Money Laundering: National and International Legal Regime

Abstract

The international drive against money laundering has led to pressure for homogenization of substantive criminal law and enforcement mechanisms as among countries, and in doing so it helped recast relationship that existed between various nation-states. Sovereignty has no role for criminals, as they use borders to their advantage, knowing fully well that following the money trail is harder when several other countries are involved. The money launderers do not elect jurisdiction based on the return the illicit funds could fetch, but rather choose less regulated jurisdictions. Despite the fact that various countries have different criminal codes, it is important to find a common definition of money laundering. Loopholes through which money launderers escape continue to persist as a result of the discrepancies in the present legal structures that exist between countries. The legal regime surrounding money-laundering, however, has developed without the sort of transparent and principled public analysis, which would have been essential for the provisions of substantive criminal law. Research reveals that legal measures are not harmonized worldwide. It is frequently taken for granted that if laundering were to be more difficult, there would be substantially fewer predicate offenses. This is by no means self-evident. Even if there were to be perfect enforcement of laundering offences, the profits to be made from drugs are such that there would still be ample incentives for dealers to simply hold the money in cash until they are ready to use it. Despite existence of a sound Anti Money-Laundering legislative mechanism in India, there is constant need to amend the Anti Money Laundering laws to meet the needs of the dynamic society and to ensure that it is at par with the international standards. The Prevention of Money-Laundering Act, 2002, since its inception, has been amended over 10 times. This itself portrays that the laws needs to analysed in order to address the existing loopholes and to track the money trail in order to make it more effective. Thus, there is a need to review the basic legal requirements identified by the various International Institutions and to examine the legislative and institutional measures taken 10 by various International Organisations to combat money-laundering and nuances of money-laundering law in India.