Economics impacts of money laundering

: a comparative analysis between Portuguese and British realities

Abstract

Money Laundering is a global phenomenon with social, political and economic consequences which impacts on the capacity of societies and businesses negatively. The existence of illicit flows generates economic distortions such as the erratic use of there sources, disinvestment on licit economy, the weakening of the banking sector, the loss of attractiveness for FDI or the promotion of criminal activities. In the private sphere, there are also several cases of businesses seriously harmed by Money Laundering operations. In this context, it is important to know the consequences of Money Laundering in both governmental and private fields, as well as understand what can be done to combatthis phenomenon. This Dissertation is based on data collected for two different countries, Portugal and UK, where it is possible to observe some differences and, consequently, getsome clues about what can really matters to prevent Money Laundering. As conclusions, this Dissertation desires to demonstrate that countries with efficient legal systems and economically more oriented tend to achieve better results combating Money Laundering, which consequently increases the capacity of these countries to attract FDI, reduce corruption or squeeze the volume of transactions in Shadow Economy. Not surprisingly, the private concerns are similar. Nowadays, Financial Institutions really care about compliance issues in order to prevent fees and other penalizations, but most important than that, they truly need to prevent reputational crisis. Hence, for the countries where investors are more sensible to these aspects, privates also seem to be more aware addressing compliance norms.

Date of Award	2011
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Miguel Trindade Rocha (Supervisor)