The word laundering is used for cleaning dirty clothes. Money Laundering is used to clean the dirty money. Money laundering is the disguising or concealing of illicit income in order to make it appear legitimate. Indian anti-money laundering law encompasses the money generated from numerous different crimes e.g., drug trafficking, murder for hire, racketeering, and embezzlement.
Why it is a Problem for Countries?
1. Money laundering may look like a polite form of white collar crime, but it is the companion of brutality, deceit and corruption.
2. Money laundering deprives governments of some tax revenues, thereby raising the relative burden of honest citizens.
3. Because of rapid movements of large amounts of money, normally stable financial institutions become destabilized, threatening savings accounts and retirement funds of innocent citizens.
4. Estimates of the size of the money laundering problem total more than $500 billion annually worldwide.
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