Electronic Trade and Money Laundering :: Economics

Electronic Trade and Money Laundering ELECTRONIC TRADE — FEATURES AND EXPECTATIONS Electronic trade is a reality that reveals and promises both rapid and exponential growth. Its constant progress, as well as increasing innovation in electronic payments, has for long been the subject of wide attention, especially for regulatory bodies, in respect of the opportunities for money laundering that these new instruments can provide, and of the responses that regulatory systems can and must develop in their regard. Detailed reports on the wholesale implementation of the new payment systems are available from the Bank for International Settlements. These reports show that, with greater or lesser speed, such systems are taking on a global dimension. Innovation continues incessantly; and rumours spread every day about the development of newer instruments, residing even in the most familiar tools such as mobile telephones." Aside from unpredictable shocking events, which could thwart the advance and availability of technological resources, electronic trade is eventually likely to become the norm, at least in the most advanced countries. It will spread over all markets, just as other instruments — cars, household appliances, telephones — have done before, because it is equally effective, cheap, and within everybody's reach. The main factors still inhibiting widespread diffusion are security risks — such as problems of transparency and symmetry of information; a need for defence from intrusive technologies; a call for guarantees against threats deriving from fraud, embezzlement, counterfeiting, false identities and privacy. These risks are likely to be scaled down, as the diffusion of the new instruments enlarges the market in such a way as to make lawful behaviour thoroughly prevail — which in turn will make the market itself more reliable. Under such conditions, obstacles and constraints that interfere with market development will not be able to resist its inner pressure, or will turn into discriminations and losses in commercial competition, which is positively unwelcome for the economies involved. It is certainly not by chance that in this matter the governments of many countries have so far shown a 'wait and see' attitude. NEW INSTRUMENTS AND MONEY LAUNDERING RISKS In its broadest sense, money laundering includes whatever activity is apt to disguise the source of illicitly earned wealth, dissolving the tracks that can lead back to it. To this goal, whatever means the economic and financial system can supply is beneficial. Experience has shown that money launderers prefer environments featured with poor control, high risks that justify high losses and profits, multiplier effects, little transparency and thus asymmetric information, ease of manipulation, chance of connivance or illicit profit sharing. In this perspective, the internet is an ideal environment. The access to new technologies is more effective, and at