MONEY LAUNDERING

Written By – Debabala Nayak

Money laundering is one of that methodology by way of which regular income is earned but by ways of illegal tricks or which is considered to be an illegal income. It is considered as an illegitimate method of transferring money obtained from unauthorised acts such as trafficking and then converting it into legitimate source.

We have the role of financial institutions for the control i.e. all those are responsible for the transaction of money may be in huge amount also digitally in this world of technology. It is to be noted that the institutions should have keen observation on the transaction that seem to suspicious. Immediately it should be kept on track and see all the other details attached. It is necessary to note that though the concept of money laundering has been regarded as one single process but we have three steps that make it as one whole crime. The first step is placement i.e. the whole illegal money earned is introduced in the system of finance. The second step is layering which is specifically used for different conversions and transfer of the amount so that the original source is misplaced and there is no trace of the income source. The final stage that is talked about is the integration stage which helps in making the amount as a legitimate income for the people involved in it. From this all we are able to have a clear transaction that for this process to work and show result there will always be a group of people involved like a network. It is not possible for one single person to execute the whole system of conversion of illegitimate amount to legitimate amount.

If we look closely about the transaction that has been enabled by the entire system, the IMF i.e. International Monetary Fund sees around 2 to 5% annually has been contributed for the gross domestic product. The nationalists have been actively involved for their beneficial uses. But the real statistical data is still unknown and things being published are just a factual representation of some calculations. In this digitalised and modern world where cyber crime is increasing day by day and the whole level of hackers being more professionally trained, it is somewhat very difficult to keep all the trace. The system of Government in many parts of the world where specially there are still some countries who are under developed, has to fight for basic rights like food, shelter, clothes and education cannot afford high technological laws for the prevention. Countries that have high denominations of their currency get easily involved with the system of money laundering. It is easier to have transaction and gets modification.

Concerning about the effects of money laundering, having one transaction does not end the process rather it creates the basic plan for the entire process of more illegal activities and more earnings. This illegal money creates way for more trafficking and the profits come from the citizens and the tax payers of the country that is again not a crime for the world. By this the whole financial situation of countries and the world all together is just misrepresented and is ultimately haphazard.

The world saw the money laundering as a global concern that allowed some countries to join hands and create a special force that was called as Financial Action Task Force on Money Laundering. For this crime, we have laws to prevent the happening of Money laundering in our country. The Prevention of Money Laundering Act, 2002 which came into force in the year 2005 for taking necessary actions to prevent the entire system of money laundering. It is such a crime that cannot be prevented by one nation alone and it is considered to be a global issue.