Analysis On The Cross - Border Money Laundering Of Public Officials And Its Size

With the rapid development of economic globalization, the gradual opening up of financial sector, the strengthening of government, illegal public officials transfers illegal assets which obtained upstream economic crimes to offshore through various channels, in order to avoid the increasingly stringent requirements of anti-corruption investigations and financial disclosure openly. A lot of state assets loss has great negative impact on the economy and society.Consequently, in order to combat upstream economic crimes of public officials effectively, it is urgent to study some issues of cross-border money laundering so that to block the outflow channels of illicit assets. Based on the definition of cross-border money laundering of illegal public officials, this paper studies and analyzes its behavior, the size and scale factors. The specific contents including are as the following:First, on the basis of legal concept comparison of international conventions,the paper found that in the self-money laundering pattern, the not-self money laundering pattern and the hybrid pattern, public officials all do not be considered the subject of the money laundering crime. Combined with analysis of the money laundering behavior of public officials, the paper presents a public officials definition of money laundering crime, and the public officials definition of cross-border money laundering crime, namely "It is the process that illegal public officials possess illegal assets and its benefits through upstream economic crimes, through cross-border capital flows and various other means to conceal and hide the illegal assets’ true origin and nature with the purpose of legalizing them in the form."Second, Cross-border money laundering of illegal public officials is generally divided into three stages which are place, segregation and merge.According to the crime subject of the upstream economic crimes and money laundering whether are the same person, based on the concept of cross-border money laundering of public officials, this paper divides cross-border moneylaundering behavior patterns into self-laundering mode, non-self-laundering mode and combined laundering mode. It also discusses the main channels of cross-border money laundering of illegal public officials are: carry cash;smuggling goods or valuables; underground banks; false cross-border trading and investment; multinational banks; consumption abroad or purchase assets.The new trends for cross-border money laundering of illegal public officials are using specific participant and electronic payment. Cross-border money laundering of public officials contributes to the spread of the upstream economic crime, results in the loss of state assets, damages to the image of country and the government, threats to the reputation of financial institutions and has great impact on financial stability.Third, Public officials are the main part of the Chinese-style cross-border money laundering. Based on the analysis of relationship between cross-border money laundering, capital flight and non-formal short-term capital outflows, we uses scale of non-formal short-term capital outflows as the size of the level of cross-border money laundering. This paper estimates the size of China’s cross-border money laundering by using the direct estimation method, the indirect estimation method and Klein estimation method respectively. Through the comparison and analysis, we make the mean of indirect estimation method and Klein estimation as the size of the cross-border money laundering. The result shows that the scale of cross-border money laundering reaches more than$ 12,000 from 1992 to 2013. In the end, this paper predicts the size of China’s cross-border money laundering theoretically for 2014 and 2015 by use of the regression method.Fourth, this paper lists possible factors which affecting the scale of cross-border money laundering, and then finds the most obvious variables by use of the statistical regression model to analyze these factors. The result shows that there are three factors explain for the scale of cross-border money laundering strongly, which is anti-money laundering supervision, national education level and the national gross domestic product. The GDP improves the scale of cross-border money laundering, anti-money laundering supervision andnational education level dampen the scale of cross-border money launderingAt the end, according to the analysis of the cross-border money laundering behavior of public officials, combined with empirical results, this paper puts forward the corresponding recommendations from the view of legislation,enhance the anti-money laundering supervision and increase awareness of the anti-money laundering.