M-Power by MGM : Shri K. Annamalai, S.P Udupi on Black Money, Hawala and Money Laundering: Perspective of Law Enforcement Agencies

Mr. K Annamalai was present in the Tapmi campus for the 4th session of M-Power organized by MGM. His experience and knowledge, being the SP of Udupi was apt to discuss the topic of black money and money laundering in India.

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He started the discussion by defining ‘money laundering’ in layman terms. There is a significant difference between money laundering and black money to which he explained the meaning of the same as defined by the Finance Intelligence Unit of India, Ministry of Finance. Money laundering is the process by which large amounts of illegally obtained money is given the appearance having originated from a legitimate source , whereas black money are the proceeds received from this process. He gave us a brief about the origin of the term in 1873, which was coined by Mark Twain. He discussed how in the old days there was a presence of mafia gangs and the money that they illegally earned which they used to build casinos. The origin of the term money laundering comes from the practice of using the book keeping practices of laundromats which were set up by these mafias to conceal their black money.

Explaining further, he illustrated the stages and layers involved in the process. But why is the issue of money laundering and black money so important? It is because it effects the economy and the country in many ways, some of them being crippling of economic growth, rise of anti-national forces locally, rise of illicit business, escaping international sanctions etc. In the meantime he also gave his own experiences from the cases in the law enforcement agencies. Another important perspective regarding the issue was how the world sees it. Money laundering is considered as a serious offence in developed nations and also several UN resolutions passed, one of them being ‘The Financial Action Task Force’ (FATF). Narrowing down the discussion to the Indian context, he discussed the Financial Intelligence Unit (FIN), Ministry of Finance and the Prevention of Money Laundering Act, 2002.

Another concept that comes to the picture is ‘Terrorism Financing’, which basically means an activity that provides financial support to designated terrorist groups. This is a serious threat that is faced by the financial sector today, not only in India but all over the world. Concerning the same he discussed various cases in which he was personally in-charge, the integrities involved and the legal aspects. Finally, we had a question & answer session in which he interacted with the students one to one.

It was an informative and interactive session which was thoroughly enjoyed by the students present along the faculty members.

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