The Importance of Fighting with Money Laundering in Iranian Banking System

Applying the precautionary methods by banks could have an important impact on identifying and preventing money laundering operation. The importance of adopting these precautionary measures for banks is very clear because money laundering operations have many negative social and economic consequences, such as economic instability, weakening of government control on the economy, change of investment from production to broker operations, impairing the activitiesof private sector and prevent healthy competition, adverse outcomes in the banking system, increasing the risk of foreign investment, increase inflation and loss of public trustto banks and financial institutions. The use of revenues from criminal activities and itsinvestment creates a kind of unhealthy competition among entrepreneurs and venture enterprises that leads to the weakening of the economy of a community. From the other hand, the money laundering process can cause a false sense in the society indicating that, proceeds obtained by crimes and cleaning them in laundering operation are among lucrative operations that has an improper influence on ethical practice of the society and ultimately is a way to encourage fraud and corruption.