Q.Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels.

Body Analysis

Contribution of Technology & Globalisation to Money Laundering

graph TD
    A["Money Laundering: Methods, Challenges, and Legal Frameworks"] --> B["Legal Measures"]
    A --> C["Emerging Technologies"]
    A --> D["Globalization"]
    B --> B1["PMLA 2002"]
    B --> B2["Forfeiture Acts SAFEMOPA"]
    B --> B3["FIU-IND"]
    B --> B4["Vienna Convention"]
    C --> C1["High-Volume Digital Transactions"]
    C --> C2["Smurfing via Intermediaries"]
    C --> C3["Cryptocurrencies & Decentralized Finance"]
    D --> D1["Cross-Border Asset Distribution"]
    D --> D2["Jurisdictional Coordination Gaps"]
    D --> D3["Exploitation of Tax Havens"]

1. Role of Emerging Technologies

• Digital Transactions: The massive volume of online transactions allows launderers to easily layer funds across multiple accounts.
• Smurfing: Launderers break down large sums into tiny, structured deposits using automated digital networks to evade regulatory thresholds.
• Cryptocurrencies: Decentralized, peer-to-peer virtual currencies enable anonymous, borderless transfers, bypassing traditional banking oversight.

2. Role of Globalisation

• Asset Dispersion: Globalized financial networks allow criminals to distribute assets across multiple countries, complicating tracking efforts.
• Jurisdictional Gaps: Differences in legal frameworks across nations create loopholes that launderers exploit to escape prosecution.
• Tax Havens: Countries like Panama and the Cayman Islands offer strict banking secrecy, facilitating tax evasion and shell company operations.

---

Measures to Combat Money Laundering

National Measures (India)

• PMLA 2002: The Prevention of Money Laundering Act provides a stringent legal framework, making money laundering a cognizable, non-bailable offense.
• Asset Forfeiture: Acts like SAFEMOPA (1976) and the NDPS Act (1985) empower authorities to seize properties acquired through illegal means.
• FIU-IND: The Financial Intelligence Unit-India acts as the central agency for receiving, processing, and analyzing suspicious transaction reports.

International Measures

• Vienna Convention: Mandates member states to criminalize money laundering linked to drug trafficking.
• FATF (Financial Action Task Force): Sets global standards and monitors compliance to prevent money laundering and terror financing.

---