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What Are The Negative Effects Of Money Laundering

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 Negative political effect of money laundering: 1. Money laundering leads to political unrest and distort of democratic environment of the society as people with illegal income are promoted to higher positions or have influence on them((Johnson,1993). 2. Money launderers finance internal and regional conflicts and provide them with arms and assistance to promote religious and racial fighting and coops and to generate political, social and economic collapse. The Second World War, gulf war, collapse of communism are all good examples. 3. Any country that get a reputation of high rates of money laundering is vulnerable to losing its credibility and is subject to international sanctions which may include its imports and exports and even its investments. This has been confirmed by many studies that there are many negative effects from money laundering on the society and that such type of crime harms the state and its political structure, national economy, ethical system of the society where money launderers become the most influential and masters of the society.  …show more content…

Giving legitimacy to monies from illegitimate sources shall have big and negative harms on all different sectors of the economy including: 1. Effects of money laundering on financial and banking sector: Money laundering affects financial and banking sectors since such illegal monies threaten their stability and shakes their trust and hurts their reputation in addition to other consequences. Such illicit operations also lead to collapse of stock markets which receives these illegal funds resulting in sudden sale of stocks and leading to large decrease of share prices(Sultzer,1995)

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