Author Sairab Sayed, GJ Advani law college , Mumbai
Abstract
It is not a fact unknown that crime and money are interrelated where there’s involvement of Money there shall be some type of crime committed ,Some crimes are committed for financial earnings one of similar crime is Money Laundering The Prevention of Money laundering Act 2002, was established to combat Money laundering, which involves disguising illegal gains as licit income, through placement,layering, and integration stages.It aims to to stop turning black Money into white by expropriating proceeds of crime. It directs banks, fiscal institutions, and designated businesses to corroborate guests( KYC),maintain records, and report suspicious deals to the Financial Intelligence Unit- India( FIU- IND). The Directorate of Enforcement( ED) enforces PMLA, with powers to attach property, hunt, seize, and make malefactors, who face imprisonment and forfeitures.
To the point
As the world is evolving and developing illegal conditioning are also on the rise which demanded a special legislation to control and cover similar activities.However, the use of illegitimate means to gain profit, like that of bribery also rises, If there’s no authority covering similar profitable offences it’ll affect in increase in crime and corruption rates thus there’s a need to having specific legislation to control similar conditioning Moreover.it will be a great trouble to international reputation when its character gets tarnished or when it becomes given as a Money laundering or terrorist backing haven.Further, indeed legal businesses and companies may have to face the impacts of similar illegitimate conditioning; for case, their access to the
world request may get narrower due to exorbitantly conservative examinations and system. Money laundering can weaken the Financial situation of a country illegal conditioning like Money laundering and terrorist backing retain the capability to harm the peace and harmony of a country’s profitable sector; further, they can also disrupt the stability of individual fiscal institutions in several ways.
Use of legal Jargons
Provisons in Prevention of Money laundering Act 2002( PMLA)
As per section 3 laundering of money is defined as It says, a person is shamefaced of the offence of Money laundering if he she is set up to have, directly or laterally An attempt to indulge, orConsciously supported, or With full knowledge is a party, or Has an involvement in
one or further of the below processes or conditioning associated with proceeds of crime, namely Section 4 of the PMLA, any existent who commits the crime of money laundering will be responsible to admit a discipline that involves rigorous imprisonment up to 3 times, which may extend to 7 times, and will also be reproachable to pay a penalty.Section 2( v) of the PMLA defines the termproperty’ as” any property or means of every description, whether carnal or ethereal, portable or irremovable,palpable or impalpable, and includes deeds and instruments evidencing title to, or interest in, similar property or means, wherever located”.farther, Section 2( d) of the PMLA defines the term’ attachment’ as” means prohibition of transfer, conversion,
disposition, or movement of property” by any direction given under the Provisins of the PML Act.”
The proof
Before the establishment of PMLA 2002 the illegal conditioning were governed by transnational bodies similar as fiscal Action task force( FATF) which handed original norms for administering authority,
Maintaining records of suspicious movement of plutocrat in and out of the country, record keeping of former-malefactors, Guiding banks and other fiscal institutions to follow protocols and Maintain client due-industriousness likewise plutocrat laundering in India is now government by Prevention of Money laundering act 2002 under the executive bodies are empowered to govern these cases some of them are Reserve bank of India( RBI), The securities and Exchange board of India( SEBI) The insurance Regulatory and development board of India( IRDAI), the legal norms and guidelines formed by these executive agencies
Case Laws
1)P Chidambaram v.Directorate Of enforcement
In 2007 Foreign investment Promotion Board( FIPB) blessing was granted to INX media to admit foreign
direct investment( FDI) of Rs 4.62 crores A disquisition was latterly on carried that revealed that Rs 305
crores was actually entered by INX media by the way of foreign direct investment This was a suffer violation
of the blessing. The central office of Investigation registered a FIR against INX media under section 8 and13( 2) of Prevention of corruption act 1988, The Enforcement Directorate also reserved the case under
section 3 and 4 of Prevention of plutocrat laundering Act 2002 This case stressed how black plutocrat is
brought into the nation and also invested as white plutocrat. The Appellant was latterly arrested by the CBI
2)Suresh kalamdi and others v.Union of India
Common wealth games scam was one of the most brutal money laundering cases in India it took place in 2010 in Delhi where the common wealth games were Held the amount of money involved in this scam was a whopping Rs 70,000 crores .This money was allocated for indian Sportspersons to help them take part in games but only half of the money was used for it’s original purpose the other half was deposited into the account of individuals who has the power to do so , It was discovered during investigations that the authorities hired companies that purposely over quoted the prices of new equipment’s and so on ,there were many transaction to other non partners of the organisation which was very suspicious This scam was carried out by Mr Suresh and his associates He was booked by CBI and served 10 months of imprisonment ,He was held guilty under IPC and corruption Act
3) Vijay malya v. State bank of India
The kingfisher Airline case is one of the most popular case in field of money laundering the scandal occurred between 2007-2017 Vijay malya owned kingfisher airlines entered into a merger with air Deccan they also purchased a low cost carrier which was in poor condition from Air Deccan to keep the carrier running the company incurred great loses and started borrowing money from multiple banks to keep the business afloat despite the efforts the company went into almost 50% debt of it’s net worth and Vijay malya has accumulated loans of 9000 crores in the process moreover Vijay malya transferred the borrowed loan amounts abroad into tax free havens There was an investigation and malya was convicted he was living in Uk at the time and an extradition request was sent currently be is living in the uk on a bail extradition warrant
Conclusion
The rise of technology and online banking has increased the risk of illegal activities and tracking the point of origin for fraud transactions it was the need of today’s world to have a specific jurisdiction and enforcement authorities to manage the risk of money laundering After the establishment of prevention of money laundering act 2002 we now have a legal framework and procedure and protocols that are put into place to minitize the damage of illegal transactions
FAQS
1)What is money laundering ?
Money laundering means transferring black money or illegal money in and out of a country or trying to legalise the money
2)Why was PMLA established?
There was a need to implement specific rules and regulations to monitor and enforce money laundering laws
3)What are different forms of money laundering?
The different forms of money laundering are
Corruption ,Shell companies ,Trade based laundering ,Smurfing etc
4)Punishment for money laundering under PMLA?
There could be imprisonment for 3-7 years that can also exceed Upto 10 years along with significant fines having no upper limit
