Interpol to curb hawala payments

Fraudulent commercial operations are conducted by people ranging from legitimate businessmen to avoid paying taxes, to drug traffickers and smugglers trying to send money abroad, especially to tax havens like Liechtenstein, Channel Islands and St Kitts, through illegal channels.

Calling for classification of corruption as a criminal matter by all countries, Kendall said “Earlier nobody was even willing to admit that corruption existed”.

Kendall said distinction should be made between tax evasion and laundering of proceeds of crime.

“We are launching an attack on organised crime and the most efective way to deal with it is to take away its financial back-up,” Kendall said.

On international cooperation in dealing with money laundering and corruption cases with international ramifications, Kendall said “the number of countries which would not cooperate is decreasing. A government has to justify why it wants information on a certain bank account in another country in order to get it”.

“There seems to be certain unwillingness among some countries to use international conventions to tackle corruption or money laundering issues legally,” Kendall said, adding that the 1988 United Nations convention on money laundering and drug trafficking could be made use of by the nations for the purpose.

Asked whether governments in countries considered to be tax havens would cooperate, he said Switzerland, Channel Islands and others are cooperating on several cases.

Some of these countries have now amended their laws for the purpose, Kendall said and lamented that several countries “still do not have proper legislations to check money laundering” even though fraudulent commercial operations could constitute serious threat to the economies of victim countries.

However, the silver lining in all this is that certain groups of nations like European Union are either already experimenting with common laws to deal with the menace or some others like G-7 and G-8 are working on common laws to deal with money laundering, he said.

An Interpol document has listed several examples of frauds committed globally in recent times. They include setting up fictitous companies and selling stocks and bonds abroad, purchase on credit of goods which are immediately sold abroad cheaply, cashing stolen or counterfeit bank cheques or travellers cheques by using false identity, making expensive purchases in one country using credit cards stolen in another, computer fraud, maritime fraud and copyright infringements.

The Interpol has set up a counterfeit currency and fraudulent document group to collect and disseminate information to member countries.

Kendall said vast amounts of illegal money being transacted globally on a daily basis can be carried out only by qualified accountants, lawyers and financial experts, besides computer professionals.

Most of the illicit money exchanges are done along withdrug trafficking and the amount per annum could be much more than 500 US billion dollars estimated by the United Nations, the Interpol executive head said.