Prevention of Money Laundering Act

Prevention of Money Laundering Act

The Prevention of Money Laundering Act (PMLA)

The Prevention of Money Laundering Act, 2002 (PMLA) forms the center of the legal framework put set up by India to combat money laundering. Prevention of Money Laundering and the Rules advised there under came into power with impact from July 1, 2005 . Chief, FIU-IND and Director (Enforcement) have been consulted with selective and simultaneous forces under important areas of the Act to execute the provisions of the Act.

anti laundering act

The PMLA and rules told thereunder impose commitment on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to FIU-IND. PMLA characterizes tax evasion offense and accommodates the solidifying, seizure and reallocation of the proceeds of crime.

It should come into power on such date as the Central Government might, by notice in the Official Gazette, select, and diverse dates might be named for various procurements of this Act and any reference in any such procurement to the initiation of this Act should be understood as a source of perspective to the coming into power of that provision.

money laundry act

Definitions

a) “Adjudicating Authority” means an Adjudicating Authority appointed under sub-section (1) of section 6;

(b) “Appellate Tribunal” means the Appellate Tribunal established under section 25;

OBJECTIVES

• Enabling you to expand your familiarity with anti-money laundering.
• Explaining your responsibilities under Money Laundering Prevention Act-2008 and to meet the regulatory requirements.
• Consequences of resistance
• Answering your queries which you may have in implementing the AML/ KYC procedures of the Bank.

Money Laundering Prevention :

Money laundering can be an intricate procedure. It involves three different, and sometimes overlapping, stages: Placement involves physically placing illegally obtained money into the financial system or the retail economy.

Cash is most powerless against recognition and seizure amid arrangement. Layering includes isolating the illicitly acquired cash from its criminal source by layering it through a progression of monetary exchanges, which makes it hard to follow the cash back to its unique source.
Integration involves moving the proceeds into a seemingly legitimate form. Integration may include the purchase of automobiles, businesses, real estate, etc.

An important factor connecting the three stages of this process is the “paper trail” generated by financial transactions. Criminals try to avoid leaving this “paper trail” by avoiding reporting and recordkeeping requirements. One way cash launderers abstain from structuring so as to report and recordkeeping necessities is exchanges, constraining or renumerating representatives not to document appropriate reports or finish required records, or by setting up evidently honest to goodness “front” organizations to open records or build up favored client connections.

Punishment for money-laundering

Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and might likewise be at risk to fine which may extend to five lakh rupees :

Provided that where the proceeds of crime involved in money-laundering relate to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted.

Related Links:
Prevention of Money Laundering Act
 Money Laundering Act

 

Source : indiankanoon.com
fiuindia.gov.in
slideshare.net/bluesme/money-laundering-prevention

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