Money laundered through real estate, vehicle sale and offshore companies

In its 2018 report on trends and challenges in fighting against money laundering, the Ministry of Finance’s Anti-Money Laundering Administration says that the most widespread money laundering activities have been noticed in real estate sector (investing in construction), purchase of cars, doing business via non-resident accounts, tax evasion and trading in cryptocurrencies.

Investing cash in developing real estate is described in the report as “an ongoing phenomenon whereby the cash of unknown origin, including that generated through organized crime and other criminal activities, is laundered through real estate”.

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The Administration also mentions financial operations carried out via non-resident accounts as susceptible to money laundering. This is done through “transferring money from non-resident bank accounts, which is done by both foreign legal entities and individuals in Serbia, as payment for fictitious goods or services”. This is called ‘carousel fraud’ and it is a complex and lucrative crime involving fraudulent traders (often from several companies) acquiring goods free of VAT. In many cases, the goods are small but high-value items, such as computer equipment.

In terms of money laundering in external trade activities, the Administration cites the fact that “substantial amounts of cash are spent on importing and trading in vehicles in the domestic market” and adds that the import of used cars was extremely high in 2018.

In the segment of importing and trading in cars, the Administration noticed that huge cash loans have been approved to car traders for the purpose of covering their liquidity since, apparently, “car traders cannot cover their incurred liabilities from the revenue they generate from selling cars alone”. This raises suspicion of rigged trading.

As a hypothetical threat to money laundering lies in trading in cryptocurrencies due to the fact that the fluctuations in the value of this type of currency are very frequent and pronounced.  The financial authorities are concerned about the huge amount of money that is converted into the cryptocurrency.

An additional threat comes from a fair amount of anonymity in the chain of trading and possession of virtual wallets, which is a tempting opportunity for criminal organizations to engage in money laundering.

The Administration thinks that the cryptocurrency flow, the participants in trading in cryptocurrency, and the trading process should be strictly monitored.

(Vecernje Novosti, 08.04.2019)

This post is also available in: Italiano

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