The diamond industry can act as an important gateway for money laundering and moving the proceeds of crime into the financial system, according to the Financial Action Task Force (FATF). The standard setter has released a major new report which sets out a number of red flags for regulated institutions that deal with the diamond industry. The 148-page report said the changing face of the diamond industry meant that traditional methods of detecting money laundering and terrorist financing might no longer apply. It said that new "creative" methods were being used to exploit the diamond trade for the purposes of money laundering and terrorist financing. The report said that the international nature of the industry made it complex and therefore susceptible to money laundering. It said the anonymous nature of transactions meant that diamonds were difficult to trace when used as currency. FATF said that, as a commodity, diamonds were vulnerable to the different laundering techniques used
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