politically exposed persons, high-level corruption, fraudulent financial means, or the use of off-shore entities are only the major elements that allowed establishing and operating complex money-laundering mechanisms via the national banking system.