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Process and Prevention of Money Laundering in India

Process and Prevention of Money Laundering in India

MONEY LAUNDERING PROCESS

  • The processes are extensive. Generally speaking, money is laundered whenever a person or business deals in any way with another person’s benefit from crime.
  • That can occur in a countless number of diverse ways.

Traditionally money laundering has been described as a process which takes place in three distinct stages:

  • Placement, the stage at which criminally derived funds are introduced in the financial system.
  • Layering, the substantive stage of the process in which the property is ‘washed’ and its ownership and source is disguised.                        Process and Prevention of Money Laundering in India
  • Integration, the final stage at which the ‘laundered’ property is re-introduced into the legitimate economy.

This three staged definition of money laundering is highly simplistic. The reality is that the so called stages often overlap and in some cases, for example in cases of financial crimes, there is no requirement for the proceeds of crime to be ‘placed’.                          Process and Prevention of Money Laundering in India

PREVENTION OF MONEY LAUNDERING

Laws against Money Laundering in India

Prevention of Money laundering act, 2002 is working against Money Laundering in India. Before the enactment of the Prevention of Money Laundering Act 2002 (PMLA­-02), the following statutes addressed this issue:

  • The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
  • The Income Tax Act, 1961
  • The Benaim Transactions (Prohibition) Act, 1988
  • The Indian Penal Code and Code of Criminal Procedure, 1973
  • The Narcotic Drugs and Psychotropic Substances Act, 1985
  • The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988

ALSO READ : https://www.brainyias.com/indias-vulnerability-to-money-laundering/

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