Every year due to trade-based money laundering, the international community loses billions of dollars. According to US reports, China, India, Russia and Mexico are identified as the top four in this list of illicit financial outflows. This practice also costs Pakistan a whopping US $10 billion a year!
What is money laundering?
According to Wikipedia,
Money laundering is the process of making illegally-gained proceeds (i.e. “dirty money“) appear legal (i.e. “clean”).
What are Illicit Financial Flows?
IFFs are illegal movements in which the money/capital is moved from one country to another. The Global Financial Integrity (GFI) says that ‘illicit flow’ are funds which are illegally earned, transferred or utilized.
International Narcotics Control Strategy Report
The US State Department issued a report recently. In it, TBML (trade-based money laundering) is referred to as:
A process which helps the criminals use a legitimate trade to disguise their illegal activities from their immoral sources.
Many traders and the currency mafia launder hundreds of billions of dollars every year. This is an elite procedure of cleaning dirty money.
The Top Four Nations Involved
China secures the top spot in the GFI list with $139 billion. This is an average outflow of illicit finances annually, followed by Russia ($104 billion) and Mexico ($52.8 billion).
India is the fourth largest source involved in these activities. The most common money laundering methods in India include opening multiple bank accounts to conceal the funds. Then comes purchasing bank cheques with cash and manipulating funds through building complex legal structures.
The laundered fund in India comes from trafficking of narcotics and humans. It also includes tax avoidance and economic crimes.
The Reserve Bank of India suspended the 500 and 1,000 Rupee notes to introduce new banknotes in November 2016. This helps them crack down on “black money” originated through corruption, tax evasion and other illegal financial activities.
The Situation in Afghanistan
The terrorists’ financing continue to threaten Afghanistan. The country’s security and development remains at risk with cash smuggled in bulks. The majority of this cash is earned through drugs.
“Afghanistan remains the world’s largest opium producer and exporter. Corruption remains a major obstacle to the nation’s progress,” the report says.
Money laundering in Pakistan
Pakistan estimates $10 billion a year involved in money laundering. It involves escaping taxations and transferring of money beyond the borders illegally. With nearly one-third of the population living below the poverty line, this is indeed quite alarming.
Something Pakistanis Need to Worry About
However, such crimes are not something that would leave you in a state of shock in Pakistan. Governments playing dirty politics has become common. We all should take a moment to ponder over we have done so wrong over the years to witness such days. Also, we need to consider the steps required to rid ourselves of these problems.
The scales of corruption are going higher and higher every day. Nevertheless, this is not how things would end. The criminals will surely face the music. The only thing to worry about is that if they flee away, would we be able to pay the debts Pakistan has until today?
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