| The topic of money laundering, covered in the comprehensive book Crime and Money Laundering: The Indian Perspective, authored by Jyoti Trehan, IPS, has attracted global attention in a particularly intensified manner after the 9/11 terrorist attacks in the US.
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| Money acquired by illegitimate means and by indulging in criminal activities, which is then camouflaged through money laundering as legitimate income and used to fund further licit and well as illicit activities, using the instrumentality of financial intermediation vehicles such as banks, stock markets, insurance and pension funds, etc. has been posing serious challenges for both internal security as well as economic and social stability.
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| The use of money power in political processes including elections, in subverting and distorting economic policy decisions, in thwarting law and order enforcement and vitiating the proper exercise of state authority in different spheres, has become endemic and has brought about serious disruption in the peace, stability and progress of states around the world.
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| The author has meticulously documented the wide variety of money-laundering activities in virtually all parts of the world, as well as the legislative, regulatory and enforcement efforts made in many of the leading countries to cope with this menace.
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| He has also brought out the lacunae noticed either in the statutes or regulations, and even more so in the enforcement efforts, which have weakened the fight against the adverse effects of money laundering.
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| By citing legislative and enforcement practices prevailing in many countries, he has provided a template for learning from the experiences of others, both positive and negative, for national authorities who wish to tighten their own systems for a more effective combating of the problem.
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| Writing like a thorough professional, the author has not shirked from calling a spade a spade and from voicing his reasoned criticism of the many significant loopholes which have been left in the recent Indian legislation, on the subject.
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| The author has delineated the difficulties and challenges posed by the spread of the modern system of electronic banking and instantaneous global communications, which can result in an immediate transfer of funds of questionable origin from one jurisdiction to another.
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| He has written about the many tax havens in different parts of the world and the unethical complicity of some accountants, lawyers, bankers, and investors who lend their professional expertise in laundering illegitimate proceeds into ostensibly legitimate financial resources.
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| The book also highlights the need for an effective networking between enforcement organisations in different countries on a bilateral, regional, and global basis. Pre-emptive information exchanges regarding potential money-laundering activities and transfers of laundered funds can help enforcement authorities to take timely action against offenders.
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| The confiscation of such laundered funds and properties acquired therefrom has also been suggested as a powerful deterrent against money launderers by denying them the opportunity of enjoying the fruits of their ill-gotten gains.
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| Specialised training for enforcement staff has rightly been cited as an important requirement.
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| Above all, it has been mentioned that strong political will is necessary to enforce anti-money-laundering measures within any national jurisdiction, in an effective and telling manner.
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| Where this will is lacking, there may well be a cogent and comprehensive framework of legislative and regulatory measures but that would remain confined to paper rather than being translated into ground reality.
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| One of the dimensions of money laundering, making it a very difficult problem to tackle, is the substratum of criminal and illegitimate activity which underlies every society.
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| While there are a large number of law-abiding persons who earn their livelihood by legitimate means, pay their taxes, and conform to the obligations of good and responsible citizenship, there is, unfortunately, another section of society which habitually indulges in wrongful activities for securing monetary gains, notwithstanding the efforts of law makers and law enforcement agencies, to curb their notorious practices.
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| Within a country, if enforcement is found to be tight in one area, such operators often shift their operations to other areas where enforcement is relatively lax.
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| At the international level also, with massive money transfers taking place through trade, investment, and other economic transactions, people indulging in criminal activities for monetary gain can quickly shift their operations from areas of stricter law enforcement to those having weaker enforcement.
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| This cat-and-mouse game between the enforcers, on the one hand, and mafia/criminal elements, on the other, can never be altogether put to a halt.
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| Its incidence and effects can only be mitigated and moderated in particular jurisdictions where there is strong political will, backed up by appropriate statutory and regulatory frameworks, and well-coordinated, professionally competent enforcement operations.
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| The contest between the ingenuity of the criminal and the ingenuity and motivation of the enforcement agencies will, no doubt, endure.
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| Despite the above somewhat pessimistic outlook, the value of Jyoti Trehan’s book lies in the clear delineation of this complex field of activity. The book embodies a remarkably comprehensive survey of global money laundering, as well as of the measures put in place in many leading countries to cope with this serious problem.
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| It should serve as a valuable source of reference for legislators, regulators, enforcement officials, and the enlightened public who are concerned at the adverse effects of money laundering, both in the national and global contexts.
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The author deserves to be warmly felicitated for writing a book on this abstruse subject, combining a global sweep with minute insight into the multifarious modalities by which money laundering is carried out, as well as the many measures which are either being adopted or can be adopted to control and mitigate its ill effects.
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| Crime and Money Laundering
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Jyoti Trehan
Oxford University Press
Price: Rs 450
Pages: 253
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| (The author is a former Union commerce secretary. |
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Content Guide
