is this business model legal or how to make it legal?

a friend asked me my advice on something last night, because he thought i knew.

but a business sending payments for another business, how can they avoid anything related to money laundering or similar?

for instance a business that sends checks or wires on your behalf. is there information you need to get to make it legal? due diligence when handling money, for instance.

my friend is watching this thread, any help would be appreciated

 

I would think this would be legal. Western Union does this and they aren't directly a money lender, or at least they were not originally.

 

It looks like Western Union collects information that it will share with law enforcement if it is subpoenaed.

http://en.wikipedia.org/wiki/Western_Union#Can_be_used_as_money_laundering_tool

Also: http://www.westernunion.de/info/securityIntro.asp

It's a tricky business, though.

The owners of E-Gold were charged with money laundering last year:
http://www.securityfocus.com/news/11462

And just last month the owner of Virtual Money Inc (VMI) was indicted for money laundering:
http://www.boston.com/news/local/co...9/oklahoman_accused_of_laundering_drug_money/

Presumably both businesses had attorneys who advising them on the regulations and best business practices.

 

great post, if you stay on the good side of the law and have reasonable practices, he wanted to know if the govt was going to hassle him

lots of those people went out of biz for some reason or other, ezpay.com was a recent one, for instance

 

Yes, there is in some countries.

But there clearly isn't "one universal answer" to this question. It varies from country to country. Especially at the moment, different countries have widely differing laws about this. You have to keep within the law of the country you're in, yourself (which you didn't specify).

 

sorry about that, im out of the US, so like a normal american, i didnt realize there are other countries on this board

good point, sorry about that

 

What countries do you plan to have it active in?

 

So, like a normal American, when you're in the US you say you're out of the US.

Sorry, I don't know about the US rules. But I think you probably have stricter rules with regard to money-laundering and so on than almost any other country in the world?

 

The best advice would be to check this with an attorney.

 

In most cases, a 'know your client' policy would solve all your issues.
As long you don't pretend to be a financial institute (without having the correct papers) it would depend on your country laws. For the US a KYC policy would fit.

 

thats exactly why i posted this thread, thanks for the excellent response

http://en.wikipedia.org/wiki/Know_your_customer