How Much Banks Spend on Anti-Money Laundering

in Business Risk, Transnational Crime

According to previous estimates by security agencies and the financial industry, between $1.5 Trillion to $2.5 Trillion is laundered around the world each year.

In order to combat terrorist financing, drug trafficking profits and tax evasion, countries have implements various financial regulations and created inter-governmental bodies such as the Financial Action Task Force. In order to comply with the anti-laundering regulations, financial firms and banks in the United States spend an estimated $7 Billion per year in compliance measures.

The results from these measures leads to a 0.2 percent seizure rate of laundered money in the United States.

One reason given for the difficulty of seizing illicit funds is due to the small amounts needed to create terrorism. According to Bloomberg, the September 11 attacks cost less than $500,000 to plan and implement. The Al-Qaeda attacks in Madrid and London cost $100,000 to carry out.

(See more money laundering statistics.)

Source:  Charles Kenny, “Why the World Is So Bad at Tracking Dirty Money,” Bloomberg Business, February 23, 2015.

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