Introduction
Koutilya’s Arthasastra[1] has advice for most of the political and economic situation with reference to the present scenario, he said “Just as it is difficult not to taste honey or poison placed on the tongue, it is difficult for one handling the ruler’s money to refrain from it in at least small quantities”. The implication is that all these who have access to public coffers could have the tendency to misappropriate a part of it.
White collar crime is a non-violent offense that is typically committed by individuals in the business or financial sector. Money laundering, or the practise of converting the proceeds of unlawful activity into seemingly lawful currency, is a serious White-Collar crime. Drug trafficking, financing of terrorism, and unethical practises are all linked to money laundering, which poses a severe danger to the stability of financial institutions and the global economy.
“While the phrase “money laundering” was originally used to describe the transfer of funds by criminal organisations, it has since come to refer to any financial transaction that results in an asset or value by dishonest methods. If the proceeds from the illicit activity are large enough, the launderer will resort to money laundering again in an effort to maintain control of the money while avoiding detection. Criminals often avoid detection by hiding their identities, switching to a new company, or relocating the cash to a less obvious location.”[2]
The focus of money laundering is on the value of the money or other assets obtained illegally rather than the assets themselves.[3] Because crime cannot pay without money laundering, it is an integral part of any criminal enterprise.[4]“In the 1980s, the international community made a concerted effort to combat money laundering and seize the proceeds of crime, especially as they linked to the drug trade.”[5]
Many believe that “going after the money” is the most effective strategy for combating criminal organizations. The first justification is that taking away offenders’ motivation is an effective kind of punishment. The second justification is that major criminals seldom handle actual illegal substances like narcotics, but they do deal with the money made from them, which leaves a paper trail or evidence that may be used to link them to a crime. The third justification is that funding law enforcement by seizing criminal profits would be a win-win situation. The term “criminal finance” is frequently used to allude to money laundering.[6] It raises several civil liberties problems in addition to corrupting markets, shifting an unjust economic burden to the average man in the legal economy, and undermining the stability of international banking[7].The basic goal of the money-laundering procedure is to give the item an appearance of legal purity.This shield protects the subject from criminal, civil, or legal repercussions while also preventing the object’s affiliation with illegal action from being traced and recognized.
[1] The Arthashastra is an ancient Indian treatise on statecraft, economic policy and military strategy, written in Sanskrit, a handbook for running an empire, written by Kautilya (also known as Chanakya, c. 350-275 BCE) an Indian statesman and philosopher, chief advisor and Prime Minister of the Indian Emperor Chandragupta, the first ruler of the Mauryan Empire.
[2] K. Choksi & Co., Overview of Prevention of Money Laundering Act, 2002
[3] Scott, Paul Alan ‘Reference Guide to Anti-Money Laundering & Combating Financing of Terrorism’
– Washington DC, World Bank/International Monetary Fund; p-1-1 (2006)
[4]IMF – December Anti-Money Laundering & Combating Financing of Terrorism inclusion in surveillance and financial stability assessments – Guidance Note; p52012
[5]Commonwealth Secretariat- January ‘International Efforts to Combat Money Laundering’; p-ix1992
[6]Nadelmann, E, ‘Unlaundering Dirty Money Abroad – US Foreign Policy & Financial Secrecy
Jurisdictions’ Inter-American Law Review, Vol-18, Issue-1, USA; p221986
[7]Hinterseer, Kris ‘Criminal Finance- The Political Economy of Money Laundering in a Comparative
Legal Context’ Kluwer Law International, Netherelands; p1(2002)