Contents

  1. Introduction
  2. PMLA
  3. Objectives
  4. Stages
  5. Common Forms of Money Laundering
  6. Authorities Entrusted for Investigation
  7. Proceeds of Crime
  8. Actions Initiated Against the Person Involved in Money Laundering

Introduction

Prevention of cash washing Act, 2002 was enacted to fight against the criminal offense of legalizing the income/profits from associate degree hot supply. The hindrance of the cash washing Act, 2002 permits the government or the general public authority to confiscate the property earned from the illicitly gained payoff. Money laundering is one every of the recent white-collared and socio-economic offenses that relate to the laundering of cash. Hiding contains all those processes that encompass disguising the payoff raised out of crime and integration them into the legitimate economic system. Recently, in India, there has been a lucid increase in litigations associated with hiding. In essence, the introduction of the Prevention of money laundering Act (referred to as PMLA hereinafter), 2002, raises concern for a sincere approach to differentiate on that offenses to represent “parent offenses” and that area unit “propagated offenses”. Let’s see them in detail below

PMLA

PMLA is outlined to forestall and management hiding. To confiscate and seize the property obtained from the laundered money; and. To touch upon the other issue connected with hiding in Asian nations. The PMLA and its rules impose obligations on news entities like banks, money establishments, and intermediaries to verify the identity of purchasers, maintain records and furnish data to the money Intelligence Unit of Asian nation (FIU-IND).

Objectives

In order to combat hiding in Asian nations, the PMLA, 2002 has the following 3 main objectives:

•    Preventing and dominant hiding;

•    Confiscation and seize of the property obtained from the laundered money; and

•    Dealing with the other issue connected with hiding.

Stages

The Central Government of Asian nations has established varied special courts during a variety of States and UTs to hold out the trial of the money washing offenses. The authorities underneath the Act like the director, adjudicating authority and therefore the proceeding assembly is shaped to conduct the proceedings associated with attachment and seizure of any property derived out of cash washing. There are unit chiefly 3 stages of cash washing as under:

  • Placement: This stage of cash washing refers to the movement of money from its originating supply and injecting into circulation;
  • Layering: It happens once the contravener tries to deter the tracks creating it powerful for the authorities to trace the dealings down; and
  • Integration: At the last stage, once the laundered cash really comes into circulation and becomes a part of the economy, primarily through the banking industry, it’s called integration.

Common Forms of Money Laundering

Hawala, bulk money importing, fictional loans, cash-intensive businesses, round-tripping, trade-based washing, Shell firms, and trusts, assets, gambling, and pretend invoicing area unit a number of the common strategies of cash washing.

Authorities Entrusted for Investigation

The social control board of directors within the Department of Revenue, Ministry of Finance, and the government of Asian nations is accountable for investigating the offenses of cash washing underneath the PMLA. Money Intelligence Unit – Asian nation (FIU-IND) underneath the Department of Revenue, Ministry of Finance is associate degree freelance body news on to the Economic Intelligence Council (EIC) headed by the government minister. FIU-IND is that the central national agency accountable for receiving, processing, analyzing, and diffusive the data regarding suspect money transactions. It’s additionally accountable for:

  • Coordinating and strengthening the efforts of national and international intelligence,
  • Investigations for following the worldwide efforts against hiding and connected crimes.

The regular offenses area unit is individually investigated by agencies mentioned underneath several acts, for example, the native police, CBI, customs departments, SEBI, or the other investigatory agency because the case is also.

Proceeds of Crime

‘Proceeds of Crime’, suggests that and includes, any property obtained or comes directly or indirectly as a result of criminal activity regarding a regular Offence.

Under PMLA, the commission of any offense, as mentioned partially A and half C of the Schedule of PMLA can attract the provisions of PMLA. A number of the Acts and offenses, which can attract PMLA, area unit enumerated below:

  • Part A enlists offenses underneath varied acts such as Indian legal code, Narcotics medicine, and mind-blowing Substances Act, hindrance of Corruption Act, Antiquities and Art Treasures Act, Copyright Act, Trademark Act, life Protection Act, and knowledge Technology Act.
  • Part B specifies offenses that area unit Part A offenses, however, the worth concerned in such offenses is one crore or more
  • Part C deals with trans-border crimes and reflects the dedication to tackle hiding across international boundaries.

Actions Initiated against the Person concerned in money laundering

•    Seizure/freezing of property and records and attachment of property obtained with the payoff of crime.

•    Anyone that commits the offense of cash washing shall be punishable with –

  1. Rigorous imprisonment for a minimum term of 3 years and this might extend up to seven years.
  2. Fine (without any limit).

Over the past decades, many anti-money washing policies are adopted to beat washing. Money establishments and governments area units perpetually trying to find new approaches to fight against money launderers. The banks and money establishments play a polar role within the world of economic crime. It’s vital that they’re properly trained on the way to establish and handle hiding. Virtually each bank worker receives coaching in anti-money washing, and every one financial organisation and banks area unit wrongfully needed to report any suspicious activity. With the assistance of technology like special compliance platforms, firms area unit currently able to simply analysis their customers and make sure that they’re not doing business with criminals.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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