PREVENTION OF MONEY LAUNDERING ACT

PROVISIONS

DEFINITION OF MONEY LAUNDERING

A person shall be guilty of the offence of money laundering when, he/she has directly or indirectly attempted to indulge, knowingly assisted, knowingly is a party, or is actually involved in one or more of the following processes or activities connected with proceeds of crime:

• Concealment

• Possession

• Acquisition

• Use

• Projecting as untainted property

• Claiming as untainted property

LIST OF OFFENCES

Under PMLA, the commission of any offence, as mentioned in Part A and Part C of the Schedule of PMLA will attract the provisions of PMLA. Some of the Acts and offences, which may attract PMLA, are enumerated below:

Part A
Narcotics Drugs and Psychotropic Substances Act, Prevention of Corruption Act, Antiquities and Art Treasures Act, Copyright Act, Trademark Act, Wildlife Protection Act, and Information Technology Act.

• specifies offences that are Part A offences, but the value involved in such offences is Rs 1 crore or more.
• deals with trans-border crimes and reflects the dedication to tackle money laundering across global boundaries.

Actions that can be Initiated Against the Person Involved in Money Laundering

• Seizure/freezing of property and records and attachment of property obtained with the proceeds of crime.
• Any person who commits the offence of money laundering shall be punishable with –
• Rigorous imprisonment for a minimum term of three years and this may extend up to seven years.
• Fine (without any limit).

Obligation of Banking Companies, Financial Institutions & Intermediaries

The bank, financial institutions and intermediary have obligations

To maintain records of all transactions and value as prescribed, whether such transactions comprise a single transaction or a series of transactions internally connected to each other when such series take place within a month.

• To inform the director within the prescribed time.
• To verify the identity of its clients in a prescribed manner
• To maintain records of all transactions and value as prescribed, whether such transactions comprise a single transaction or a series of transactions internally connected to each other when such series take place within a month.
• To inform the director within the prescribed time.
• To verify the identity of its clients in a prescribed manner.
• To maintain records of documents evidencing the identity of its clients and beneficial  owners  as  well  as  account  files  and business correspondence relating to its clients.