INTRODUCTION
Prevention of Money Laundering Act, 2002 was brought to combat against the criminal offense of permitting the pay/benefits from an unlawful source. The Prevention of Money Laundering Act, 2002 empowers the Government to appropriate the property earned from the wrongfully gathered means. Money laundering is likewise tangled with transnational composed violations and it has been seen that more than 80 percent of all tax evasion plans had a worldwide measurement. The United Nations report presumed that tax evasion is the tenth biggest worldwide financial movement. It has become 24-hour business around the globe when one piece of the earth closes, the other becomes useful. As per the IMF, worldwide Money Laundering is assessed between 2 to 5% of the World GDP.
MONEY LAUNDERING
Money laundering can be viewed as an accumulator of crimes as it gives the financial capacity to lawbreakers. Tax evasion is where the returns of wrongdoing are changed into perceptible genuine cash or different resources. It is the handling of a criminal who continues to camouflage his/her unlawful activities. In a clear-cut way, it is very well characterized as the demonstration of bringing in cash that originates from one source to seem as though it originates from another source. Money laundering is a different offense that starts where the aim to camouflage the illegal cash completes.
INTENTION BEHIND MONEY LAUNDERING
The essential intention behind the illegal tax avoidance process is to make a cover of lawful skillfulness around the entity. This cover authorizes the item’s disassociation with unlawful action from being followed and recognized. The item is to anticipate illegal tax avoidance, hold onto the property with power, associated with tax evasion. The demonstration of illegal tax avoidance is finished to camouflage cash or different resources from the State in order to forestall its misfortune through tax assessment, ruling condition or noticeable capture. The lawbreakers thus attempt to camouflage the cash acquired through criminal operations to appear as though it was attained from legitimate sources because else they won’t have the option to utilize it as it would associate them to the crime and the law implementation authorities would hold onto it.
TYPES OF MONEY LAUNDERING
There are numerous strategies for Money Laundering. Some of them include:
- Mass currency trafficking
- Organizing
- Land-dwelling laundry
- Gaming club laundry
PREVENTION OF MONEY LAUNDERING ACT
Prevention of Money Laundering Act, 2002 came into power with impact from 01st July 2005. The Prevention of Money Laundering Act having been passed by both the Houses of Parliament got the consent of the President on the 17th of February 2003. The Act reaches out to the entire of India except for J&K. The Prevention of Money Laundering Act characterized the offense of illegal tax avoidance and recommends discipline. It further accommodates assembly, settling and seizure of sequences of wrongdoing, require revealing and furnishing data by banks and other budgetary foundations, make extraordinary course and other authorization experts and authorities and make arrangement for the equal game plan and help to different nations. The Prevention of Money Laundering Act was anticipated, by the law requirement association in India to be a significant weapon for fusing into their battle against genuine violations. Among different genuine violations like fear-based oppression and opiates exchange, this Act has appropriately recognized the violation and corrupt dealing in women and youngsters for prostitution purposes, as sources that produce a lot of unaccounted grimy cash in the Indian economy.
DEFINITIONS
The Prevention of Money Laundering Act, 2002 characterizes Money-laundering as whosoever directly or by implication, endeavors to enjoy or help other individuals or associated with any action related to the returns of wrongdoing and anticipating it as untainted property[1]. Attachment is characterized as the Prohibition of change, alteration or disposition of property or movement of property by a suitable permissible legal order[2]. Proceeds of is additionally been defined as any property determined or acquired, legitimately or in an indirect way, by any individual because of crime identifying with a booked offense[3]. The Act likewise defines Payment System as a framework that empowers installment to be effected between a payer and a recipient, including clearing, installment or settlement administration or every one of them. It incorporates the frameworks empowering Visa, charge card, savvy card, cash move or comparative activities[4].
SALIENT FEATURES
Adjudicating Authority
The Adjudicating Authority is the rank delegated by the central government over the notification to training locale, powers, and authority provided under the Prevention of Money Laundering Act. It chooses whether any of the property attached or detained is engaged with illegal tax avoidance.[5]
It will not be bound by the system set anywhere near the Code of Civil Procedure,1908, yet will be guided by the standards of natural justice and especially to different areas of the Prevention of Money Laundering Act. The Adjudicating Authority will have controls to manage its own methodology. [6]
Appellate Tribunal
An Appellate Tribunal is the body designated by the Government of India. It is enabled to hear appeals against the instructions of the Adjudicating Authority and some other authority under the Act. Guidelines of the council can be advanced in fitting High Court (for that purview) and in conclusion to the Supreme Court.[7].
Special Court
Section 43 of Prevention of Money Laundering Act, 2002 (PMLA) articulates that in discussion with the Chief Justice of the High Court, the Central Government drive for the trial of offense culpable under Section 4, by notice, assign at least one Courts of Session as Special Court or Special Courts for such region or regions or for such case or class or gathering of cases as might be indicated in the notice.
Powers of attachment of tainted property
Suitable experts, called by the Government of India, can tentatively assign property accepted to be ” proceeds of crime” for 180 days. Such a demand is required to be affirmed by a self-directed Adjudicating Authority.[8]
Burden of proof
An individual, who is blamed for having perpetrated the offense of illegal tax avoidance, needs to demonstrate that theoretical series of wrongdoing is in certainty legal property.[9]
The presumption in inter-connected transactions
Wherever money laundering includes at least two or additional related connections and at least one such connections is or are end up being engaged with money laundering, at that point for the reasons for mediation or appropriation, it will assume that the rest of the connections method of about such inter-connected connections.[10]
Punishment for money-laundering
Whoever carries out the crime of money-laundering will be culpable thorough with rigorous imprisonment for a term which will not be under three years however which may stretch out to seven years and possibly will extend to fine which may reach out to five lakh rupees and where the returns of wrongdoing included identify with any offense under passage 2 of Part A of the Schedule (Offenses under the Narcotic Drugs and Psychotropic Substance Act, 1985), the utmost extreme penalty may stretch out to 10 years rather than 7 years. [11]
PREVENTION OF MONEY LAUNDERING (AMENDMENT) ACT 2012
The Prevention of Money Laundering Act 2012 has been additionally altered by the Parliament in 2012. The revising Act has come into power on 15 February 2013. Since the issue of money laundering was not, at this point is limited to the geopolitical limits of any nation. The meaning of money laundering is extended with upgraded punishment. There are currently arrangements for improvement of punishment by expelling eliminating border of Rs. 5 lacs. It makes arrangements for connection and seizure of proceeds of crime and gives power on Director and makes reportage institutions or organizations answerable for mistake/commission, raises expectations.
PHASES TAKEN BY GOVERNMENT OF INDIA TO STOP MONEY LAUNDERING
- Prevention of Money Laundering Act (Amendment) Act, 2012
- Narcotic Drugs and Psychotropic Substances Act, 1985
- Criminal Law Amendment Ordinance (XXXVIII of 1944
- The Smugglers and Foreign Exchange Manipulators Act, 1976
- Financial Intelligence Unit-IND
WORLDWIDE ATTEMPTS TO COMBAT MONEY LAUNDERING
- The International Organization of Securities Commissions (IOSCO)
- The 1990 Council of Europe Convention
- The Vienna Convention
- G-10’s Basel Committee statement of principles
CONCLUSION
The threat of money laundering is exceptionally villainous in nature. It hits not just at the foundation of a nation’s money related assembly yet, in addition, it is killing its social structure by financing aggressiveness to social movements. It is as an issue of incredible pain that despite having endless establishments and enactment, India is still under the cautiousness of the Interpol in light of her casual disposition towards the risk presented by money laundering. Thus, it is critical to grasp the developing danger of money laundering by administering and executing changes in the current law of Anti-money laundering avoidance. Both worldwide and local partners need to meet up by fortifying information sharing systems among them to adequately take out the issue of money laundering avoidance. The developing dangers of money laundering avoidance upheld by the rising revolutions should be inclined to with the similarly boosted Anti-Money Laundering instruments like massive information and man-made reasoning.
[1] Section 3 in Prevention of Money Laundering Act, 2002″.
[2] “Section 2(1)(d) in Prevention of Money Laundering Act, 2002”.
[3] Section 2(1)(u) in Prevention of Money Laundering Act, 2002″.
[4] “Section 2(1)(rb) of Prevention of Money Laundering Act 2002”.
[5] Section 6 of Prevention of Money Laundering Act 2002″.
[6] Sub-section 15 of Section 6 of Prevention of Money Laundering Act, 2002″.
[7] Section 42 in Prevention of Money Laundering Act, 2002″.
[8] Section 5 in Prevention of Money Laundering Act, 2002″.
[9] Section 24 in Prevention of Money Laundering Act, 2002″.
[10] Section 23 of Prevention of Money Laundering Act 2002″.
[11] ” Prevention of Money Laundering Act 2002 – Section 4 – Punishment for Money Laundering”. fiuindia.gov.in.
ABOUT THE AUTHOR
Shalini Ramachandran, 5th Year, Tamil Nadu Dr. Ambedkar Law University.