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All business requires assets in order to obtain goods, deliver them to their customers, and promote sales growth. A criminal enterprise is not different. The drug trafficker’s principal motive is to make a profit from his illicit activities. In order to produce, obtain, and market his goods. The trafficker also needs money to buy silence from witnesses, to pay bribes, expand into other illegal activities, and to move about in order to take advantage of new sources of supply and new markets. He requires funds to entice new prospects into his organization and pay any legal expenses he might incur. Finally, he needs money to support himself in the style which he prefers.

In this sense, assets are at the heart of all businesses. As long as assets go untouched, lost workers, products, and their means of transportation can easily and quickly be replaced. Even with the heads of organization in jail, trusted associates continue the dangerous and deadly business of drug trafficking utilizing the wealth and property left behind. And those imprisoned quickly return to drug dealing after being released, because criminals making huge profits see jail as an acceptable risk as long as they don’t lose their earnings in the process. They can invest their illegal fortune while in jail, and the money, with interest, will be waiting for them when they get out. There is no need to go through the tedious and risky business of starting all over again.

In addition to the obvious detrimental effect of drug traffic on society, the unchecked flow of narcodollars can have a much more insidious effect. In many areas of the world where these drugs are cultivated, processed and sold, the influx of these narcodollars and the subsequent power it provides can substantially affect the economic and political climate of the area involved. Both Bolivia and Colombia have fallen victim to this situation in the past as well as many other countries. In consumer nations like the US, the narcodollar effect on the local community can result in the growth of criminal enterprises. Where drug traffic prospers, other illegal activities, i.e. prostitution, extortion, theft, ect., also flourish. In addition, the vast volumes of untaxed dollars generated by drug traffic help to falsely inflate the prices of certain commodities in local area. Anyone who has ever tried to purchase a high-speed boat or a home on waterway with access to the ocean will see this for himself. The overall result is artificially high prices which damage the local market structure.

There is no one method of laundering money. Methods can range from the purchase and release of a luxury item (e.g., a car or jewellery) to passing money through a complex international web of legitimate business and ‘shell’ companies.

Despite the variety of methods employed, the laundering process is accomplished in three stages which may comprise numerous transactions by the launderers:

a) Placement – the physical disposal of cash proceeds derived from illegal activity.

b) Layering – separating illicit proceeds from their source by creating complex layers of financial transactions designed to disguise the audit trail and provide anonymity.

c) Integration – the provision of apparent legitimacy to criminally derived wealth. If the layering process has succeeded, integration schemes place the laundered proceeds back into the economy in such a way that they appear to the financial system to be legitimate investment funds.

The three basic steps may occur as separate and distinct phases; they may occur simultaneously; or, more commonly, they may overlap. How the basic steps are used depends on the available laundering mechanisms and the requirements of the criminal organizations.