Marine Cargo Insurance and Money Laundering

How safe is it to insure cargo which only moves on
paper? You must have seen that happening in the
movie “Guru”. It does constitute breach of law as
per Indian constitution. However, one thing is sure
that there would never be a claim under that policy,
as the intention is not to send the goods in the first
place, but, to make black money white.

Also, under basic principles of Insurance and its
corollaries, the contract in itself can be avoidable
(including the liability under the contract) at a later
stage, once the insurer has booked the premium.
Does it then remain, finally, a question of ethics and
healthy business practice(?), is a question to be pondered
upon.