Globalization of economies along with the ICT revolution is leading to increased financial cyber crimes resulting in Cyber laundering.
Technologies contributing to Money Laundering –
- Crypto-Currency – outside control of the financial system.
- Social Media – Use of Radical ideologies to collect money.
- Identity Theft – Financial information is obtained by Phishing.
- Online Gambling and lottery scams
- Business Email Compromise – prompted to transfer money to legitimate looking accounts.
Globalization and Money Laundering –
- International Wire Transfer Fraud – Emails are hacked to send instructions to banks to transfer money.
- International nature of Organized crimes and lack of regulation.
- Round tripping & Tax Havens – circulation of money across jurisdictions. Ex – Cayman island
- Trade-based money laundering (TBML) – using Transfer Mispricing.
- Prevention of Money Laundering act amended in 2019.
- Enforcement directorate empowered.
- Special courts.
- Formalization and digitisation of Economy.
- International Money – Laundering Information Network – assists law enforcement agencies.
- Financial Action Task Force on Money Laundering (FATF) – Global standards.
- United Nations Office of Drugs and Crime
- Financial intelligence units and Egmont group – exchange of information between financial services institutions.
Money laundering poses a threat to the economic integrity of the country, hence it should be tackled by International as well as national efforts.