Gamut of a modern crime
CRIME AND MONEY LAUNDERING — The Indian Perspective: Jyoti Trehan; Oxford University Press, YMCA Library Building, Jai Singh Road, New Delhi-110001. Rs. 450.
WRITING ON crime is a favourite pastime of many policemen-turned-scholars. Sadly, some of them are too drab and verbose for the average reader. Once in a while comes our way a work that is relevant, focussed and sensible and is couched in a comprehensible language.
Jyoti Trehan, a senior police officer from Punjab who was with the CBI as well as the Interpol, draws on his rich professional experience to write crisply about money laundering, an evil that has assumed menacing proportions.
Ever since it was used for the first time in the U.S. in the prohibition days of 1930s, the term has been linked to a wide range of crimes, such as drug-trafficking, public servant corruption and a host of financial frauds. Since investigation is complex and the odds of getting caught are not that high, individuals and organised gangs indulge in this unlawful activity with absolute impunity.
Combating the crime
The international community has woken up to the danger of permitting money laundering go unchecked. Collaboration to evolve a strategy to fight it has taken many forms. These include the Financial Action Task Force (FATF) that came into being in 1987 thanks to the initiative taken by the G-7 nations. Its membership is expanding rapidly giving the hope that launderers will be hunted down faster than before.
The FATF's 40 recommendations contemplate many strategies to fight the evil and impose specific obligations on member-countries, including the drafting of practical laws. India's Prevention of Money Laundering Act 2002 is an example.
Its definition of money laundering as "any process or activity connected with the proceeds of crime and projecting it as untainted property" may appear too simplistic to describe a complicated offence. It nevertheless provides a good framework with which to begin.
`Organised crime'
The author aids easy reading for the uninitiated by first describing the current international crime scene. "Organised crime" receives fair attention from him. Some criminologists are derisive about the terminology, because, except where only one perpetrator is involved, in almost every other crime, there is collusive action on the part of several minds.
Viewed from this perspective, "organised crime" is used rather loosely by many. We need to ignore this distortion and generally look upon it as a reference to crimes such as smuggling, betting, trafficking in human beings and counterfeiting, all of which requires a sizeable number of persons to come together for preparation as well as commission.
This scholarly work covers the whole gamut of money laundering. The chapters "Basics of money laundering" and "Mechanics and typologies" are perhaps its most informative parts. Trehan handles these two areas with great dexterity, so that what he conveys would arouse the curiosity of the average reader and not put him off through abstract statements.
Intense economic activity is the hallmark of our times. The globalisation slogan has nearly totally eliminated borders between nations, making physical contacts between criminal elements a lot easier than a few decades ago.
The ushering in of the cyber space, especially the platform that it provides for e-commerce, has further facilitated a meeting of minds to plot criminal conspiracies. It is this ambience which promotes stark permissiveness that leads to crime and the ingenious hiding of its proceeds. Invoice manipulation, export-related crime, and frauds in the securities market, all have a money laundering connotation that is hard to ignore.
Implications
We are aware of the incredible expansion of the underground and parallel banking system. No other development has so much of an impact on crime. It offers a ready and attractive channel to convert ill-gotten money.
A wide spectrum of criminals exploits this facility in order to send money across to safe havens beyond the reach of law enforcement agencies.
The whole chapter on the implications of money laundering for national security should stir those involved in policy-making.
Terrorist groups need large sums of money and are known to send money derived from crime such as trade in narcotics and extortion to various locations in the world for the purpose of local expenses as well as laundering.
It is known that the dreaded Al-Qaeda had used open banking channels until 9/11 to move funds from one country to another. The surprising resort to legitimate channels is attributed to the existence of lawful businesses owned by crime syndicates and terrorist outfits under assumed names.
If there is one reason why we need to intensify international action against money laundering, it is because unlimited availability of laundered money directly facilitates global terrorist networks.
Trehan's treatment of a vital aspect of modern crime, that money laundering forms part of is exhaustive. It is written with clarity, responsibility and a sense of mission.
A whole range of law enforcement professionals and policy-makers would benefit greatly from it. I look upon it also as valuable training material.
R. K. RAGHAVAN
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