"MONEY LAUNDERING"

"MONEY AND MONEY LAUNDERING"

Money is like fire, an element as little troubled by moralizing as earth, air and water. Men can employ it as a tool or they can dance around it as if it were the incarnation of a god. Money votes socialist or monarchist, finds a profit in pornography or translations from the Bible, commissions Rembrandt and underwrites the technology of Auschwitz. It acquires its meaning from the uses to which it is put.

Mahatma Gandhi said: - "Capital as such is not evil; it is its wrong use that is evil. Capital in some form or other will always be needed"

The primary function of money is to serve as a medium of exchange, and as such it is accepted without question in final discharge of debts or payment of goods or services. Money has been regarded as bone of contention between friends and relatives. It is said lend money to a person if you want to spoil him or make foe. Money - wealth, property or estate have always caused family, feuds and even murders for it is said that all is fair in love and war. Money is devil’s child and is responsible for many mischief and evils. Money is the root cause of many evils like corruption, black marketing, smuggling, drug trafficking, tax evasion, and the buck does not stop here it goes to the extent of sex tourism and human trafficking (a human selling another human in the era of human rights). People want more money to cater to their needs and at a point of time they don’t hesitate to have money from any source (black or white who cares). This is the available soft corner where the concept of money laundering enters and prospers.

Money Laundering refers to the conversion or "Laundering" of money which is illegally obtained, so as to make it appear to originate from a legitimate source. Money Laundering is being employed by launderers worldwide to conceal criminal activity associated with it such as drug / arms trafficking, terrorism and extortion. In other words the term money laundering brings to our mind those nefarious activities of the criminals who provide an envelope to “slush funds” in order to exhibit those as genuine money. Money laundering is a process by which criminals give the color of legality and legitimacy to slush funds. Ignoring economic vandalism, most crime is economic crime. In Black's Law of Lexicon the term laundering is being referred to as investment or other transfer of money flowing from racketeering, drug transactions and other sources (illegal sources) into legitimate channels so that its original source cannot be traced.

The major objectives of Money Laundering activities are: Concealing the true ownership of illegally-obtained money and Placement, layering and integration of such funds. Money laundering is the processing of criminal proceeds to disguise its illegal origin. Terrorism, illegal arms sales, financial crimes, smuggling and the activities of organised crime, including trafficking and prostitution rings, generates huge sums. Embezzlement, insider trading, bribery and computer fraud also produce large profits and create the incentive to legitimize the ill-gotten gains through money laundering. When a criminal activity generates substantial profits, the individual or group involved in such activity route the funds to safe heavens by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention. Money laundering is inextricably linked to the underlying criminal activity that generates it. Money laundering promotes corruption and bribery in every sector. Bribe is just like human blood to the tongue of a wild cat, which once gets the taste of it cannot resist killing humans. Thus money laundering is an activity which is capable of corrupting a chain of financial institution.

Money Laundering is the biggest Fear for Finance Industry. The entire industry in the world or any separate country must understand that financial crime needs to be understood, analyzed and fought proactively. Banking Industry needs to be one step ahead of money launderers in order to control the menace of money laundering and financial crimes. Concern regarding financial crime is growing to unprecedented levels amongst UK financial institutions. ML activities threatens national governments and international relations between them through corruption of officials and legal systems. It undermines free enterprise and threatens financial stability by crowding out the private sector, because legitimate businesses cannot compete with the lower prices for goods and services that businesses using laundered funds can offer. Few specific challenges which are posed by the money laundering activities throughout the world includes: - Terrorism, ongoing threat to the Banking System, threat to Economic and Political Stability etc..

Speaking of money laundering apparently “when the dye packs were first introduced by banks a group of bank robbers got caught by them but not in the typical fashion. They were caught because people noticed them putting loads of pink colored cash into the machines at a public laundromat days after the robbery. Seems the dye pack exploded and instead of throwing away the tainted cash they tried to literaly launder it to get rid of the dye job”.



RAMAKANT GAUR
ADVOCATE (MANAGING PARTNER—ACE JURIX)
SUPREME COURT OF INDIA
312, SHAKUNTALA BUILDING
59, NEHRU PLACE
NEW DELHI 110019
09810004702