Money laundering with particular reference to the banking deposit transactions

Mahmood Mohamed Sanusi

Journal of Money Laundering Control, 2008, vol. 11, issue 3, 251-260

Abstract: Purpose - The purpose of this paper is to explain the theoretical framework of money laundering and expanded to study it from the Islamic perspective. As money laundering sustain truly “global issues” and thus should be treated as such. The purpose is to examine the conception of money laundering under Islamic law in conjunction with the discussion of Islamic law of contract; the most common methods in money laundering involving numerous cash deposits at various bank branches, followed by the purchase of a secured bank instrument, such as cashiers' check; how far is Islamic law able to provide rules, norms in protecting financial institutions, customers and the public from criminal activities? Design/methodology/approach - The paper depended on primary data. The data were procured from the HolyQuran, PropheticSunnahwhich embodied all tenets of Islamic law, and in addition, from the books of the Classical Muslim scholars. Findings - It has been revealed that Islam has initially taken great interest in the market condition, business conduct and economic system. Generally speaking Islam law prohibits all business conducts which compromise unjustified consumption, misappropriation of one's wealth thus creating parasitical classes of people obtaining wealth and money being the root of all criminal activities; financial crimes and the concept of money laundering have been categorised as a division of Islamic criminal law which has been addressed via many provisions in theQuranand Prophet'sSunnah; the prophet and his successors have developed the Institution ofHisbahto control malpractices and criminal activities. Moreover, Islamic law prescribes a set of principles, rules and measures to deal with acts that are most likely to affect the economic scenario. Originality/value - This invaluable paper identifies the attitude of the Islamic law in monitoring and preventing the concept of money laundering, further distinguishing between illicit gains (al‐Kasb al Haram) and lawful gains. Finally, this paper reviews the Islamic norms relating to confiscation and forfeiture of Ill‐gotten wealth and property.

Keywords: Money laundering; Islam; Criminal forfeiture; Savings banks (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:13685200810889399

DOI: 10.1108/13685200810889399

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