THE LAUNDERING BUSINESS
The term “money laundering’’ describes the process by which criminals disguise the original ownership and try to get away with their illegal sources. In a country like India which is filled with corruption, money laundering is a very common business. From politicians, celebrities, cricketers to religious priests everyone has mastered the art of money laundering.
There are three basic steps which are involved in this process:
1) Placement -It involves the introducing of cash into financial systems.
2) Layering –This means carrying out complex financial transactions to camouflage the illegal sources.
3) Integrating-This focuses on acquiring the wealth generated from the transactions of illicit funds.
According to the Government of India, the transfer, conversion, disposition, movement, either directly or indirectly of illegal money is considered to be a criminal offence, which is legally punishable. Other sources of money laundering are tax evasion, evading of international sanctions , terrorism financing . extortion ,insider trading , drug trafficking and gambling .The Parliament of India in the year 2002 introduced the Prevention of Money Laundering Act, which focuses on preventing and punishing this business. In 2013 India was ranked in the 70th position in this regard.
Many regulatory and governmental authorities issue estimates each year for the amount of money laundered, either worldwide or within their national economy. In 1996, the International Monetary Fund estimated that two to five percent of the worldwide global economy involved laundered money. The Financial Action Task Force on Money Laundering (FATF), an intergovernmental body set up to combat money laundering, stated, “Overall, it is absolutely impossible to produce a reliable estimate of the amount of money laundered and therefore the FATF does not publish any figures in this regard.
According to the law, the punishment for money laundering can vary from fine, imprisonment from a period of 3 to 7 years to confiscation of property and money to a period of 180 days. The case is first lodged in a High Court, which is then after enquiry forwarded to the Supreme Court, it is here where the decision about what should be done is made; but without substantial amount of proof nothing can be done.
Many regulatory and government authorities estimate each year the amount of money laundered either worldwide or within their national economy .In 1996 the International Monetary Fund estimated two to five percent of the worldwide global economy involved laundered money . In a country like India it is impossible to completely eradicate the concept of money laundering but with honest workers and the proper government control along with the support of media is sure to reduced the impact in an substantial way.