Everything you need to Know about Anti-Money Laundering Act
Aug 13, 2019 Legal Guidance
Money laundering is one of the most severe crimes that the world is facing. The government of India has made several laws to prevent the money laundering, and over the years, the rules have become stringent and strengthen. The prevention of Money Laundering Act (PMLA) is the act which has been amended several times to combat such crimes.
Before we proceed further let us discuss what is money laundering? Everything that includes disguising the money earned through crimes or criminal activity and integrating it into the legal, financial system is called money laundering.
Money laundering comprises of three stages: Placement, layering, and integration. Placement refers to the movement of cash from its place of origin and making it to the mainstream circulation. Layering is the process of covering tracks to make it difficult for the authorities to track. When the laundered money becomes the part of legitimate transactions, it is then known as integration.
Over the years, several amendments have been made to make the law stringent. Recently, the government widened the definition of the ‘proceeds of crime’ and stated that property would be considered tainted if the property or transaction related to any offense on which PMLA case has been slapped.
The amendment also stated that the ‘proceeds of crime’ also extends to if the property has been acquired ‘directly or indirectly’ based on the money for which the money laundering case has been filed.
Adjudicating authority is responsible for deciding whether the property is involved in money laundering or not while the Appellate Tribunal hears the appeals against the orders of Adjudication authority and the authorities constituted under the Act.
Before we proceed further let us discuss what is money laundering? Everything that includes disguising the money earned through crimes or criminal activity and integrating it into the legal, financial system is called money laundering.
Money laundering comprises of three stages: Placement, layering, and integration. Placement refers to the movement of cash from its place of origin and making it to the mainstream circulation. Layering is the process of covering tracks to make it difficult for the authorities to track. When the laundered money becomes the part of legitimate transactions, it is then known as integration.
Money laundering Act:
The money laundering Act was framed and enacted on January 2003, known as the Prevention of Money Laundering Act (PMLA). The law states that “The offense of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of the offense of money-laundering.”Over the years, several amendments have been made to make the law stringent. Recently, the government widened the definition of the ‘proceeds of crime’ and stated that property would be considered tainted if the property or transaction related to any offense on which PMLA case has been slapped.
The amendment also stated that the ‘proceeds of crime’ also extends to if the property has been acquired ‘directly or indirectly’ based on the money for which the money laundering case has been filed.
Conducting the investigation under PMLA
The Directorate of Enforcement is the agency responsible for carrying the investigation for crimes related to or of money laundering. The Adjudicating Authority and Appellate Tribunal set under the Act are also an integral part of the investigation process.Adjudicating authority is responsible for deciding whether the property is involved in money laundering or not while the Appellate Tribunal hears the appeals against the orders of Adjudication authority and the authorities constituted under the Act.
Punishment under the law:
If the person is found guilty of money laundering, the punishment can be as follows:- Attachment of property under Section 5, freezing the property and records under Section 17 or Section 18.
- Imprisonment of 7 to 10 years, depending on the crime along with the fine which does not have any upper limit.
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