MR.B.J.VED

• Money laundering means acquiring, owning, possessing or transferring any proceeds (of money) of crime or knowingly entering into any transaction related to proceeds of the crime either directly or indirectly or concealing or aiding in the concealment of the proceeds or gains of crime,within or outside India.

• It is a process for conversion of money obtained illegally to appear to have originated from legitimate sources such as drug / arms trafficking, terrorism & extortion.

• Money Laundering is done through1.Placement:- Refers to physical disposal of bulk cash

proceeds derived from illegal activity.

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2. Layering:- The separation of illicit proceeds from their source by creating complex layers of financial transactions. Layering conceals the audit trail & provides anonymity.

3. Integration:- Reinjection of the laundered proceeds back into the economy in such a way that they re-enter the financial system as normal business fund.

According to IMF – aggregate size of money laundering in the world is 2% to 5% of world’s GDP.

The Basel Principles suggest policies & procedures in following areas to curb money laundering1. Customer Identification (Know Your Customer)2. Compliance with Laws3. Co-operation with Law Enforcement Agencies

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Legal Set up in India• Indian Parliament passed “ The Prevention of Money

Laundering Act 2002” (Dec.2002) for prevention of money laundering. The Act also provides for confiscation of property derived from or involved in money laundering.

• Offences & Punishment

Offences are cognizable (Police can register & investigate case & arrest the accused without the court permission) /non-bailable. Punishment would be rigorous imprisonment for not less than 3 years but upto 7 years and fine upto Rs. 5/- lac. Enforcement Directorate has been made the designated authority to track cases of money laundering which will havefar more powers than what was available to ED under FERA.

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