Money Laundering

I.A. Money – The Root of the Problem:

The primary function of money is to serve as a medium of exchange, and as such it is accepted without question in final discharge of debts or payment of goods or services.3

The term ‘money’ generally includes banknotes as well as coins, although it may be limited to such of each as are legal tender at the time and place in question4

. The precise meaning of the term depends upon the content in which it is used so that, for example, it

1Lewis H. Lapham (b. 1935), U.S. essayist, editor. Money and Class in America, ch. 8 (1988), the

Columbia Dictionary of Quotations.

2

Mohandas K. Gandhi (1869–1948), Indian political and spiritual leader. Harijan (28 July 1940), id.

3

Moss vs. Hancock [1899] 2 QB 111 at

Money Launderers accumulate enormous profits through drug trafficking, international frauds, arms dealing etc. Cash transactions are predominantly used for Money Laundering as they facilitate the concealment of the true ownership and origin of money. It is well recognized that through the huge profits the criminals earn from drug trafficking and other illegal means, by way of money laundering could contaminate and corrupt the structure of the State at all levels, this definitely leads to corruption. Further, this adds to constant pursuit of profits and the expansion into new areas of criminal activity.

Through money laundering, organized crime diversifies its sources of income and enlarges its sphere of action. The social danger of money laundering consists in the consolidation of the economic power of criminal organizations, enabling them to penetrate the legitimate economy. In advanced societies, crime is increasingly economic in character. Criminal associations now tend to be organized like business enterprises and to follow the same tendencies as legitimate firms; specialization, growth, expansion in international markets and linkage with other enterprises. The holders of capital