PREVENTION OF MONEY LAUNDERING IN THE BANKING SECTOR

Abstract

One of the key issues in the organized crime world is the financing of criminal activities. Therefore, to successfully provide the necessary means for criminal actions, it uses various illegal methods and crimes. The money laundering attempts to hide the trace of money acquired through the act of a criminal offense in a way that it is inserted into legal cash flows. For this purpose, banks are often used in many ways - through deposits, money transfers abroad, and payment of counterfeit bills, credit transactions, and similar actions. Also, the so-called correspondent banking should be mentioned here, which effectively traces money in the co-operation of several banks. The central place of this work is the prevention of money laundering by the abuse of the banking sector. This is achieved through a strong control of the banking sector and operations by the central bank, then by drafting and adopting legislation and bylaws, which regulate mechanisms for reducing money laundering and financing terrorism and organized crime through financial institutions. The Central Bank is tasked with issuing recommendations for the improvement of the money-laundering system, cooperating with specialized bodies working on the prevention of money laundering, both at the national and international level, direct control over the taxpayers, and contacts with them. In the system of the Republic of Serbia, the National Bank of Serbia has the role of a supervisor in the banking system. In the case of detection of weaknesses in this system, the National Bank shall take appropriate steps in the form of correction of the minor system of money-laundering prevention and take corrective measures, following the legal regulations.