Sentence Correction

This question is primarily testing IDIOMS, with minor (and annoying) issues of the subjunctive.

I have reposted the question with a minor correction of what I believe was a typo:

The globalization of financial-services companies has been a boon to money launderers, because of allowing money placed in a bank in a less regulated jurisdiction to be transferred to a branch in a more regulated one.

A) of allowing money placed in a bank in a less regulated jurisdiction to be transferred
B) of allowing the transfer of money placed in a bank in a less regulated jurisdiction
C) it allows that money placed in a bank in a less regulated jurisdiction is transferred
D) it allows the transfer of money have been placed in a bank in a less regulated jurisdiction
E) it allows money placed in a bank in a less regulated jurisdiction to be transferred

Any time an underlined portion begins with a preposition - especially if some answer choices contain a preposition and some do not - it's likely that the GMAT is testing IDIOMS.

BECAUSE + OF must be followed by a noun only:
Because of you, I never strayed too far from the sidewalks... (remember that song?)

BECAUSE + [no preposition] will be followed by an action - a clause. Compare these two:
I couldn't play kickball because of my sprained ankle.
I couldn't play kickball because I sprained my ankle.

Since we're discussing the action of allowing the transfer of money, we shouldn't use OF. Eliminate A and B.

D contains a violation of subject-verb agreement: "the transfer of money have been placed..."

Between C and E, we have two different idiomatic structures: ALLOW THAT and ALLOW TO. Both of these could be correct, but in different contexts.

ALLOW THAT is not very common in modern English, though it may still be considered correct by some grammarians. It is used primarily in the context of acknowledgment / belief: "I allow that she is very accomplished" = I admit or acknowledge.

If it's used in the context of permission, it must be used in the command subjunctive:
"... it allows that money... BE transferred..." rather than "is transferred." C is therefore incorrect.

ALLOW ___ TO BE ____ is the much more common version of the idiom. (More common versions of idioms are almost always found in correct answers). The correct answer is E.

I don't want you to worrying too much about memorizing the rules of the command subjunctive. There are only a very small handful of GMAT questions that contain this usage, and fewer that directly test it. And with most of those (as with this one), you can narrow down the answer choices without knowing it.