The Effects of Money Laundering (ML) on Growth Application to the Gulf Countries

The Effects of Money Laundering (ML) on Growth Application to the Gulf Countries

Fakhri Issaoui (University of Tunis, Faculty of Economics and Management, Tunis, Tunisia), Toumi Hassen (University of Sfax, Economics and Management, Sfax, Tunisia) and Touili Wassim (University of Tunis, Economics, Tunis, Tunisia)
Copyright: © 2017 |Pages: 12
DOI: 10.4018/IJCWT.2017010102
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Abstract

The strategic goal of this paper is to study the effects of the prevention policies against money laundering on growth in the gulf countries (Saudi Arabia, Kuwait, Qatar, Bahrain, UAE and Oman) from 1980 to 2014. Thus, the logistic regression (logit model) had given three fundamental results. The first had shown that the main policies in matter of fight against money laundering (anti money laundering law AMLL, suspicious transaction reporting STR, the criminalizing of terrorist financing CTF) have had positive effects on the increasing of probabilities to realize more growth. The second is that the said policies have had positive effects on the increasing of the degree of openness of the whole sample. The third is that the variable (proximity) had a positive and significant effect on anti-money laundering policies.
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Process Of Money Laundering

CD Schaap (1999) usually distinguished three distinct phases in the process of money laundering:

  • Placement Stage: The purpose of this phase is to place cash into a bank account, hiding its illegal origin.

  • Layering Stage (Dispersion/Stacking): to hide one's tracks by complex financial transactions to hide the source of funds or legitimize their possession.

  • Integration Stage: money being laundered and its initial origin is totally hidden. Thus, the investments, in the legal economy, can be beginning.

Methods Of Money Laundering

We will present the most used methods of money laundering:

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