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  1. What is money laundering?
  2. What offences are criminalized under law 318?
  3. Where does money laundering occur?
  4. What is the role of the SIC?
  5. What are the warning Signs of Money Laundering?
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  1. What is money laundering?
  2. What offences are criminalized under law 318?
  3. Where does money laundering occur?
  4. What is the role of the SIC?
  5. What are the warning Signs of Money Laundering?

What is money laundering?

Money laundering is an illegal act intended to conceal the source or use of illicit funds, by converting cash into untraceable bank transactions. The process goes through three main stages: 
· Placement: the launderer introduces the illegal proceeds into the financial system. 
· Layering: the launderer engages in a series of operations on the illicit funds movements, in order to distance them from their source. This involves using different channels that make reverse tracing impossible. 
· Integration: the funds re-enter the formal financial system, and the launderer can invest the funds in any business of high-value assets

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What offences are criminalized under law 318?

Law No. 318 criminalizes illicit proceeds that are derived from the following offences:

  1. The growing, manufacturing, or trading of narcotics.
  2. Acts committed by associations of wrongdoers, that are specified by Articles 335 and 336 of the Penal Code, and internationally identified as organized crime.
  3. Terrorist acts, as specified in Articles 314, 315 and 316 of the Criminal Code.
  4. To finance or to contribute to the financing of terrorism, terrorist acts, or terrorist organizations, in accordance with the concept of terrorism as defined in the Lebanese Penal Code.
  5. Illegal arm trade.
  6. The offences of stealing or embezzling public or private funds or their appropriation by fraudulent means, counterfeiting, or breach of trust, incumbent on banks, financial institutions, and institutions listed in Article 4 of this Law, or falling within the scope of their activities.
  7. Counterfeiting money, credit cards, debit cards or charge cards, or any official document or commercial paper, including checks."

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Where does money laundering occur?

Money-laundering operations may occur in any business especially: 

· Banks 
· Other financial institutions (insurance, mutual funds, etc.) 
· Money exchange firms 
· Antique dealers 
· Real estate concerns 
· Jewelry dealers 

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What is the role of the SIC?

The role of the Special Investigation Commission on fighting money laundering is to apply the laws and regulations in force. This is done by fostering interagency and global cooperation for fighting domestic and international money-laundering crimes. 
The SIC investigates reported suspicious transactions, with a proactive approach in applying the provisions of Law 318. Cases considered by the SIC as money laundering are deferred to the judicial authorities and to other concerned parties, as specified in the said law. Consequently, banking secrecy is lifted on the accounts involved.

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What are the warning signs of Money Laundering?

  1. Consecutive transactions with total exceeding the threshold limit.
  2. Unjustifiable account activity concerning the size and frequency of transactions.
  3. Frequent deposits followed by frequent withdrawals.
  4. Exchanging large amounts of small denomination bills for large denominations bills (same or different Currency)
  5. Requests for wire transfers or bankers checks in exchange for currency.
  6. High volume of bankers' or travelers' checks deposited into an account with no justifiable reasons.
  7. Maintaining large number of accounts not commensurate with the type of business.
  8. Cashing checks earned from gambling.

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