Tracking Illicit Money: The Move from Financial Money Laundering to Business-Based Money Laundering

Undergraduate Honors Thesis

Citations

Citeable URL: https://scholar.colorado.edu/concern/undergraduate_honors_theses/6m311q66h

Abstract

This paper attempts to show an increase in business-based money laundering when it becomes harder to launder money through the financial sector. To do this, it measures the effect of Anti-Money Laundering (AML) policies in Aruba on the amount of new business establishments in counties with links to offshore accounts in Aruba. Exposed counties and non-exposed counties are compared to show that the number of business establishments in exposed counties are similar to the number in non-exposed counties before changes in AML policies begin. The regression model used is a log-linear model that measures the effect of AML policies on the number of business establishments in exposed counties compared to non-exposed counties. We find that there is a positive correlation between stricter AML policies in Aruba and new business establishments in exposed counties, suggesting that there is an increase in business-based money laundering when policies against offshore accounts become more strict.

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