Domestic and International Legal Frameworks Covering White Collar Crimes


“Law is like a cobweb; it’s made for flies and the smaller kinds of insects, so to speak, but lets the big bumblebees break through.” – Daniel Drew, in reproval of criminal law.[1]

Theories of crime were often criticised for overlooking the criminal characteristics of wrongs committed by those of socio-economically privileged positions. They were said to exercise a significant bias, when it came to defining crime and criminality, against the lower classes, possessing a baseless assumption about the frequency and tendency of crime, deeming it to have higher incidence amongst the lower strata of society, caused by poverty, and psychopathic and sociopathic factors.[2] However, highlighting the need for elimination of such a bias, and inclusion of all types of criminality in an all-encompassing and comprehensive theory of criminal behaviour, as well as sufficient legislative modifications in administrative implementation of the criminal law in this regard; Edwin Sutherland, in 1939, coined the term ‘white-collar crime’.[3]

White-collar crimes not only have a magnitudinous financial impact, but also visibly shake the trust, and public good faith in the profession as a whole. It has social repercussions as well. The United Nations estimates that up to $1.6 trillion is laundered annually worldwide.[4] White-collar crime damages not only the economy but also greatly aggrieves the entire community, disregarding their interests and manifesting itself in the form of mistrust and loss of faith. As held in State of Gujarat v. Mohanlal Jitamalji Porwal and Another:[5]

“A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community.”

White-collar crime was first defined as a crime committed by a person of respectability and high social status in the course of their occupation.[6] However, this offender-based definition was subject to several criticisms, and eventually, several other definitions emerged. On the whole, white-collar crime can be understood as a violation of the criminal law carried out by usually high-profile professionals with financial motives. White-collar crime isn’t particularly defined or recognised formally in Indian legislations, however, a diverse range of laws cover the identification, process of investigation, and punishment, for various types of white-collar crimes.

Legal Conceptualisation of White Collar Crimes in India

The Law Commission of India, in its Forty-Seventh Report on ‘The Trial and Punishment of Social and Economic Offences’, described white-collar crimes as a crime committed in the course of one’s occupation by a member of the upper class of society.[7] It furnished the examples of a drug dealer deliberately selling sub-optimal quality drugs, and a big corporation responsible for fraudulent evasion of tax. It was noticed that a peculiar feature of such crimes was that they were predominantly committed by those of the upper classes of society, or by corporations. Considering the damage to their reputation and dignity, and their fear of it, the report effectively prescribed public censure and condemnation in such cases.[8]

In pursuance of this, there have been several regulations and laws enacted by the Government of India that cater to the objective of curbing white-collar crimes, procedurally, as well as a deterrent. Some of these include:

  1. Essential Commodities Act, 1955
  2. The Industrial (Development and Regulation) Act, 1951
  3. The Import and Exports (Control) Act, 1947
  4. The Foreign Exchange (Regulation) Act, 1974
  5. Companies Act, 1956
  6. Prevention of Money Laundering Act, 2002

The breach of the provisions in these legislations may amount to white-collar crime and attract penal sanctions. Further, these are supplemented by the amendments to the Indian Companies Act, 2000 and thereafter, the Competition Act, 2002, Insurance and Banking laws; increased government control of private businesses, and the appointment of Lokpal, and a Lokayukta, as well as issuing of strict guidelines for the prevention of money-laundering, by the Reserve Bank of India.[9] The Economic Intelligence Wing of the Central Bureau of Intelligence was also instituted with a view to tackling white-collar crimes.[10]

The institution of the Santhanam Committee in 1964 to check corruption was also undertaken on the same line. In its report, the committee stated that the big industrialists, businessmen, government officers are responsible for white-collar crime in India.[11] The committee further observed that:

“Corruption cannot be eliminated or reduced unless preventive measures are been taken and implemented in a proper manner. Preventive measures must include administrative, legal, social, economic and educative measures.”

It is on these recommendations, that the Central Vigilance Commission was set up by the then Central government. The main aim was to look into cases of corruption against the central government.

The Indian Penal Code, 1860, also provides for curbing financial crimes, for instance, bank frauds,[12] insurance frauds,[13] credit card fraud, medical fraud and others of the like. Certain provisions of the Information Technology Act, 2000, have also been enforced with the purpose of regulating white-collar crimes in commercial transactions, taking advantage of computers and technological advancements.[14]

International Legal Regimes

At the international level, in the context of international white-collar crime, the United Nation’s changes to modern, multilateral treaty-making, encompass many aspects of transnational crime.[15] The United Nations Convention Against Transnational Organised Crimes And Its Protocols,[16] is another internationally accepted means of keeping a check on organised crimes, and despite not explicitly mentioning white-collar crimes specifically, it comprehensively provides for various means to combat such crimes at the international level.

The United Nations has always played the role of a forum for negotiation and efficient formulation of international treaties against illicit trade and white-collar crimes. The 1998 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances,[17] which was brought into effect in 2000, supplied precedents for a myriad of actions and conceptualized the framework regarding transnational crime such that may be followed by future treaties.

Signatory nations are required by the treaty to formally criminalize many drug trafficking crimes, including money laundering, and to adopt detailed laws pertaining to the instrumentalities and proceeds of crime, including tracing, freezing, confiscating, and forfeiting such instrumentalities and proceeds.[18] The United Nations Convention against Corruption[19] is the only legally binding universal anti-corruption instrument. The all-inclusive nature, and mandatory character of many of its provisions, allows the development of a systematic and holistic legal base for global problems such as white-collar crimes.[20]


White-collar crimes are evidently detrimental to society and can occur in any given profession or occupation. They must be dealt with exigently in order to mitigate economic damage and social mistrust. White-collar crimes are relatively more difficult to detect, and complex in nature, thus require elaborate and clear international as well as domestic legal framework, in order to efficiently curb and deter their commission.

[1] Edwin H. Sutherland, White-Collar Criminality, American Sociological Review, vol. 5, no. 1, 1, 12 (1940).

[2] Edwin H. Sutherland, White-Collar Criminality, American Sociological Review, vol. 5, no. 1, 1, 12 (1940).

[3] Donald J. Newman, White-Collar Crime, Law and Contemporary Problems, vol. 23, no. 4, 735, 753 (1958).

[4] Jaime Lowe, The White-Collar-Crime Cheat Sheet, The New York Times (Jun. 23, 2020, 3:49 PM)

[5] State of Gujarat v. Mohanlal Jitamalji Porwal and Another, AIR 1987 1321; see also Rajesh Himatlal Shah And Another vs State Of Maharashtra And Another, 2013 (6) ABR 850.

[6] Edwin H. Sutherland, White Collar Crime, New York: Dryden Press, 9 (1949).

[7] Law Commission of India, Forty-seventh Report on the Trial and Punishment of Social and Economic Offences, No.F.1(5)/71-LC (1972).

[8] Law Commission of India, Forty-seventh Report on the Trial and Punishment of Social and Economic Offences, No.F.1(5)/71-LC (1972).

[9] Admin, White-Collar Crimes in India: A Legal Perspective, B&B Associates LLP (Jun. 24, 2020, 10:34 AM)

[10] Sumir Kaul, CBI forms new wing to tackle economic crimes, The Economic Times (Jun. 23, 2020, 9:13 PM),was%20being%20readied%20for%20extradition.

[11] Ministry of Home Affairs, Government of India, Report on the Committee on Prevention of Corruption, 1964.

[12] S.Madan Chander vs The Commissioner Of Police, Crl.O.P.Nos.715 & 716 of 2014.

[13] United India Insurance Co. Ltd. v. Rajendra Singh & Ors., (2000) 3 SCC 581.

[14] Admin, White-Collar Crimes in India: A Legal Perspective, B&B Associates LLP (Jun. 24, 2020, 10:34 AM)

[15] Bruce Zagaris, International White Collar Crimes: Cases and Materials 521 (2nd ed. 2015).

[16] UN General Assembly, United Nations Convention against Transnational Organized Crime And Its Protocols, 8 January 2001, A/RES/55/25.

[17] UN Economic and Social Council (ECOSOC), United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 19 December 1988.

[18] Bruce Zagaris, International White Collar Crimes: Cases and Materials 521 (2nd ed. 2015).

[19] United Nations General Assembly, United Nations Declaration Against Corruption and Bribery in International Commercial Transactions, December 16, 1996, UN Doc. A/RES/ 51/191.

[20] United Nations Office on Drugs and Crime, United Nations Convention Against Corruption (Jun. 24, 2020, 5:16 PM)

This Article is Authored by Bhargavi G Iyer, 2nd Year, BA LLB (Hons) Student at NMIMS Kirit P Mehta School of Law, Mumbai.

Also Read – What are the Legal Frameworks Covering White Collar Crime?

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