Which are social/economic consequences of money laundering? (Choose two.)
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A. B. C. D. E.BC
https://www.fatf-gafi.org/faq/moneylaundering/#:~:text=As%20for%20the%20potential%20negative,and%20exchange%20rates%20due%20toMoney laundering can have various social and economic consequences, some of which are described below:
Weakening of financial institutions: Money laundering undermines the integrity of financial institutions by making them vulnerable to criminal activities. Financial institutions that are involved in money laundering can face regulatory fines, loss of business, and reputational damage. Additionally, money laundering can cause a decrease in public confidence in the financial system, which can lead to a decline in investment, economic growth, and financial stability.
Increase in corruption and organized crime: Money laundering provides criminals with a means to legitimize the proceeds of their illegal activities, which can be used to finance further criminal activity. This can lead to an increase in corruption and organized crime, as criminals use their illicit funds to influence government officials and law enforcement agencies, and to expand their criminal networks. In turn, this can lead to an erosion of the rule of law, a decline in public trust in government, and an increase in social unrest.
Civil war and weakening of the country's infrastructure are not typically considered as direct consequences of money laundering. However, the effects of money laundering on financial institutions and organized crime can indirectly contribute to these outcomes, for example by reducing the government's ability to provide essential services or increasing social inequality.
Increase in tax revenue is also not a direct consequence of money laundering, as it involves illicit activity that is not subject to taxation. In fact, money laundering can decrease tax revenue by enabling individuals and companies to evade taxes on their illegal profits.