NCJ Number
190840
Journal
Police Chief Volume: 68 Issue: 8 Dated: August 2001 Pages: 57,59
Date Published
August 2001
Length
2 pages
Annotation
This article discusses the difference between capital flight and money laundering.
Abstract
Capital flight originally referred to profits from the international business deals of Russian companies being kept abroad instead of being repatriated to Russia for reinvestment. The term is now used to define all types of money flowing out of Russia and other former republics of the Soviet Union. Since there are no money laundering laws in Russia, this capital flight could only be referred to as money laundering if the funds were transferred to a country that had money laundering laws that recognized extraterritorial predicate offenses. The article stresses the importance of not confusing money laundering and capital flight; the terms are not interchangeable. While money laundering is capital flight, not all capital flight is money laundering. The article claims that, while there is much talk in the law enforcement community about money laundering and Russian organized crime, the laws used to combat these activities are inadequate. Law enforcement agencies should lobby for more extraterritorial offenses to be included as predicate offenses of the money laundering laws in their jurisdictions. Public corruption, bribery, and foreign tax evasion would make powerful additions to the money laundering laws. This would give law enforcement the tools needed to fight the questionable monetary activity known as capital flight.