What is Money Laundering?
- PMLA defines money laundering as an act of directly or indirectly attempting to indulge or knowingly assisting or knowingly being a party or actually involved in concealing, possessing, acquiring, using, projecting as untainted property, or claiming as untainted property, in any manner whatsoever, the proceeds of crime.
- It is defined as the process through which an illegal fund, such as black money, is obtained from illegal activities and disguised as legal money, eventually portrayed as white money.
About Prevention of Money Laundering Act (PMLA), 2002:
- It is an act to prevent money laundering and to provide for the confiscation of property derived from or involved in money laundering.
- The Act was formulated for the following objectives:
- Prevent money-laundering.
- Combat/prevent the channelising of money into illegal activities and economic crimes.
- Provide for the confiscation of property derived from, or involved/used in, money laundering.
- Penalise the offenders of money laundering offences.
- Appointing an adjudicating authority and appellate tribunal for taking charge of money laundering matters.
- Provide for matters connected and incidental to the acts of money laundering.
- The Enforcement Directorate (ED)in the Department of Revenue, Ministry of Finance, is responsible for investigating the offences of money laundering under the PMLA.
- Financial Intelligence Unit–India (FIU-IND), under the Department of Revenue, is the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
- The scheduled offences are separately investigated by the agencies mentioned under respective acts, for example, the local police, CBI, customs departments, SEBI or any other investigative agency, as the case may be.
- Actions that can be initiated against the person involved in money laundering:
- Seizure/freezing of property and records and attachment of property obtained with the proceeds of crime.
- Any person who commits the offence of money laundering shall be punishable with rigorous imprisonment for a minimum term of three years, and this may extend up to seven years and fine (without any limit).
- The PMLA and rules notified thereunder impose obligations on banking companies, financial institutions, and intermediaries and persons carrying on a designated business or profession, to verify identity of clients, maintain records and furnish information to FIU-IND.
