Abstract:
As per the Financial Action Task Force (FATF), money laundering is the ‘processing of criminal proceeds to disguise their illegal origin to legitimize the ill-gotten gains of crime’. Money Laundering is a transnational crime and due to that fact, ascertaining the perpetrators is an arduous task. Consequently, convicting the perpetrators is hindered due to drawbacks in implementation of laws, scantiness in laws and ambiguities in the law. Money laundering is adverse to the economy as it promotes illegal trade such as drug smuggling and illegal firearms, it creates rapid economic growth but in the long run, the economy is distressed. Furthermore, the liberty and sovereignty of financial institutions are endangered and lead to tax evasion impinging government revenue. The research has attempted to identify money laundering as detrimental to the economy and the need for effective implementation of laws to counter money laundering. The objectives of the research are, to identify the impact of money laundering on the economy, to assess the legal framework relating to money laundering, to discuss the lacunae in the law relating to money laundering and to provide recommendations to rectify the lacunae relating to money laundering. The research seeks to answer the questions on what is the impact of money laundering on the economy, what the legal framework is relating to money laundering, what are the lacunae in the law relating to money laundering and what are the recommendations to rectify the lacunae relating to money laundering. The research is a doctrinal research which is also qualitative in nature. Research has given prominence to statutes and judicial precedents to arrive at results. Research has also been aided by secondary sources such as scholarly publications. In addition, research has shed light on the international legal context to enrich the research. In the end, research has proved that money laundering as detrimental to the economy and the need for effective implementation of laws to combat money laundering.
