WHILE addressing the inaugural session of plenary of Asia Pacific Group
here yesterday, the Union Finance Minister, Mr Pranab Mukherjee, said that the
capabilities against money laundering and terrorist financing should be
strengthened by all nations to ensure an effective, efficient and more
productive crusade against this menace. He said that left unchecked, money
laundering can undermine the integrity of any financial system and embroil
individual financial institutions in share-crippling financial
scandals.
The
FM said that the 20th century was characterized by a number of structural
changes in the world economy. He said that the main pillars of this process were
liberalization and deregulation of national economies and these developments
together, created both opportunities and risks for the society. He said that
while exponential technological breakthroughs in telecommunication and
information sciences made knowledge, healthcare systems, agro technology,
investments, and entertainment global, it also made, among other things, money
laundering a global problem.
Mr
Mukherjee said that the phenomenon of money laundering takes a myriad of
dimensions, and therefore, its impact on the society are enormous and
multi-dimensional. It has socio-economic, political as well as security
implications on any nation. He said that the socio-economic effects of money
laundering are crippling: illicit funds generated from criminal activities such
as fraud, corruption, extortion, gun running, drug and human trafficking, and
other forms of organised crime are laundered into clean currency, and in turn
are used to fund new criminal operations or expand existing ones. Shri Mukherjee
said that this translates into more fraud, more corruption, more drug
trafficking and dealing, more illegal firearms, more violent crimes, and – most
disconcertingly – more international terrorism. Moreover, the quantum of money
generated from criminal activities and laundered throughout the world is
believed to be several billions of dollars – up to as much as 2 to 5 % of global
GDP, although it is not possible to produce a reliable estimate of the amount of
money laundered, he said. The Finance Minister said that this gives the
beneficiaries of money laundering a lot of muscle, and certainly enough means to
threaten political stability worldwide. He stated that cross-border linkages of
money laundering make it increasingly necessary for us to make collective
efforts in dealing with it ruthlessly.
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