The risks posed by money laundering and corruption to the global Essay

The risks posed by money laundering and corruption to the global financial system and international business - Essay Example This is because it involves breaching of one’s duty. Moreover, corruption has been linked with money laundering. This is because money laundering entails concealing funds that have been generated through illegal means. Money laundering is often conducted internationally since the concealing of the illegal funds entails transferring it across international borders. The money is then deposited or invested in legitimate institutions to make it appear as if it was generated legally. Therefore, there is need for comprehensive strategies to deal with corruption and money laundering. This is because money obtained through corruption is often used for laundering purposes. Consequently, money laundering and corruption crimes are often interwoven and require to be dealt with concurrently. This essay focuses on analyzing the risks posed by money laundering and corruption to the global financial system and international business. Additionally, the essay will entail identification of the s ufficiency of the current international efforts in dealing these threats. Currently, corruption is considered one of the major obstacles hampering global economic development. This is because it is a major crime affecting many nations and impedes sustainable economic development. Furthermore, corruption is a major global concern since it hampers global business. Moreover, global corruption is more complicated since it requires cooperation of different governments to deal with it. On the other hand, money laundering is considered a major profit driven crime facing international businesses and financial systems. Actually, the corruption and money laundering are closely linked. Moreover, they continue to play a big role in threatening international business operations. This is because money laundering accelerates corruption and vice versa (Lilley 2006; Chaikin & Sharman 2009). Risks Posed By Money Laundering and Corruption to the Global Financial System and International Business In th e past, money laundering was viewed as a means of cleaning dirty money obtained through criminal activities such as drug trafficking. However, it has been realized that money laundering entails more that this and it is a crime. Since most criminal activities involve corruption, money laundering enhances corruption by enabling criminals conceal their activities. The effects of corruption are eminent in social, economic, and politic settings. In case of international business, corruption and money laundering contribute to distortion of the financial markets. This is because these misconducts spread from one financial market to another easily (Chaikin & Sharman 2009). Corruption and money laundering are an international concern. This is because there is increasing imitation of the forms of corruption used from one country to another. In cases where money obtained through corruption mean is transferred and invested in another company elsewhere, the companies involved might start conflic ting. Therefore, corruption and money laundering threaten international business relations since they create international disputes. Such disputes often involve banks (Lilley 2006). Money laundering leads to creation of illegal schemes aimed at concealing unlawfully earned assets. Therefore, it becomes hard for corruption cases to be identified. Therefore, corruption and money laundering affect the judicial system making it hard to prevent cases of corruption, which are hard to detect. Actually, the