What are the Legal Frameworks Covering White Collar Crime?

An economic offence is a separate category of crimes under criminal offences. Whitecollar crimes are committed by the people who belong to a higher social status and are from a reputable group of society. Generally, the crime is committed by salaried professional workers or people in businesses having a better understanding of technology, discipline, principles of their respective field. Indulgence by technocrats, highly qualified persons, well to do businessmen, corporate persons, etc. In economic offences, not only individuals get victimized with pecuniary loss. Such offences often damage the national economy.

White-collar crimes are non-violent crime, committed by people who are involved in large organizations, lawful businesses. Such crimes account for violation of laws and a high loss of economic and industrial growth. Such crimes are committed by those belonging to higher society having access to a large amount of people’s money. White-collar crimes are committed in due course of occupation involving tax evasion, adulteration of food-stuff, edibles and drug, black marketing, insurance fraud, corruption, insider trading, embezzlement, foreign exchange fraud, smuggling of narcotics and psychotropic substances, smuggling of antiques arts and treasure, violation of intellectual property rights, audio, video privacy, software piracy, money laundering, cybercrime bribery, extortion, fraud, etc., thus becoming a socio-economic crime.

The term white-collar crime was given by famous criminology professor and sociologist Edwin Sutherland in 1939. He defined white-collar crime as the crime committed by a person of respectability and high social status in the course of their occupation.

Types of White Collar Crimes

The White collar crimes can be classified into two types

  1. Occupational crime
  2. Organizational crime

1. Occupational crime

The crimes committed for personal gain during a legal occupation are called occupational crimes. Such kind of crimes includes money laundering, corruption, embezzlement, tax fraud, stocks and securities violations, and identity theft altering records. This type also includes the corruption of government officials.

2. Organizational crime

The crimes committed by business entities, corporations or by an individual on behalf of a corporation or business entity for monetary gain are considered as organized crime. Such type of crime includes misrepresentation, commercial bribery, bank fraud, blackmail, counterfeiting, forgery, tax evasion, and other professional crimes.

White-collar crimes can also be seen in different professions as well. Such as

1. In medical and health

    1. Making of false medical certificate by the doctors
    2. Sex determination of child in the womb for money gain
    3. Fake prolonged treatment in order to increase money bills

2. In the legal profession

      1. Fabrication of evidences
      2. Threatening the witnesses
      3. Identity theft
      4. Violation of ethical standards in order to earn more money

3. In education

    1. Donation-based admissions
    2. Collecting the huge amount of money in the name of grants

4. Cybercrime

With the rapid increase in the advancement of technology, cybercrime is becoming the lead cause of such crimes. It threatens the security of the nation as well as the financial status. It also threatens the privacy of an individual. Disclosure of such confidential information may cause privacy problems. Cybercrime against women is also rapidly increasing. Cyberstalking, sending obscene messages, hacking, child pornography, copyright infringement, cyber terrorism are some of the common examples of cybercrime.

Legislation against white-collar crime in India

1. Companies Act, 2013

Section 447 of Companies Act,2013 provides the details regarding the punishment for fraud, also provides penalty ranging between the amount of fraud and up to thrice of the amount in fraud. The act also provides imprisonment from 6 months up to ten years and if the fraud is of public interest, then the minimum term of imprisonment would be three years.

2. Income Tax Act, 1961

According to section 37(1) of the Income Tax Act, 1960, no deduction or allowance can be made on any expenditure for any purpose which is an offence that is prohibited by law.

3. Indian Penal Code, 1860

Section 463 to section 474[1] provides about the white-collar crime such as tax avoidance, dark advertising, defilement and remuneration, storing, digital wrongdoings, cheating, fraud and so on.

4. Information Technology Act, 2005

The acts deal with the crimes related to the computer and technology. The act provides penalties in section 43 and 44[2] for the case of replicating of information, unauthorized data, assess, copied, infringe and so on.

5. Prevention of Corruption Act, 1988

This act criminalizes the following acts:

Taking of gratification by a public servant for an official act, taking of gratification by corrupt legal or for personal influence with a public servant

  1. Abetting in corruption
  2. Criminal misconduct by a public servant.

6. Negotiable Instrument Act, 1881

7. Prevention of Money Laundering Act, 2002

8. Essential Commodities Act, 1955

9. Imports and Exports control Act, 1947

10. The Industrial (Development and Regulation) Act, 1951

11. The Foreign Exchange (Regulation) Act, 1974

12. The Special Court (Trial of offences relation to Transactions in securities) Act, 1992[3]

13. The Central Vigilance Commission Act, 2003

International legal frameworks against White collar crime

  1. United Nations Convention against Corruption

This anti-corruption convention covers corruption offences, such as domestic and foreign bribery, embezzlement, money laundering.

2. United Nations Convention against Transnational Organized Crime

This convention mandates the corruption and bribing of public officials as a criminal offence

3. The United States Foreign Corrupt Practices Act, 1977

This is a United States federal law which prohibits the US citizens and entities from bribing a foreign government official for their business interest.

4. Criminal Finances Act, 2017[4]

This act introduced some new offences relating to companies:

  • Failure to prevent the facilitation of UK tax evasion
  • Facilitation of foreign tax evasion.


White-collar crimes violate law and trust and create distrust within society. Such crimes cause harm to the economy of a country creating a negative impact on society. Such types of crimes are needed to be dealt with strictly as they vitiate the social fabric. Laws are needed to be followed strictly.

[1] Indian Penal Code, 1860

[2] Information Technology Act, 1860

[3] The Special Court (Trial of offences relation to transactions in securities) Act, 1992

[4] Act of United Kingdom

This article has been authored by Naveeta, Second Year, BA.LLB (Hons.), Student at Vivekananda Institute of Professional Studies (VIPS), Delhi.

Also Read – All About White Collar Crimes

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