prevention of money laundering in india

8/12/2019 Prevention of Money Laundering in INDIA

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Presented by :M.Dhinesh Kumar

D.Jayakumar

G.Joginder


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What is Money Laundering ?According to Prevention of Money Laundering Act,2002

Whosoever directly or indirectly attempts to indulge or

knowingly assists or knowingly is a party or is actuallyinvolved in any process or activity connected with theproceeds of crime and projecting it as untainted propertyshall be guilty of offence of money-laundering.


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Money Laundering

General Meaning Money laundering generally refers to washing of, or converting the

proceeds or illegal profits generated from:

(i) Drug trafficking

(ii) Computer fraud Schemes

(iii) Prostitution Rings(iv) Insider Trading

(v) People smuggling

(vi) Arms, antique, gold smuggling

(vii) Prostitution rings

(viii) Financial frauds(ix) Terrorism Activities

(x) Bribery, Corruption, or

(xi) Illegal sale of wild life products and other specified predicate offences,etc , into Legitimate Money .


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Stages in Money Laundering Placement

Initial introduction of criminal proceeds into the stream ofcommerce

LayeringInvolves distancing the money from its criminal sourcethrough movements of money into different accounts andto different countries

Integration

The proceeds enter a legitimate business and the financialeconomy as untainted property


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Money Laundering & India $ 500 billion (Rs 22.5 lakh crore) has been spirited out of

India since independence

Indiasunderground economy is estimated at $640 billionswhich is estimated to about 50% of its GDP in 2008

There are at least 40 destinations that aggressively solicit

such funds but most popular is Swiss Bank

72.2% ($462 billion) of Illicit assets are held overseas,remaining 27.8% ($178 billion) are held domestically


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Financing of terrorism Money to fund terrorist activities moves through the

global financial system via wire transfers and in and out ofpersonal and business accounts. It can sit in the accounts

of illegitimate charities and be laundered through buyingand selling securities and other commodities, orpurchasing and cashing out insurance policies.

Although terrorist financing is a form of money

laundering, it doesntwork the way conventional moneylaundering works. The money frequently starts out cleani.e. as a charitable donation before moving to terroristaccounts. It is highly time sensitive requiring quickresponse.


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Macroeconomic impact Money laundering can have a range of severe

macroeconomic consequences on countries.

IMF has cited unpredictable changes in money

demand, prudential risks to the soundness of banking

systems, contamination of legal financial transactions,

and increased volatility of international capital flowsand exchange rates due to unanticipated cross-border

asset transfers.


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Macroeconomic impact The economic and political influence of criminal

organizations can weaken the social fabric; collectiveethical standards and ultimately the democraticinstitutions of the society. Organized crime caninfiltrate financial institutions, acquire control of largesectors of the economy through investment, or otherbribes to public officials and indeed governments

Money Laundering can also have a dampening effecton FDI if a countrys financial sectors are perceived tobe under control and influence of organized crime.


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FATF (Financial Action Task Force) Intergovernmental Organization founded in 1989

Purpose is to develop policies to combat Money

Laundering and Terrorism Financing 36 member nations including India.

15 countries are in FATF Blacklist as on November 2013.

Few important countries are Iran, Pakistan, Kenya,

Myanmar, Indonesia, North Korea, Vietnam, Yemen,Ethiopia, etc.


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ANY QUESTIONS ????


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Thank You

prevention of money laundering in india

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