Rishabh Tiwari Dissertation

“University of Petroleum and Energy Studies, Dehradun”, 2019
MONEY LAUNDERING: CRITICAL PERSPECTIVES OF

ROLE PLAYED BY BANKING SECTOR IN UK AND INDIA
AUTHOR: ADITI KUKREJA
Sap ID – 500064520
Roll No.- 138
Course: B.A., L.L.B. (Hons.) with Specialization in Criminal Laws
Submitted under the guidance of: Asst.Prof. MEHREEN

MANSOOR
This dissertation is submitted in partial fulfillment of the

degree of B.A., LL.B. (Hons.)
SCHOOL OF LAW
UNIVERSITY OF PETROLEUM AND ENERGY STUDIES
DEHRADUN
2021
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CERTIFICATE
This is to certify that the research work entitled “Money Laundering: Critical
perspectives of role played by banking sector in UK and India” is the work done by Aditi
Kukreja under my guidance and supervision for the partial fulfillment of the requirement
of B.A.,LL.B.(Hons)degree at School of Law, University of Petroleum and Energy
Studies, Dehradun.
Signature & Name of Supervisor
Designation
Date
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DECLARATION
“I declare that the dissertation entitled “Money Laundering: Critical perspectives of role
played by banking sector in UK and India” is the outcome of my own work conducted
under the supervision of Asst.Prof. Mehreen Mansoor, at School of Law, University of
Petroleum and Energy Studies, Dehradun”.
I declare that the dissertation comprises only of my original work and due
acknowledgement has been made in the text to all other material used.
Signature & Name of Student
Date
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TABLE OF CONTENTS
Chapter 1
Introduction
1.1 STAGES OF MONEY LAUNDERING
1.2 LAUNDERING MECHANISM
1.3 INDIAN PERSPECTIVE
Chapter 2
ANTI MONEY LAUNDERING LAWS
2.1 THE PREVENTION OF MONEY LAUNDERING ACT 2002
 Objectives
 Key concepts
 Proceeds
 Authorities
2.2. ANTI MONEY REGULATORS IN INDIA

2.3SECURITY AND EXCHANGE BOARD OF INDIA
Chapter 3
INTERNATIONAL PERSPECTIVE
3.1 BASLE COMMUNITTEE STATEMENT OF PRINCIPLES
3.2 THE FINANCIAL ACTION TASK FORCE
3.3 MONEY LAUNDERING IN UK BASED ON POCA
Chapter 4
IDENTIFYING RISKS, STRATEGIC POLICIES AND PRIORITIES
4.1 INVESTIGATION, PROCECUTION AND CONVICTION
Chapter 5
CONCLUSION AND SUGGGESTION
Bibliography
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LIST OF ABBREVIATIONS
AML Anti-Money Laundering
ARIN American Registry for Internet Numbers
CARIN Camden Asset Recovery Inter-Agency Network
CFT Countering the Financing of Terrorism
IO Immediate Outcome
LEA Law Enforcement Authority
ML Money Laundering
MLA Mutual Legal Assistance
OSCE Organization for Security and Co-operation Europe
TF Terrorist Financing
UNODC United Nations Office on Drugs and Crime
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TABLE OF CASES
PAREENA SWARUP vs. UNION OF INDIA
UNION OF INDIA vs. HASAN ALI KHAN & OTHERS
ANOSH EKKA vs. CENTRAL BUREAU OF INVESTIGATION
“HARI NARAYAN RAI vs. THE UNION OF INDIA”
ARUN KUMAR MISHRA vs. DIRECTORATE OF ENFORCEMENT
“SHIV KANT TRIPATHI vs. STATE OF U.P”
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ACKNOWLDGEMENT
I have taken efforts in this project. However, it would not have been possible without the
kind support and help of many individuals. I would like to extend my sincere thanks to all
of them.
I am highly indebted to Mrs. Shilpi Yadav for his guidance and constant supervision as
well as for providing necessary information regarding the project & also for his support
in completing the project.
I would also like to thank Mr.Prakhar Gangulyfor their kind support.
I would like to express our gratitude towards our teachers & library staff of University Of
Petroleum And Energy Studies for their kind co-operation and encouragement which help
me in completion of this project.
My thanks and appreciations also go to our colleague in developing the project and
people who have willingly helped me out with their abilities.
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1. MONEY LAUNDERING—
WHAT IS IT?
According to Robinson, “Money laundering is called what it is because that perfectly

describes what takes place -dirty, money is put through cycle of transactions, or washed,
so that it comes out the other end as legal, or clean, money. In other words, the source
of illegally obtained funds is obscured through a succession of transfers and deals in
order that those same funds can eventually be made to appear as legitimate income”.1
Crime can be extremely profitable2. Cash created in substantial volume by illicit exercises
must be "washed," or made to look real, before it very well may be openly spent or
contributed. Illegal tax avoidance is where the returns of wrongdoing are changed into
obviously authentic cash or different resources. In the present period, tax evasion is the
consuming issue. It occurs in pretty much every nation on the planet. Fundamentally all
nations on the planet are pretty much compelled to collaborate in the worldwide battle
againstmoney laundering. “To launder cash is to mask the cause or responsibility for
picked up assets to influence them to seem authentic.Thrashing legitimately acquired
money to keep away from taxation also qualifies as money laundering.Money launderers
endlessly looking for new routes for laundering their funds. Launderers tend to move
their networks to countries and financial systems with weak or ineffective counter
measures. This activity has a serious impact on a nation’s economy. Although practicing
activity in Indian economy and what appropriate actions have been laid down to control
all financing activity. However study is based on observations and analysis of case
studies. Center for Defense Information, and was used to identify the twelve largest
international criminal activities in the world”.
1
https://www.sc.com/fightingfinancialcrime/av/SCB_Fighting_Financial_Crime_Deep_dive_What_is_mon
ey_laundering_August_2017.pdf
2
“Transnational Crime in the Developing World.”
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In“simple words, it can be defined as the act of making money that comes from one
source to look like it comes from another source. Money laundering in India is commonly
referred to as Hawala transactions. Hawala is a method without any real movement to
transfer money. Hawala broker transactions are performed without promissory notes due
to the highly trust-based”system. Reassuring traffickers, embezzlers, degenerate
lawmakers and open authorities, mobsters, fear mongers and rascals are the most widely
recognized types of hoodlums that need cash laundering.
Medication traffickers3are in genuine need of good washing frameworks since they

bargain only in real money, whichcauses a wide range of coordinations issues. Criminal
exercises, for example, psychological oppression, unlawful arms deals, financialcrimes,
pirating, or illegal medication dealing create colossal wholes of cash and criminal
organizationsneed to figure out how to utilize these assets without arousing doubts about
their unlawful root.
INTERPOL's definition of money laundering is: "any act or attempted act to conceal or
disguise the identity of illegally obtained proceeds so that they appear to have originated
from legitimate sources".
The“act of money laundering is done with the intention to conceal money or other assets
from the State so as to prevent its loss through taxation, judgment enforcement or blatant
confiscation. The criminals herein try to disguise the origin of money obtained through
illegal activities to look like it was obtained from legal sources because otherwise they
will not be able to use it as it would connect them to the criminality and the law
enforcement officials would seize it.
Article 1 of EC Directive defines Fund Laundering as “The conversion of property,

knowing that such property is derived from serious crime, for the purpose of concealing
or disguising the illicit origin of the property or of assisting any person who is involved in
committing such an offence(s) to evade the legal consequences of his action, and the
concealment or disguise of the true nature, source, location, disposition, movement, rights
The illegal drug trade or drug trafficking is a global black market dedicated to the cultivation,

3
manufacture, distribution and sale of drugs that are subject to drug prohibition laws.
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with respect to, or ownership of property, knowing that such property is derived from
serious crime.”
Drug traffickers, embezzlers, corrupt politicians and public officials, mobsters, terrorists
and con artists are the most common types of criminals that need to launder money. Drug
traffickers need good laundering systems because they deal with cash almost exclusively,
which causes all kinds of logistics problems. Criminal activities such as terrorism, illegal
arms sales, financial crimes, smuggling or illicit drug trafficking generate enormous
amounts of funds and criminal organizations need to find a way to use these funds
carefully through their smuggling origin.
The rationale for the creation of the offence is that it is wrong for individuals and
organizations to assist criminals to benefit from the proceeds of their criminal activity or
to facilitate the commission of such crimes by providing financial services to
them”.4Money laundering is not, however, restricted to drug trafficking. It is associated
with nearly all sorts of "profit crime," including ordered crime and white collar crimes,
such as immovable fraud and savings and loan abuse that has marked the last decade.
One financial specialist records various (not every criminal) reasons for wanting to hide
cash, keeping business and individual resource esteems disintegrated by legitimate
methods (e.g. claims or separation procedures); tax avoidance, either close to home or
corporate; capital departure from one nation to different nations, activated by antagonistic
changes in pecuniary, political, and social Such as "opportunity warriors" spying and
support; carrying booty. The money laundering itself was not illegal until 1986 except for
the underlying (or predicate) crimes it helped cover up.
As indicated by Robinson, "Money laundering is called what it is on the grounds that it

impeccably portrays what happens - filthy, cash is put through a cycle of exchanges, or
washed, with the aim that it turns out to be the opposite end as lawful, or clean, money.
As such, the wellspring of mistakenly acquired assets is clouded by a progression of
movements and arrangements all together that those eqs are clouded together.
4
Money “laundering was first defined as an independent crime in the Money Laundering Control Act of
1986, codified at Sections 1956 and 1957 of Title 17 of the U.S. Code”.
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Falsehood can be highly profitable2. Money made by unlawful activities in a generous

volume must be "washed" or made to look genuine before it can be spent or contributed
directly.Illicit expense evasion is the place the profits of bad behavior are changed into
clearly bona fide money or distinctive assets. In the present time frame, tax avoidance is
the devouring issue. It happens in practically every country on the planet. On a very basic
level all countries on the planet are practically constrained to work together in the overall
fight against tax evasion. To wash money is to cover the reason or duty regarding
grabbed advantages for impact them to appear to be true. Covering up truly gained cash
to maintain a strategic distance from tax collection likewise qualifies as tax evasion. Tax
criminals consistently searching for new courses for washing their funds.
Launderers will in general move their systems to nations and money related frameworks
with feeble or incapable counter measures. This movement seriously affects a country's
economy. In spite of the fact that rehearsing action in Indian economy and what fitting
activities have been set down to control all financing movement. Anyway look into is
basedon perceptions and investigation of contextual analyses. 5
2. "Transnational Crime in the Developing World."The report gave data from the UN, the
International Labor Organization,the Organization for Economic Cooperation and
Development, and the Center for Defense Information, and was utilized to recognize the
twelve biggest universal criminal exercises on the planet. In basic words, it tends to be
characterized as the demonstration of profiting that comes fromone source to seem as
though it originates from another source. In India, illegal tax avoidance is prominently
known as Hawala exchanges. Hawala3 is a technique for exchanging cash with no real
movement.Transactions between Hawala agents are managed without promissory notes
on the grounds that the framework is heavilybased on trust. The most broadly perceived
.
5
https://www.sc.com/fightingfinancialcrime/av/SCB_Fighting_Financial_Crime_Deep_di
ve_What_is_money_laundering_August_2017.pdf
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sorts of hooligans who need to wash money are sedate traffickers,embezzlers, degenerate
officials and open specialists, mobsters, dread mongers and blackguards. Prescription
traffickers4are in veritable need of good washing structures since they deal just in
genuine cash, whichcauses a wide scope of collaborations issues. Criminal activities, for
instance, mental abuse, unlawful arms bargains, financialcrimes, pilfering, or illicit
prescription managing make giant wholes of money and criminal organizationsneed to
make sense of how to use these advantages without stimulating questions about their
unlawful root. The motivation behind these criminal affiliations is to make benefits for
the social affair or for one of its individual members.When a criminal movement creates
considerable benefits, the individual or gathering included insuch exercises course the
assets to safe sky by camouflaging the sources, changing the structure or movingthe
assets to a spot where they are more averse to draw in consideration. The rationale of
controlling the drugtrial is that benefit propels tranquilize deals, and in light of the fact
that most deals are in real money, the beneficiary of cashhas to discover some method for
changing over these assets into utilizable monetary assets that appear to havelegitimate
causes.
4.The illicit medication exchange or medication dealing is a worldwide underground
market devoted to the development, production, dispersion and clearance of medications
that are liable to tranquilize denial laws. Most purviews deny exchange, with the
exception of under permit, of numerous sorts of medications using drug preclusion laws.
Illegal tax avoidance is where the returns of wrongdoing are changed into obviously
authentic cash or different resources. It is the preparing of criminal continues to
camouflage its illicit beginning. In straightforward words, it very well may be
characterized as the demonstration of profiting that originates from one source to appear
as though it originates from another source. INTERPOL's meaning of tax evasion is: "any
demonstration or endeavored act to cover or camouflage the character of illicitly gotten
continues with the goal that they seem to have begun from genuine sources".
The demonstration of illegal tax avoidance is finished with the expectation to disguise
cash or different resources from the State to keep its misfortune through tax assessment,
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judgment implementation or unmitigated appropriation. The culprits in this endeavor to

mask the inception of cash acquired through illicit exercises to appear to have been
obtained from lawful sources in view of the fact that otherwise they are not likely to use
it as it would associate them with guiltiness and the law enforcement authorities would
catch it.
Article 1 of EC Directive characterizes FundLaundering as "The change of property,
realizing that such property is gotten from genuine wrongdoing, to conceal or
camouflaging the unlawful cause of the property or of helping any individual who is
engaged with carrying out such an offence(s) to avoid the lawful results of his activity,
and the covering or mask of the genuine nature, source, area, manner, development,
rights concerning, or responsibility for, realizing that such property is gotten from
genuine wrongdoing." 6
The most widely recognized kinds of culprits who need to launder cash are sedate
dealers, thieves, degenerate government officials and open authorities, mobsters, fear
based oppressors and extortionists. Medication dealers are in genuine need of good
washing frameworks since they bargain only in real money, which causes a wide range of
coordinations issues. Criminal exercises, for example, fear based oppression, unlawful
arms deals, monetary violations, sneaking, or illegal medication dealing produce
tremendous entireties of fundand criminal associations need to figure out how to utilize
these assets forgot initiation watchful through their stash cause.
The motivation behind these criminal organisations6 is to create benefits for the gathering
or for one of its individual individuals. At the point when a criminal movement produces
generous benefits, the individual or gathering engaged with such exercises course the
assets to safe sky by camouflaging the sources, changing the structure or moving the
assets to a spot where they are more averse to pull in consideration. The rationale of
controlling the medication cash preliminary is that benefit inspires sedate deals, and in
light of the fact that most deals are in real money, the beneficiary of money needs to
discover some method for changing over these assets into utilizable budgetary assets that
6
Money Laundering – “A Brief History.http://www.sid.in-berlin.de/nedkelly-
world/moneylaunderingbriefhistory.html27 Quirk”, Peter J. 1997 "Tax evasion: Muddying the
Macroeconomy." Finance and Development.
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seem to have legitimateorigins.7 The target of condemning tax evasion is to remove

benefit from the wrongdoing. The reason for the production of the offense is that it isn't
right for people and associations to help lawbreakers to profit by the returns of their
criminal action or to encourage the commission of such violations by giving money
related administrations to them.
Illegal tax avoidance, however it may be, is not limited to reassuring business. It is
related to nearly a wide range of "wrongdoing for benefit," including, for example, sorted
out wrongdoing and cubicle violations, land extortion and investment funds and credit
manipulations denoted in the last decade. One budgetary expert records different
distinctive reasons (few out of each unusual criminal) for wanting to hide money, keeping
down business and individual asset considerations through authentic techniques (for
example, case or detachment systems) ; charging shirking, either near and dear or
corporate ; capital take - off from one country to different countries, driven by hostile.
1.1 “Money Laundering is a procedure of three phases”–Positioning stage, layering

stage, and integration stage – which may occur or may occur at the same time, or stage by
stage.As the procedure of tax evasion has turned into the focal point of consideration,
illegal tax avoidance cases have been dissected truly, completely and methodically. The
regular highlights of tax evasion are concealing the genuine proprietorship and inception
of the assets, dealing with the returns in great condition, changing the returns utilizing
modern strategies and steady quest for benefit or monetary benefit with raised inspiration.
Illegal tax avoidance has occurred in some structure insofar as benefit has existed. The
most conspicuous strategies utilized by tax criminals are utilization of the progressed
innovative methods, proficient help and transnational development of assets by exploiting
contrasts in language and criminal equity frameworks in various nations.
7
Illegal tax avoidance was first characterized as a free wrongdoing in the “Money Laundering Control Act
of 1986, classified at Sections 1956 and 1957 of Title 17 of the U.S. Code”.
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Placement Stage:8It is the juncture at which the financial system introduces criminally
consequent funds. At this stage, the launderer often inserts the "dirty" money in the form
of cash bank deposits into a lawful financial institution. This is the most dangerous phase
of the washing process as a lot of money is completely obvious, and banks are required to
report high-esteem exchanges. To control the dangers, a lot of money is separated into
less obvious littler totals that are then kept straightforwardly into a ledger, or by buying a
progression of financial instruments (checks, cash orders, and so forth.) that are then
gathered and stored into records at another area.
Layering Stage:9 “It is the stage at which complex financial transactions are carried out
in order to camouflage the illegal source. At this stage, the launderer engages in a series
of conversions or movements of the money in order to distant them from their source. In
other words, the money is sent through various financial transactions so as to change its
form and make it difficult to follow. Layering may comprise of a few bank-to-bank
exchanges, wire exchanges between various records in various names in various nations,
making stores and withdrawals to ceaselessly differ the measure of cash in the records,
changing the cash's money, and obtaining high-esteem things, for example, houses,
pontoons, jewels and autos to change the type of the cash”. This is the most perplexing
advance in any laundering plan, and it's tied in with making the starting point of the cash
as difficult to follow as could be expected under the circumstances. In a few examples,
the launderer may mask the exchanges as installments for merchandise or
administrations, along these lines giving them a real appearance.
Integration stage:“It is the final stage at which the ‘laundered’ property is re-introduced
into the justifiable economy. At this stage, the launderer force choose to invest the funds
into real estate, luxury assets, or business ventures. At this point, the launderer can use
the money without getting caught. It's hard to get a launderer amid the combination
8
Scott, David. 1995. “Money Laundering and International Efforts to Fight It. Public Policy of the Private
Sector,” Public Policy for the Private Sector, Note No. 48, The World Bank.
9
Cash converted into Monetary Instruments – Once the placement is successful within the financial
system by way of a bank or financial institution, the proceeds can then be converted into monetary
instruments. This involves the use of banker’s drafts and money orders.Material assets
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organize if there is no documentation amid the past stages”. Not all illegal tax avoidance
interactions include every one of the three unique stages, and some may to be sure
include more. In any case, the three phase order is a helpful disintegration of what can
now and again be an intricate procedure.
1.2 LAUNDERING MECHANISMS
The different methods used to perform it are a striking feature of money laundering.
Some of the most important mechanisms are:
ConstitutingSecurities: “This is also known as smurfing. This is a method of placement
whereby cash is broken into smaller deposits of money, used to defeat suspicion of
money laundering and avoid anti-money laundering reporting requirements”.
Informal value transfer systems: “These which include hawalas, an arabic word for a
particular international underground banking system. Handed cash in country A, a
hawaladar cash turn it into cash (or sometimes gold) in country B. The hawala includes
the complete service from placement to integration. Similar services are provided under
other names in other parts of the world, such a fe’chien in China”.10
Legitimate business ownership: “Dirty money can be added to the cash revenues of a
legitimate business enterprise, particularly those that are already cash intensive, such as
restaurants, bars and video rental stores. The additional cash is essentially added to the
bill. The expense of this washing technique is the duty paid on the pay”. With
organizations whose exchanges are better recorded; solicitations can be controlled to
reenact legitimacy. A somewhat progressively complex plan may enable a criminal to
benefit twice in setting up a traded on an open market front organization with a genuine
business reason first from the washed assets mixed together with those created by the
business and second by pitching partakes in this organization to accidental financial
specialists.11
10
Property Dealing ,.Front Companies and False Loans ,.Foreign Bank Complicity ,.False Import/Export
Invoices
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(ii) Development of opium poppy, coca shrubbery or cannabis plant with the final
objective of creating opiate drugs contrary to the provisions of the 1961 Convention and
the 1961 Convention as corrected ; (iii) ownership or purchase of any opiate sedate or
psychotropic substance with the final objective of any of the exercises referred to in (I)
above ;
1.3 THE INDIAN PERSPECTIVE
“In line with the topic of discussion, an attempt is now made to comprehend the scenario
of how money laundering has affected the financial system in India, and how laws and
procedures have been formulated to counter money laundering, as such.
On money laundering, India has been vulnerable and combative, to say in a nutshell. The
country has been classified as a high-risk zone in terms of money laundering. Out of 152
countries, India was ranked 79th in the year 2015 and out of 149 countries, India was
ranked 78th for the year 2016, by the Anti-Money Laundering (AML) Basel Index.
Money laundering activities have also been the leading cause behind a thriving black
economy which exists in India. Very momentarily explained, black economy means an
economic ecosystem which runs and sustains itself on the availability of black money.
Black money14 refers to cash saved from one’s black income that is income which is
earned from illegal or means which are unaccounted for, as discussed in the preceding
clauses. Moreover, such exercises in addition make roads for presence of parallel
economies, whereby part of an exchange is paid for with accounted sums and the other
with unaccounted sums, and the merchants in such manner make utilization of
underestimated solicitations to do exchanges in that capacity”.
2. Against Money Laundering Laws in India
11
Money launderers often send money through various "offshore accounts" in countries that have bank
secrecy laws, meaning that for all intents and purposes, these countries allow anonymous banking.
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The progressive governments in India, since autonomy, monitoring the ground

substances, have been at different occasions, proactive in the definition of laws and
legitimate systems to counter the impacts of tax evasion and break the current
systems.
In India, before the authorization of the Prevention of Money Laundering Act 2002,
various rules tended to insufficiently the issue being referred to.
Tax avoidance is an overall danger that can't be contained by any nation alone. The
Prevention of Money Laundering (Amendment) Bill 2011 was required in context on
India being a fundamental individual from the Financial Action Task Force and to
bring balancing activity of tax avoidance establishment keeping pace with overall
models. The said Bill is up 'til now pending for underwriting in the Parliament.12
The significant bits of enactment going before the Prevention of Money Laundering
Act, 2002 or the PMLA, entomb alia, which straightforwardly or in a roundabout way
intend to check and battle illegal tax avoidance exercises are noted and recorded in
the accompanying way:
The Conservation of Foreign Exchange and Prevention of Smuggling Activities

Act16, 1974.
This was passed in the year 1974 in facilitation of the administration attempts to hold
outside trade inside the nation by accommodating 'preventive confinement in specific
cases for the reasons for protection and increase of remote trade and aversion of
pirating exercises and for issues associated therewith'.
12
Under section 2(a) of this Act, a ‘Benami transaction’ is defined as follows:
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The Act was authorized to give wide powers to the official to confine people on the
anxiety of their inclusion in pirating exercises. It has been viable since nineteenth
December, 1974 and had canceled the Maintenance of Internal Security Act, 1970
COFEPOSA or the Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act is an Act of the Parliament go in 1974 amid organization of Indira
Gandhi, endeavoring to hold remote cash and avoid sneaking.
The Act depends on the idea of Preventive Detention, which separated from being a
pioneer heritage, is likewise given expressly in our constitution as 'the fundamental
malevolence', and laws exist under Article 22 of the Indian Constitution for the
equivalent for reasons identified with security of the state and support of open
request. According to the arrangements of segment 10 the recommended times of
detainment are 1 (one) to 2 (two) years.
“One detectable component in regard of this bit of enactment is the finished

negligence of any legal continuing in regard of any move made in regard of this law.
All choices in assistance of the Act might be taken by the state governments or the
focal government”.13
13
“Benami transaction means any transaction in which property is transferred to one person for a
consideration paid or provided by another person;”
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2.1 The Prevention of Money Laundering Act, 2002
The PMLA is an Act of the Parliament of India authorized to counteract tax evasion
and to accommodate seizure of property got from illegal tax avoidance.
“The PMLA and the Rules exhorted there below come into power with effect from
July 1, 2005. The Act and Rules told there under compel responsibility on keeping
cash associations, budgetary establishments, and center individuals to affirm
character of clients, keep up records and outfit information in supported structure to
the fit authorities molded and appointed in such way [e.g., Financial Intelligence Unit
– India (FIU-IND)]. The Act was along these lines adjusted in the years 2005, 2009
and 2012”.
The Objectives:
The PMLA tries to battle acts influencing to tax evasion in India and in perspective
on this, it predominantly has three fundamental destinations:
•To forestall and control tax evasion
•To reallocate and catch the property got from the laundered cash; and
•To manage some other issue associated with tax evasion in India.
Section 2(1) (p) of Prevention of Money Laundering Act, 2002 (hereinafter PMLA-
02) characterizes Money-
As washing has the significance doled out to it in Section 3. Segment 3

accommodates offense of cash washing – whosoever specifically or by implication
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endeavors to enjoy or intentionally helps or purposely is a party or is really engaged

with any procedure or movement associated with the returns of wrongdoing and
anticipating it as untainted property will be blameworthy of offense of illegal tax
avoidance.
Key concept in the PMLA
The PMLA, it might be repeated, is the most comprehensive bit of enactment

intended to distinguish acts and works on relating to illegal tax avoidance and battle
the impacts thereof. Inside its ambit, various ideas have been characterized, depicted
and managed in detail, which would have an immediate reference to illegal tax
avoidance exercises.
Some of such key-ideas are talked about hereinafter in the accompanying way:
Illegal tax avoidance: The idea of reserve cleaning or tax evasion is depicted under
area 3 of the PMLA, in a way to incorporate those exercises whereby there are
'endeavors to enjoy or help other individual' or progress toward becoming 'engaged
with any movement associated with the returns of wrongdoing and anticipating it as
untainted property' are said to be exercises which might be demonstrations of tax
evasion.
Continues of wrongdoing: This is a standout amongst the most vital terms to be seen
seeing that the point is to comprehend the extent of the term illegal tax avoidance
inside the PMLA. This term is characterized inside the PMLA to depict properties
and resources gained out of an illicit movement.
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Helpful Owners14: Activities given impact with the ulterior thought process to launder
cash, as a rule work under a cover, which makes it important to have the cloak lifted out
of fiscal records and recognize the development of cash, and furthermore distinguish the
people profiting out of such undertakings. Which is the reason, the term advantageous
proprietor has been utilized in numerous spots all through the PMLA.
Expense System
“The term payment system has been defined as a system that enables payment to be
effected between a person making a payment (designated as a ‘payer’ in the PMLA) and
a beneficiary, involving clearing, payment, or settlement service or all of them. It
includes the systems enabling credit card, debit card, smart card, money transfer or
similar operations”.
Adjudicating Authority
“The Adjudicating Power is the expert appointed under the PMLA by the focal
government through notice to do its task, strengths, and specialist. It chooses whether any
property that has been joined or seized is involved in tax evasion. The Adjudicating
Authority will not be bound by the strategy established somewhere near the 1908 Code of
Civil Procedure, yet it will be guided by regular equity standards and subject to PMLA's
alternative arrangements”. The Adjudicating Authority will have the strength to direct its
own method. Assumption between related undertakings where there is at least two
connected between illegal tax avoidance. Exchanges and at least one such exchange, for
reasons of arbitration or appropriation, are or will eventually be engaged in tax evasion.
Non-Profit Organizations
14
The term ‘beneficial owner’ is “defined under section 2(1) clause (fa) of the PMLA to mean a person who
ultimately owns or controls a client regarding a reporting entity, or someone on whose behalf a
transaction”.
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' Non - profit organizations ' (NPO) means anybody or organization registered as a
trust or culture under the Societies Registration Act, 1860 or any similar State
legislation or corporation registered under ' Section 25 of the 1956 Companies Act. '
Organization as a customer: “Pursuant to the arrangements of the segment 3(a) (ii), in the
occasion the client is an organization, the useful proprietor is the normal individual/s,
who, in the case of acting alone or together, or through at least one juridical individual,
has/have a controlling possession intrigue or who practice control through other means.
And in compatibility of the above arrangements the accompanying ideas utilized bear the
implications credited in the accompanying way”.
On the off chance that any Person holding a Controlling Ownership Interestin Franchisee
turns out to be rationally awkward or kicks the bucket, the enthusiasm of such Person
might be Transferred subject to the terms of this Section 17.4 and just in the event that:
(I) any such Transfer will be made inside a year after such Person is considered rationally
bumbling or bites the dust; and (ii) the commitments of Franchisee will be fulfilled
pending the Transfer and the Hotel is worked in consistence with this Agreement.
Installment System
The period installment framework has characterized as a framework that empowers

installment to be affected flanked by an individual creation an installment (assigned
as a 'payer' in the PMLA) and a recipient, including clearing, installment, or
settlement administration or every one of them. It incorporates the frameworks
empowering Mastercard, charge card, keen card, cash exchange or comparative
activities.
Detailing Entities
23 | P a g e
The PMLA further has arrangements relating to specific units known as 'detailing
substances' inside its ambit. Inside proviso of segment 2(1), announcing substances
incorporate financial organization, monetary establishment, go-between or an
individual who might complete a business or calling explicitly assigned inside the
PMLA.
Assigned Business or Profession
Inside the ambit of the PMLA,15 certain organizations and callings and the people
related therewith are additionally included inside the importance of a 'revealing
element'. Such people incorporate the followings
•A individual carrying on exercises for playing rounds of chance for money or kind,
and incorporates such exercises related with gambling club;
•A Registrar or Sub-Registrar named under Section 6 of the Registration Act, 1908,

as might be informed by the Central Government.
•Real bequest specialist, as might be informed by the Central Government.
•Dealer in valuable metals, valuable stones and other high esteem products, as might
be informed by the Central Government.
15
India is likewise frightened by this region and IRDA has issued couple of rules on hostile to illegal
tax avoidance program for guarantors, Circular Ref: 043/IRDA/LIFE/AML/MAR-06, accessible
athttp://fiuindia.gov.in/downloads/IRDA.pdf, keep going got to on November 15, 2008 45 Anti-Money
Laundering: Efforts in the Securities Industry, United States General Accounting Office, Report to the
Chairman, Permanent Subcommittee on Investigations, Committee on Governmental Affairs, U.S.
Senate, accessible at http://www.gao.gov/new.items/d02111.pdf keep going got to on November 10,
2008
24 | P a g e
•Person occupied with supervision and organization of money and fluid securities for
the benefit of different people, as might be told by the Central Government; or
•Person continuing such different exercises as the Central Government may, by

notice, so assign, every now and then.
Method under the PMLA
The detailing substances are entrusted under the arrangements of the PMLA to play
out the significant exercises ordered by the law. In their particular limits are
committed to play out specific capacities, which compactly incorporate the
followings:
• Protection of records;
•Endow data relating to such records;
•Substantiation of character of its customers via doing due determination systems;
•Identification of helpful proprietor, in regard of the exchanges embraced with its

different customers.
For every one of the commitments which are to be carried by an announcing element, the
PMLA explicitly offers prohibitions to detailing elements against any sort of common or
criminal procedures. Such avoidance or exception additionally reaches out to the chiefs
as well as workers of the concerned revealing element.
The important arrangement in such manner happens under area 23 of the PMLA.
25 | P a g e
Basically, under PMLA, the weight of verification lies on the individual who
guarantees that the returns of wrongdoing claimed to be engaged with Money-
Laundering, are not associated with Money-Laundering. The assumption against the
denounced or any outsider is adequate to release the onus of the experts under PMLA.
Indeed, even on account of Records, and Properties, which are found in the ownership
or control of any individual throughout a review or inquiry under the Act (Section 16,
Section 17 and Section 18 of PMLA), under an assumption is raised that such records
or property has a place with such individual, and the substance of such records are
valid, and further that marks and any piece of such records close by composing of a
specific individual or in the hand-composing of such individual, the assumptions with
regards to the records in property are total, and the onus to demonstrate the equivalent
generally, lies on such individual. Obviously, an individual blamed for an offense
under Section 3 of PMLA, whose property is connected and continued against for
Confiscation, will release the onus of verification (Section 24) vested in him by
revealing the wellsprings of his Income, Earnings or Assets, out of which or means by
which he has gained the property joined, to release the weight that the property does
not comprise continues of wrongdoing.
Connection
Characterized under area 2 proviso 1(d), the term connection alludes to the technique
for exchange, transformation, manner or development of property in compatibility of
a request go as per part III of the PMLA.
Sorts of Penalties under the PMLA
The PMLA is a bit of criminal enactment, where assumption of blame has priority
and the weight of verification lies on the individual blamed for an infringement.
26 | P a g e
Following this there are sure punishments which are endorsed inside the
arrangements of the PMLA.
The PMLA recommends that any individual discovered liable of tax evasion will be
culpable with thorough detainment from three years to seven years and where the
returns of wrongdoing included identify with any offense under section 2 of Part An
of the Schedule (Offenses under the Narcotic Drugs and Psychotropic Substance Act,
1985), the most extreme discipline may stretch out to 10 years rather than 7 years.
Forces of connection of spoiled property Appropriate experts, delegated by the Govt

of India, can temporarily append property accepted to be "continues of wrongdoing"
for 180 days. Such a request is required to be affirmed by a free Adjudicating
Authority.
The Authorities – PMLA
Area 48 of the PMLA sets out the arrangement on the experts holding capability
under the Act. The experts are as per the following.
•Director or Additional Director or Joint Director,
•Deputy Director,
•Assistant Director, and
•such extra executives/officers whose arrangement might be regarded important under

the arrangements of the PMLA.
Extraordinary Court and Appellate Tribunals
Exceptional Courts
27 | P a g e
Segment 43 of Prevention of Money Laundering Act, 2002 (PMLA) says that the
Central Government, in counsel with the Chief Justice of the High Court, will, for
preliminary of offense culpable under Section 4 of the PMLA, by notice, assign at
least one Courts of Session as Special Court or Special Courts for such territory or
regions or for such case or class or gathering of cases as might be indicated in the
notice.
Segment 43 and the significant ensuing arrangements in such manner.
Preliminary under Special Courts framed under the PMLA
Unique courts shaped under the arrangements of the PMLA are engaged to take
cognisance of protests made by an expert approved for this sake under the PMLA.
What's more, regardless of whether the procedures under the arrangements of the
PMLA are being directed by a court other than an extraordinary court under the
PMLA, at that point the procedures could be focused on the uncommon courts framed
under the PMLA. The applicable arrangements under the PMLA happen under area
44 of the PMLA.
Redrafting Tribunals
An Appellate Tribunal16 under the PMLA is a body which might be selected by the
(association) Government of India. It is enabled to hear offers against the requests of
the Adjudicating Authority, and some other specialist under the PMLA.
“Schedule Offence”
16
Tribunals are adjudicatory body which have thier jurisdiction restricted to any field or domain and formed
under some special legislation.The special legislation under which the tribunal is formed may also mandate
the formation of an appellate tribunal so that appeal from tribunal can be hear by appellate tribunal.
28 | P a g e
“The offences listed in the Schedule to the Prevention of Money Laundering Act, 2002
are scheduled offences in terms of Section 2(1)( y) of the Act”.
“The scheduled offences are divided into two parts – Part A& Part C. In part A, offences
to the Schedule have been listed in 28 paragraphs and it comprises of offences under
various pieces of legislations relating to criminal activities which includes – Indian Penal
Code, offences under Narcotic Drugs and Psychotropic Substances, offences under
Explosive Substances Act, offences under Unlawful Activities (Prevention) Act, offences
under Arms Act, and so on. Part ‘C’ deals with trans-border crimes, and is a vital step in
tackling Money Laundering across International Boundaries. Prior to 15th February,
2013, i.e., the date of notification of the amendments carried out in PMLA, the Schedule
also had Part B for scheduled offences where the monetary threshold of rupees thirty
lakhs was relevant for initiating investigations for the offence of money laundering.
However, all these scheduled offences, hitherto in Part B of the Schedule, have now been
included in Part A of Schedule w.e.f 15.02.2013. Consequently, there is no monetary
threshold to initiate investigations under PMLA”17.
System of Appellate Tribunals
The re-appraising councils shaped under the arrangements of the PMLA to tons of the
extraordinary courts, are will undoubtedly pursue the procedural necessities of the
Code of Civil Procedure.
Methodology of allure to the Appellate Tribunals
Area 26 of the PMLA sets out the methodology relating to the documenting of offers
to re-appraising courts. The arrangements in that explicitly license an 'individual
distressed by a request made by the Adjudicating Authority under this Act, may
incline toward an intrigue to the Appellate Tribunal'.
17
“Though the period under Section 5 of PMLA 02 has been increased from 90 to 150 the legislature has
not changed it for retention of property and records under sections 17 and 18 of the Act. 27.Section 101 of
the Indian Evidence Act, 1872 .28See Section 24 of PMLA” 02.
29 | P a g e
Further, it is stipulated that interests all things considered are to be documented inside
a time of forty-five days from the date on which a duplicate of the request made by
the Adjudicating Authority or Director is gotten and it will be in such structure and be
joined by such charge as might be endorsed. This is additionally subject to the
arrangement that the Appellate Tribunal may subsequent to giving a chance of being
heard engage an intrigue after the expiry of the said time of forty-five days on the off
chance that it is fulfilled that there was adequate reason for not recording it inside that
period. When an intrigue is gotten by the Appellate Authority, the specialist may give
a chance of being heard to each concerned gathering and in this way pass such
requests consequently as it supposes fit, affirming, altering or putting aside the
request bid against.
Portrayal
A litigant documenting an intrigue before an investigative council may speak to his case
face to face or take the help of an approved delegate. The pertinent arrangement in such
manner happen under segment 39 of the PMLA.
Real ACTS COVERED IN THE SCHEDULE
•Indian Penal Code, 1860;
•NDPS Act, 1985;
•Unlawful Activities (Prevention) Act, 1967;
•Prevention of Corruption Act, 1988;
•Customs Act, 1962;
•SEBI Act, 1992;
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•Copyright Act, 1957;
•Trade Marks Act, 1999;
•Information Technology Act, 2000;
•Explosive Substances Act, 1908;
•Wild Life (Protection) Act, 1972;
•Passport Act, 1967;
2.2 ANTI-MONEY LAUNDERING REGULATORS IN INDIA
The FIU-IND is additionally in charge of organizing and reinforcing endeavors of

national and universal insight, examination, and implementation organizations in seeking
after the worldwide endeavors against tax evasion and related wrongdoings. “FIU-IND is
an autonomous body detailing specifically to the Economic Intelligence Council (EIC)
headed by the Finance Minister".
 Collection of Information: “Act as the central reception point for receiving Cash
Transaction reports (CTRs), Cross Border Wire Transfer Reports (CBWTRs), Reports on
Purchase or Sale of Immovable Property (IPRs) and Suspicious Transaction Reports
(STRs) from various reporting entities”.
 Analysis of Information: “Analysis of received information in order to uncover patterns

of transactions suggesting suspicion of money laundering and related crimes”.
 Sharing of Information: “Sharing of information with national intelligence/law

enforcement agencies, national regulatory authorities, and foreign Financial Intelligence
Units”.
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 Coordination: “Coordination and strengthening the collection and sharing of financial

intelligence through an effective national, regional, and global network to combat money
laundering and related crimes”.
2.3 Securities and Exchange Board of India (SEBI)
“The Preamble of the Securities and Exchange Board of India Act, 1992 describes the
basic functions of the Securities and Exchange Board of India as to protect the interests
of investors in securities and to promote the development of, and to regulate the securities
market and for matters connected therewith or incidental thereto18”
Functions of SEBI
“In accordance with the provisions of section 11 of the SEBI Act, the SEBI 34is entrusted
with the following functions:
 To protect the interests of investors in securities and to promote the development of, and
to regulate the securities market, by such measures as it thinks fit;
 The SEBI may also take measures pertaining to:
 Regulating the business in stock exchanges and any other securities markets;
 Registering and regulating the working of stock brokers, sub-brokers, share transfer
agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant
bankers, underwriters, portfolio managers, investment advisers and such other
intermediaries who may be associated with securities markets in any manner;
 Registering and regulating the working of the depositories, participants, custodians of
securities, foreign institutional investors, credit rating agencies and such other
intermediaries as the Board may, by notification, specify in this behalf”.
18
Harding, Andrew; Hatchard, John (1993). Preventive Detention and Security Law: A Comparative
Survey. MartinusNijhoffPublishers.pp. 61–. ISBN 0-7923-2432-3.,"Economic laws primer".Retrieved 30
March 2012.
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3. INTERNATIONAL PERSPECTIVE
"Because illegal tax avoidance is a worldwide marvel, transnational collaboration is of

fundamental importance in the fight against this risk. Various activities have been
undertaken on a universal scale to address this issue. The United Nations Convention
against Money Laundering is one of the major global understandings.In addition, the
Basle Committee on Banking Regulation Supervisory Practices, the European Union and
the International Organization of Securities Commissions have been responsible for the
work of budgetary establishments in anticipating and distinguishing tax evasion.
THE VIENNA CONVENTION: “It was the first major initiative in the prevention of
money laundering held in December 1988. This convention laid down the groundwork
for efforts to combat money laundering by obliging the member states to criminalize the
laundering of money from drug trafficking. It promotes international cooperation in
investigations and makes extradition between member states applicable to money
laundering. The convention also establishes the principle that domestic bank secrecy
provisions should not interfere with international criminal investigations”.
II.E. “Council of Europe Convention on Laundering, Search, Seizure”
Amid the second 50% of the twentieth century, with the expanding danger of current and
refined types of transnational guiltiness, concern has emerged over the absence of
successful national laws to battle sorted out wrongdoing and the washing of its returns.
India has had separate laws to manage sneaking, opiates, remote exchange infringement,
outside trade controls and so forth, and furthermore extraordinary legitimate
arrangements for preventive confinement and relinquishment of property and so forth,
which were authorized over some stretch of time to manage such genuine wrongdoings.
Be that as it may, the arrangements under one of the Indian laws, in particular, the
Foreign Exchange Regulation Act, 1973 (FERA) were viewed as 'draconian' and it was
33 | P a g e
revoked making remote trade infringement common offenses under another law called
the Foreign trade Management Act (FEMA)19
The term ' money laundering ' has been used in Lexicon's Black Law to portray
investment or additional money transfer as of racketeering, drug dealings and other
unlawful source into genuine channels so as not to trace its source.The Money
Laundering Lexicon of the Lectric Law Library defined it as „Conduct/ acts designed in
whole or in part to conceal or disguise the nature, location, source, ownership or control
of money (currency or equivalents e.g. cheques, electronic transfers etc.) to avoid
transaction reporting requirement under State or Federal Law or to disguise the fact that
money was acquired by illegal means.”
“Money laundering is also intertwined with transnational organized crimes and it has
been observed that over 80 percent of all money laundering schemes had an international
dimension. The United Kingdom report concluded that money laundering is the tenth
largest global economic activity.20 It has become twenty four hour business around the
world, when one part of the globe closes, the other become functional. The latest
technological means, professional assistance, the ingenuity of its operations and vast
resources at their disposal have added to nefarious designs. Money laundering has
different facets from local to international levels with varied facets in terms of quantum
of funds and activities, where first stage is source of generation of illicit money. Such
money generation process at local level covers corrupt practices for earning money, while
international acts are largely related to drug trafficking, business transactions of goods
and services, purchase of weapons, modernization process in developing countries and
incentives in foreign imports and exports, where countries provide incentives to
exporters”.
19
Worldwide Narcotics Control Strategy Report dated February 29, 2008, accessible at
20
Criminal Law. Encyclopædia Britannica Eleventh Edition.
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“This law came into effect from 1st July 2005. As per the provisions of the Act, every
banking company, financial institution and intermediary shall have to maintain a record
of the transactions, the nature and the value which has been prescribed in the rules under
the Act. The required information needs to be submitted to Financial Intelligence unit
(FIU) under the Ministry of Finance, which manages the data and deciphers it into
intelligence to be used by various agencies. The PMLA was enforced in 2005 with
certain amendments and has been further amended through the Prevention of Money
Laundering (Amendment) Act, 2009”.
“The amendment brought under the purview of PMLA21 more financial institutions and
incorporates provisions to combat financial of terrorism, it further expanded the schedule
of PMLA by including new categories of offences which have cross border implications.
Investigating powers have been further expanded with respect to attachment and seizure
of property at the preliminary stage. Even after 2009 amendments there remained gap
between international standard money laundering combating mechanism and the
measures adopted in PMLA”.
“Various international agencies have passed a series of conventions for abiding by all the
member countries. Each country, as a signatory of world bodies are required to enact
legislations covering all agreed issues, but the real problem remains in enforcement
measures and minimizing money laundering practices to every possible extent.1 Money
laundering is a global phenomena, where money grown through illicit activities is
transferred in various activities to hide its source of generation and posing to be generated
through legitimate sources. The illicit money generation is possible through various
means, where corrupt practices are main issue for its generation and individuals and
groups engaged in such tasks avoid tax payment and on the success of their efforts to
remain safe in such efforts, the process of investment is envisaged to show as generated
through fair means. Hiding the source of illicit money generation is issue of curiosity,
where various modes are prevalent to succeed in such acts”.
21
See Section 62 of PMLA 02. Though this amounts to safeguarding the general public from vexatious
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“Both instruments within the scope of the money-laundering offense by stating that it
should not only apply to the proceeds of illicit drug trafficking, but should also cover the
proceeds of all serious crimes. Both Conventions urge States to create a comprehensive
domestic supervisory and regulatory regime for banks and non-bank financial
institutions, including natural and legal persons, as well as any entities particularly
susceptible to being involved in a moneylaundering scheme. The Conventions also call
for the establishment of Financial Intelligence Units (FIUs).The International Convention
for the Suppression of the Financing of Terrorism came into force in April 2002. In the
same resolution, the Council also established the Counter-Terrorism Committee (CTC) to
monitor the implementation of the resolution”.
With banking institutions ' vulnerability in terms of exposure to money laundering,

satisfactory risk assessment of money laundering is vital. In banking institutions,
frontline officers dealing with customers for banking activities such as account opening,
savings, withdrawal and remittance are the defense frontline responsible for carrying out
money laundering risk assessment. A series of interviews with compliance officers
overseeing the assessment of the risk of money laundering and a central banker
overseeing the anti - money laundering regulation are analyzed in order to understand
how frontline officers perform their duties in assessing the risk of money laundering in
Malaysian banks.
Both instruments within the scope of the money-laundering offense by stating that it
should not only apply to the proceeds of illicit drug trafficking, but should also cover
the proceeds of all serious crimes. Both Conventions urge States to create a
comprehensive domestic supervisory and regulatory regime for banks and non-bank
financial institutions, including natural and legal persons, as well as any entities
particularly susceptible to being involved in a moneylaundering scheme. The
Conventions also call for the establishment of Financial Intelligence Units (FIUs).The
International Convention for the Suppression of the Financing of Terrorism came into
force in April 2002. In the same resolution, the Council also established the Counter-
Terrorism Committee (CTC) to monitor the implementation of the resolution.
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With the vulnerability of banking institutions in terms of exposure to money

laundering, satisfactory money laundering22 risk assessment is vital. In banking
institutions, the frontline officers who are dealing with customers for banking
activities such as opening an account, savings, withdrawal and remittance are the
frontline of defense responsible to undertake money laundering50 risk assessment. A
series of interviews conducted with compliance officers who supervise the assessment
of money laundering risk and a central banker who supervise the regulation on anti-
money laundering are analyzed in order to understand how frontline officers
discharge their duties in assessing money laundering risk in Malaysian banking
institutions.
has been filed by the person authorized to investigate. Where the authority is not
empowered such he has to take the person within 25 hours to theGazetted officer
superior to him or the Magistrate for search.
"Banking institutions are primarily the first-level contact point with money launderers by
looking at the money laundering modus operandi. Because of several factors, including
multiple services provided by financial institutions, including deposits, loans and foreign
exchange, banking institutions are the money launderer's most frequently used
instruments (Idowu&Obasan, 2012). Criminals consciously or unconsciously move
illegal money through the transfer of accounts or fund remittance with the help of
banking institutions and the source of illegally obtained money will be covered up or
hidden (Wit, 2007). Thus, banking institutions have become the focus of anti-money
laundering efforts in many countries, including Malaysia.
The latest 2014 KPMG Global Anti-Money Laundering Survey recognizes that money
laundering remains significant and poses increasing risks particularly to the financial
sector (KPMG, 2014). These facts show that money laundering is a real problem for the
financial sector and its risk is not to be underestimated. Because banking institutions are
the most vulnerable at the forefront of the money laundering ring, they should be
22
See Section 18 of the PMLA 02.
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equipped with adequate infrastructure to screen the risk of money laundering. Banking
institutions should develop criteria that can identify deviant transactions, in other words '
suspicious transactions' in connection with money laundering
“Because risk management can subsume its own objectives of deriving commercial
advantages within the banking institutions, constant monitoring by the regulatory
authority can reduce the conflict of maintaining good risk management by optimizing
shareholder returns (Favarel-Garrigues et al., 2007). BNM is the main regulatory body
responsible for overseeing banking institutions operations in Malaysia and one of the
areas covered is money laundering risk management. Bank officers are required to work
diligently and be aware that they are supervised by the authorities (Favarel-Garrigues et
al., 2007). Failure to do so could result in substandard risk assessment and “the banking
institutions may penalize the staff on negligence basis”. Nevertheless, at times, BNM is
facing difficulty in charging money laundering cases in court as “most money laundering
cases are not straightforward. For instance, there are cases that took more than two years
of collecting evidence, yet the prosecution team is still contemplating on the robustness
of the cases”.
Money launderers 23are criminals, they know when and how to circumvent the law and
the regulators should be ahead of them and learn their twisted mind. It is not an easy task
to build a solid case against money launderers, but due to the intertwined linkages.
3.4 “Money Laundering in United Kingdom is based on The Proceeds of Crime Act
2002 (POCA) is an Act of the Parliament of the United Kingdom which provides for the
23
Deferred Prosecution Agreements (a handful of which have been reached and publicly
announced)Criminal Finances Act 2017;52Money Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017;53the creation of the Office for Professional Body Anti-
money Laundering Supervision, a new body to oversee the supervision of professional bodies’ compliance
with those regulations; andthe creation of a new body to coordinate the UK authorities’ response to
economic crime, the National Economic Crime Centre.
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confiscation or civil recovery of the proceeds from crime and contains the
principal money laundering legislation in the UK.The Act has been amended since 2002,
most particularly by the Serious Organised Crime and Police Act 2005, the Serious Crime
Act 2007 and the Serious Crime Act 2015”
Illegal tax avoidance is broadly characterized in the UK. In actuality any taking care of or
contribution with any returns of any wrongdoing (or monies or resources speaking to the
returns of wrongdoing) can be a tax evasion offense. A guilty party's ownership of the
returns of his own wrongdoing falls inside the UK meaning of cash laundering54. The
definition likewise covers exercises which would fall inside the conventional meaning of
tax evasion as a procedure by which continues of wrongdoing are hidden or camouflaged
with the goal that they might be made to give off an impression of being of genuine
cause.
In contrast to certain different wards (prominently the USA and quite a bit of Europe),
UK tax evasion offenses are not constrained to the returns of genuine violations, nor are
there any financial breaking points, nor is there any need for there to be a tax evasion
plan or reason to an activity for it to add up to an illegal tax avoidance offense. A tax
evasion offense under UK legislation24 need not include cash, since the illegal tax
avoidance enactment covers resources of any portrayal. Actually in this manner a person
who takes even a paper cut in the UK submits an illegal tax avoidance offense
(ownership of the stolen paper cut) notwithstanding the predicate offense (of robbery of
the paper cut)25.
“There are more than 200,000 reports of suspected money laundering submitted annually
to the authorities in the UK (there were 240,582 reports in the year ended 30 September
24
In 2012, HSBC Holdings, a London-based company, paid nearly $2 billion in fines after it was discovered
that the financial institution laundered money for drug traffickers, terrorists, and other organized crime
groups throughout Iran. The laundering went on for many years before the activity was detected.
In 2014, BNP Paribas, a French bank with global headquarters in London, pled guilty to falsifying
25
business records after it was discovered the institution violated U.S. sanctions against Cuba, Sudan.
39 | P a g e
2010 - an increase from the 228,834 reports submitted in the previous year.Most of these
reports are submitted by banks and similar financial institutions (there were 186,897
reports from the banking sector in the year ended 30 September 2010”.
“Although 5,108 different organisations submitted suspicious activity reports to SOCA in

the year ended 30 September 2010 just four organisations submitted approximately half
of all reports, and the top 20 reporting organisations accounted for three-quarters of all
reports”.
4. IDENTIFYING RISKS, STRATEGIC POLICIES AND PRIORITIES
A comprehensive understanding of the jurisdiction’s ML58risks sets the foundation

for an effective AML regime. Properly identifying the risks and common ML
methods also assists investigators and prosecutors in detecting and ultimately proving
criminal activities. The workshops for judges and prosecutors highlighted the good
practice of involving investigators and prosecutors in the risk assessment process.
These actors can provide information that feeds into the countries’ overall
understanding of risk by participating in the process.
In addition to helping authorities identify criminal59 threats, a good understanding of
ML and TF risks contributes to the setting of national strategies and priorities for
combatting ML and TF. Knowing the level and type of risks in the country helps to
allocate resources for agencies charged with investigation and prosecution, including
resources that can be used to hire personnel, train them, and build specialised
capacity. In the case of TF, the jurisdiction should integrate counterterrorism and
CFT strategies, to the extent possible.26
The strategies should clearly articulate why criminal prosecutions and asset
confiscation are desirable outcomes. They should also be used to incentivize
investigations, prosecutions60, and confiscation of assets. For example, many
26
58DBOD.AML.BC.18/14.01.001/2002-03, dated August 16, 2002,
40 | P a g e
jurisdictions have set up asset forfeiture funds which can be used to fight crime,
benefit society, or compensate the victims of crime. If appropriately used, these
mechanisms can provide useful incentives for action. Strategies can also inform the
budgetary process and ensure adequate resources for the law enforcement authorities
(LEAs), including prosecutorial authorities and asset confiscation units. Finally, the
involvement of the criminal justice sector in the risk assessment or even strategy-
making process can promote legislative change, as those who work with the law most
closely are in a good position to identify loopholes or areas forpotential changes and
updates.
4.1 MONEY LAUNDERING

INVESTIGATION , PROSECUTION AND CONVICTIONS
Legislative basis
To adequately examine and arraign tax evasion, nations must begin with
properlycriminalising the offence61. FATF suggestion 3 (R.3) sets out the particular
components required tocomply with the commitment to condemn illegal tax
avoidance dependent on the Vienna and the Palermoconventions 27. Moreover, R.3
contains different components which go past the different commitments in the
universal traditions. Specialists from a few locales featured difficulties they face in
using their residential ML offenses. A few members revealed that their national
enactment still contains a necessity to demonstrate the predicate offense past sensible
uncertainty so as to most likely convict for ML. Different members from nations
without an "all violations" way to deal with predicate offenses communicated a
craving for more straightforward enactment that unmistakably characterized the
wrongdoings which can be the reason for tax evasion charges63. Additionally,
members flagged that it could be tricky when enactment does not characterize
27
tp://www.metimes.com/Security/2008/06/11/analysis_india_to_check_money_laundering/289560
http://www.sebi.gov.in/cmorder/ubsorder.pdf
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legitimately the degree of emotional information that is adequate to demonstrate the

offense, taking into account that an indistinct standard of verification can make
Difficulties in connection the guideline of assumption of blamelessness and how the
litigant can utilize that further bolstering his good fortune. At last, it was referenced
that in a few nations, the criminalization64of self-washing is beyond the realm of
imagination because of established issues and that confines the ability to research and
indict those sorts of cases. It ought to be noted however that in all FATF aluations
where purviews have contended that condemning self-washing is in opposition to key
standards of household law, this has been rejected by the Plenary.
The evidentiary thresholdsunder other enactment might be simpler to meetor the

examiners might be progressively well-known withprosecuting predicate offenses and
have not beensufficiently prepared on the advantage or importanceof seeking after
ML charges. Sometimes28, it mightbe less demanding to convict on the predicate
offense, asthe investigator has effectively aggregated enoughevidence to continue
with predicate charges buthas not completely built up the budgetary evidenceneeded
to bring ML charges. There are manyjustifications for the quest for predicate
offensesat the rejection of ML identified with convenience.Prosecuting ML
notwithstanding a predicate offenceis regularly asset escalated and time-consuming.In
a few nations, the laws did not legitimately boost ML charges on the grounds that the
sentencewould be basically the equivalent if the defendantwere arraigned for the
predicate offense.
While there are contrasts in legitimate traditionsand the manner in which enactment is
drafted in jurisdictions, some great practices identified with condemning MLcan be
recognized: It was suggested amid the workshopsto grow the extent of predicate
offences to the more extensive rundown of genuine offenses or toadopt an all-
28
“See Section 18 of the PMLA 02. No such search or seizure can be made unless a report under Section
173 of Cr.P.C. has been made to the magistrate or a complaint has been filed by the person authorized to
investigate. Where the authority is not empowered such he has to take the person within 25 hours to the
Gazetted officer superior to him or the Magistrate for search”.
42 | P a g e
wrongdoings approach, which mayprovide clearness and greater adaptability to

theprosecutors, particularly when combinedwith a framework that additionally fuses
theprinciple of chance. It ought to be notedthat Recommendation 3 does
requirecoverage of every genuine wrongdoing as predicate offenses, to incorporate, at
a lowest amount, those recorded in the Glossary to the FATFRecommendations (for
example a scope of crimeswithin29 unique classifications). It was additionally
expressed as a decent practice toelaborate the meaning of subjectiveknowledge, either
in the law establishingthe ML offense or through case law.FATF President's
Paper:Anti-tax evasion and counter fear monger financingfor judges and examiners.
“Practitioners felt it was better to work on the mensrea element with a lower threshold, so
that they would only have to prove that the defendant was suspicious of the possible
illegal origin of the funds. Also considered useful was the ability to demonstrate "willful
blindness or that the defendant should have known that the funds or assets were derived
criminally. Several practitioners agreed that it would be helpful to establish, whether by
law or precedent, that it is not necessary to prove that the predicate offense is in order to
convict for ML as set out in the recommendations of the FATF. Some practitioners noted
that their domestic laws had removed the duty to prove that money laundering came from
a criminal act”.
“The Court agreed that, as long as the defendant has the opportunity to defend himself
against the ML charges, the practice respects the principles of innocence and fair trail. A
good practice that has proven to be useful in some jurisdictions is plea bargaining, or the
process of settling a criminal case with an in exchange defendant pleading guilty to some
crime as well as cooperating. This can often result in the defendant admitting guilt to
lesser or lesser offenses than those alleged in the in dictment. Thus, the defendant may be
sentenced to more than would otherwise have been possible”.
Burden and standard of proof

29
See Section 19 of PMLA 02
43 | P a g e
“The issue of the burden of proof was discussed during the workshops as a potential
challenging area for the prosecution of the ML offence. Experts felt it was smarter to
work with a lower threshold on the mensrea element, to such an extent that they would
just need to demonstrate that the litigant had a belief or doubt of the conceivable unlawful
origin of the assets. The capacity to indicate will full blindness or that the litigant should
have realized that the assets or resources were criminally determined, was additionally
considered valuable. A few professionals concurred that it was helpful to set up,
regardless of whether through legislation or case point of reference, that the predicate
offense need not be demonstrated in order to convict for ML, as established in the FATF
Recommendations. Some practitioners noticed that their household laws69have
evacuated the commitment to demonstrate that money laundered originates from a
criminal act altogether”.
A few members referenced that it is adequate for the examiner to demonstratethat the
respondent has unexplainedwealth, which at that point puts the weight onthe litigant to
give an objectivelyreasonable clarification to why he has ordealt with assets under
scrutiny. Thiswas introduced by the Dutch appointment 30as the predictable methodology
they take forML cases; being this one of what they callthe "6 stages approach."generated
them, or, at the end of the day, a crimecommitted on a specific day, by a
certainperson.The European Court of Human Rights in a recentdecisionfound that
switching the weight ofproof after a by all appearances appearing in linewith the
customary law. The Court agreedthat the training is aware of the principlesof honesty and
of reasonable trail, as long as thedefendant has the likelihood protect against
theMLcharges.A great practice which has demonstrated valuable in somejurisdictions is
supplication bartering, or the processof settling a criminal case with a respondent
inexchange for him conceding to some crimein expansion to giving co-task. Regularly,
thiscan result in the litigant conceding blame to lessserious or less offenses than those
30
It is otherwise called Letters Rogatory. Area 77 of Civil Procedure Code 1908 – Letter
of Request.
44 | P a g e
claimed inthe prosecution. In this manner, the litigant may get alower sentence than
would have been otherwisepossible.
Powers and techniques
Giving the structure to the forces that law authorization and analytical specialists ought to
have. Specialists focused on the significance of skilled experts directing examinations of
ML, related predicate offenses, or TF ought to probably get to every single vital archive
and data for use in those examinations and indictments. The FATF Standards additionally
expects locales to most likely utilize a wide scope of other analytical strategies, some of
which involve increasingly concentrated skill, for example, covert activities, catching
correspondences, getting to PC frameworks, and leading controlled conveyances.
Members from specific areas expressed that the utilization of specific analytical strategies
was pretty much normal, however their utilization, for the most part, appeared to be on
the ascent. A few difficulties were referenced with respect to an absence of ability to
direct measurable examinations (for example of PC hard drives), getting to confirm held
by remote specialist organizations, or constrained specialized devices to capture
correspondences. A few experts referenced fruitful encounters in co-ordinating controlled
conveyances with universal accomplices. Different apparatuses and methods rose the
workshops talks as being compelling for combatting ML were: the ability to direct
electronic observation or area following, telephone geolocation and correspondence
patterns examination, and having the ability to do sound or video chronicles in open
spaces. Likewise referenced were a few new tech-related apparatuses, for example,
checking web use and assembling measurable data from the dim web (for example square
chain examination advances). At long last, it was flagged that having the capacity to
access and block online life correspondences and to screen other electronic talks and visit
rooms could possibly give imperative contributions to the examinations. Encoded
correspondence channels were esteemed hazardous by the members. It was noted amid
the workshops that agents ought to guarantee that the devices and procedures are not a
substitute for leading monetary examination, which can frequently be thought as hard to
direct, however which can be helped by innovation, for example, mechanized bank
45 | P a g e
record filtering frameworks or canny connection software. At last, as noted in the FATF's
2012 money related examinations guidance, continuous law authorization joint effort and
trade of data with FIUs should assume an imperative job in examinations. This can
prompt the FIU giving extra monetary insight to the analytical group, subsequently
adding to a more full image of the money related usual way of doing things of a sorted
out criminal gathering. In doing as such, care ought to be made to guarantee that any
move by the FIU does not unduly endanger or obstruct the criminal examination.
Capacity to take auspicious action31
It is vital that there is the legitimate probability and reasonable instrument set up to
stop/catch most or every single significant resource previously or in the meantime as
capture. In purviews where examinations can be led secretly, the seizures may be
coordinated to the minute when the examination ends up plain. Ideally, solidifying and
catching this can happen after resources have been followed and some measure of money
related examination did, however this may not generally be conceivable.
“It is agreed that the ability to act on an ex parte basis, without notice to the suspect, even
for just a short period, was helpful to ensure the efficacy of provisional measures so that
the suspect did not have a chance to move or dissipate assets. Practitioners agreed that an
evidentiary requirement on the government to prove a risk of dissipation before it is
possible to obtain an order was burdensome. Such a requirement is often difficult to
prove in practice and would negatively impact the ability to freeze assets”32.
Third party possessions – “Frequently, the criminals that commit the predicate offences
will seek to launder the proceeds and place the proceeds in the hands of third parties
31
See Chapter IX of the PMLA 02 generally for this section.
32
See Section 60(7) PML Bill 08 –“ When any property in India is confiscated as a result of execution of a
request from a contracting State in accordance with the provisions of this Act, the Central Government may
either return such property to the requesting State or compensate that State by disposal of such property on
46 | P a g e
(family, associates, or legal persons or arrangements) that were not directly involved in
the crimes. Prosecutors need to be able to trace and have the power to freeze such
property, including in cases where equivalent value confiscation that will be sought
because the proceeds are unavailable or have been spent”.
(a) “directly tracing the criminal proceeds through any transactions/ transfers into the
property that is to be restrained”;
(b) “producing evidence to show that the third party received a gift of property from the
defendant or was not a bona fide purchaser of the asset”;
(c) “showing that the defendant has effective control of the property even if it is held in
the name of a nominee. Of course, the rights of bona fide third parties should be
appropriately protected”.
Extent and character of the interim order –Whichever authority is competent to issue
preliminary orders should ensure that property will be preserved and available to satisfy
any confiscation order that is subsequently made. “Practitioners agreed that the scope of
the order should be broad, and, if possible, include income derived from property that can
be confiscated and equivalent value or substitute assets. The nature of proceedings giving
rise to the order will vary. Depending on the legal system, they could be in rem or in
personam, orders could be made against specific assets or all assets of a defendant, and
they may have extraterritorial reach”. “According to the FATF Standards, courts or other
authorities should be able to issue provisional measures covering assets located abroad,
but of course mutual legal assistance would be required to give effect to the order in the
foreign country. Practically, property could be: (a) restrained in place (e.g. a financial
institution may be ordered to simply freeze accounts) (b) subjected to conditions (e.g. a
prohibition on the sale of real property may be ordered which does not evict occupants
before conviction), or (c) seized and taken under the control of a law enforcement, the
court, or other authorised body, if there is a concern that the nature of the property might
lead to it being dissipated or hidden regardless of the court order, such as with cash,
personal property, vessels, vehicles, or other movable assets”.
47 | P a g e
FIU power to freeze – “A number of FIUs have the power to hold (freeze) assets that
are involved in suspicious transactions temporarily. Another similar mechanism is a no
consent order in which the FIU refuses to consent to the processing of a suspicious
transaction by a reporting entity. Such administrative holdings can be useful in
preventing money from being transferred abroad in a timely manner, for example in cases
of fraud, where recovery can be difficult. Freezes may only be available for certain types
of transactions / assets and are temporary — some of them lasting a matter of hours or
days — but they give the prosecution enough time to gather evidence78 to seek stronger
court orders”.
5 CONCLUSION AND SUGGESTIONS
CONCLUSION
“Money laundering is sleight of hand a magical deception for wealth formation the
lifeblood of drug dealers, fraudsters, smugglers, arms dealers, terrorists, extortionists and
tax-evaders. It is also the world’s third largest business. Though a relatively new and in
vogue subject, it has in fact been around for centuries. Criminals throughout history had
to conceal the source of newly acquired wealth in order to run away prosecution for the
48 | P a g e
predicate crime. However, the magnitude of the problem has escalated out of all
proportion”.
"Today’s criminals make the Capone crowd and the old Mafia look like small time
crooks".
“Money laundering33 is one of the ongoing problems facing the international economy,
and from the evidence studied while researching this work, it can be seen that while the
fundamentals of this crime remains largely the same, technology has offered, and will
continue to offer a more sophisticated and circuitous means to convert ill-gotten proceeds
into legal tender and assets”. "Armageddon scenario of banking on the `Net - criminals
could have money transferred without any audit trail".
Experts concurred that an evidentiary prerequisite on the administration to demonstrate a
danger of scattering before it is conceivable to acquire a request was difficult. Such a
prerequisite is regularly hard to demonstrate by and by and would contrarily affect the
capacity to solidify resources.
Regarding down to earth systems, move can be made all the more quickly if investigators
are associated with the case at a beginning period and either have proper forces or can
relate quickly for a court request. It is likewise useful for courts to have methodology
allowing crisis or dire applications.
Proof and weight of confirmation – the evidentiary prerequisites and weight of

verification ought not be unduly burdensome at the solidifying/catching phase of
procedures. Specialists were OK with measures, for example, sensible grounds to
speculate the respondent has resources gotten from wrongdoing or reasonable
33
“FATF-GAFI, Financial Action Task Force on Money Laundering. “Basic Facts about Money
Laundering”,see .www.oecd.org/fatf”
49 | P a g e
justification to trust that there is property that would be liable to appropriation in case of a
conviction.
Outsider property – Frequently, the crooks that carry out the predicate offenses will try to
wash the returns and spot the returns in the hands of outsiders (family, partners, or
legitimate people or plans) that were not specifically engaged with the wrongdoings.
Examiners should almost certainly follow and have the ability to stop such property,
incorporating into situations where comparable esteem seizure that will be looked for in
light of the fact that the returns are inaccessible or have been spent. Nations 50 FATF
President's Paper: Anti-illegal tax avoidance and counter fear monger financing for
judges and examiners 51 utilize distinctive lawful powers in such manner, and three
components that were refered to were:
(a) directly following the criminal continues through any exchanges/moves into the
property that will be controlled;
(b) delivering proof to demonstrate that the outsider got an endowment of property
from the litigant or was not a genuine buyer of the benefit;
(c) showing that the litigant has powerful control of the property regardless of
whether it is held for the sake of a chosen one. Obviously, the privileges of true blue
outsiders ought to be suitably secured. ¬
Degree and nature of the temporary request – Whichever specialist is skillful to issue
fundamental requests ought to guarantee that property will be protected and accessible to
fulfill any reallocation request that is along these lines made. Specialists concurred that
the extent of the request ought to be expansive, and, if conceivable, incorporate pay got
from property that can be appropriated and comparable esteem or substitute resources.
The idea of procedures offering ascend to the request will fluctuate. Obviously shared
lawful help would be required to offer impact to the request in the outside nation. For all
intents and purposes, property could be: (a) limited set up (for example a budgetary
50 | P a g e
establishment might be requested to just stop accounts) (b) exposed to conditions (for
example a denial on the clearance of genuine property might be requested which does not
oust inhabitants before conviction), or (c) seized and taken under the control of a law
requirement, the court, or other approved body, if there is a worry that the idea of the
property may prompt it being scattered or concealed paying little mind to the court
request, for example, with money, individual property, vessels, vehicles, or other portable
resources.
RECOMMENDATIONS:
“Based on the detailed research I have carried out I now make the following
recommendations; In an electronic world in which the banking system operates through
linked computers 24 hours a day, there must be increased global emphasis upon thorough
vetting of personal, company and financial institution accounts at the bank of origin.
51 | P a g e
There is no substitute for a systematically applied know-your customer policy, especially

as applied to those placing currency into the system and converting it to an account
susceptible to immediate transfer outside the jurisdiction. Considerable attention also
must be focused by anti-money laundering authorities on establishing international
standards, obtaining agreements to exchange information, establishing linkages for
cooperative investigations, and overcoming political resistance in various key countries
to ensure such cooperation”.
1. Ratification together with fulfillment consisting of global belligerent payment

mopping principles
The “development of international standards to reduce jurisdictions' vulnerability to
money laundering and to give a boost to budgeting, regulatory and law enforcement of
anti-money laundering regimes has been at the forefront of the fight against this crime”.
“Accordingly, it is critical that these standards, which continue to be refined and
strengthened, be adopted on a global basis. Today, these standards include, among others:
the FATF 40 Recommendations, the Aruba 19 Recommendations (CFATF), the OAS
Model Regulations on Money Laundering, the Summit of the Americas December 1995
Buenos Aires Communiqué Plan of Action, “the European Directive on Money
Laundering, and the Basle Principles”.34
2. Analysis of Money Management Practices:

“We need improved information from more countries on what factors influence drug
traffickers and their money managers to use particular systems in specific countries, to
keep reserves in cash and other monetary instruments, to invest rather than park funds.
Interviews of arrested drug money managers are producing detailed profiles of money
34
Interpol General Secretariat Assembly in 1995 http://www.interpol.int/Crime-areas/Financial-
crime/Moneylaundering
52 | P a g e
management schemes. The best data so far applies to the cocaine trade 91but we need to
develop the same level of knowledge about heroin and marijuana syndicates”.
3. Tightening Restrictions in contact with Non-Drug Related capital mopping as

well as diverse budgetingcrimes35:
“We need to identify the parallels between drug money laundering on the one hand, and
non-drug related money laundering (capital mopping) and other economic crimes on the
other, and achieve an effective international capability to investigate and prosecute all
these crimes. While a number of governments are willing to impose new restrictions on
drug-related economic crimes, many hesitate to apply such strictures to other non-sedate
money laundering and other forms of fiscal crime”.
4. Casting off Standardized Weaknesses:
“Banks need to keep similar records on their clients of their fiscal institution as they do
for other clients and report suspicious transactions involving such clients. Some available
but underused tracking mechanisms include license revocation, ownership and
management changes, lifting and prosecution. Perhaps the most inherent shortcoming is
the absence of qualified faculty in government administrative organizations, but also in
many maintaining monetary frameworks”, which are prepared not only for the execution
and supervision of such supervisory frameworks, but also to take care of the complex
fiscal exchanges that currently exist. The improved preparation detailed in the ongoing
global process gatherings is empowering, yet more is important.
5. Growing the worldwide utilization of the shared assessment process:
35
“Transaction Reporting edited by Brent Fisse, David Fraser and Graeme Coss. North Ryde, NSW: Law
Book Co.Pp 257-293”. (1992)
53 | P a g e
The CFATF has an on-going common assessment procedure to help its individuals'
enemy of illegal tax avoidance routines, and the Council of Europe is additionally
starting to execute such a procedure for locales in the Newly Independent States of
the previous Soviet Union (NIS) and in Central and Eastern Europe. These 305 Page
imperative territorial activities should proceed apace and can fill in as prime
precedents in spreading illegal tax avoidance countermeasures to different areas, for
example, Asia, Africa and the Middle East.
6. Combined supervision of the worldwide financial framework:
The Basle Principles: The Basle Committee on Banking Supervision discharged its
Core Principles for Effective Banking Supervision in September 1997. This archive
builds up 25 Core Principles to fill in as a reason for supervision in all nations. They
are thorough in their inclusion, tending to the preconditions for compelling financial
supervision, permitting and structure, prudential guidelines and necessities, strategies
for progressing banking supervision, data prerequisites, formal forces of bosses and
cross-outskirt banking. Rule 15 requires financial chiefs to discover that the banks
they administer have satisfactory strategies, practices and techniques set up, including
strict "know your client" decides that advance high moral and expert principles in the
monetary segment and keep the banks from being utilized, deliberately or
accidentally, by criminal elements. Supervisory experts all through the world will be
urged to underwrite the Principles by no later than October 1998. The Principles have
been intended to be obvious by bosses, provincial supervisory gatherings, and the
market on the loose. The Basle Committee93 will assume a job, together with other
intrigued associations, in observing advancement made by individual nations in
executing the Principles.
7. Receiving Information Standards:
54 | P a g e
The appointment by organizations of information rules, for instance, those

recommended by FATF and the Society for Worldwide Interbank Financial
Telecommunication (SWIFT) mastermind is a welcome, if not yet comprehensive,
advance. Much more governments need to take an interest in grasping rules to help
check the maltreatment of electronic trade and portion frameworks to wash unlawful
resource.36
BIBLIOGRAPHY:-
Primary sources
 PREVENTION OF MONEY LAUNDERING ACT 2002
36
Michael Levi, Money Laundering and Its Regulation, Annals of the American Academy of Political and
Social Science, Vol. 582, Cross-National Drug Policy (Jul., 2002), pp. 181-194.
55 | P a g e
 The Income Tax Act, 1961

 The Conservation of Foreign Exchange and Prevention of Smuggling Activities
Act, 1974 (COFEPOSA)
 The Smugglers and Foreign Exchange Manipulators Act, 1976 (SAFEMA)
 The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPSA)
 The Benami Transactions (Prohibition) Act, 1988
 The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances
Act,1988
 The Foreign Exchange Management Act, 2000, (FEMA)
BOOKS
 Pieth, Mark and Eymann, Stephanie, "Combating the Financing of Terrorism: Is It

Working?",Verlag Peter Lang, May 2009.
 Berti, Benedetta, "The Economics of Counterterrorism: Devising a Normative Regulatory

Framework for the Hawala System", MIT International Review, Spring 2008, pp. 14-21.
 Demetis, Dionysios S and Angell, Ian O, "The risk based approach to AML:
representation, paradox, and the 3rd directive", Journal of Money Laundering Control,
Vol. 10, No. 4, 2007, pp. 412-428.
 Gordon, Philip H, "Can the War on Terror Be Won? How to Fight the Right War",
Foreign Affairs, November/December 2007, pp. 53-66.
 Thony, Jean-François and Png, Cheong-Ann, "FATF Special Recommendations and the
UN Resolutions on the financing of terrorism - A review of the status of implementation
and legal challenges faced by countries", Journal of Financial Crime, Vol. 14, No. 2,
2007, pp. 150-169.
 De Koker, Louis, "Money laundering control and suppression of financing of terrorism
-Some thoughts on the impact of customer due diligence measures on financial
exclusion", Journal of Financial Crime, Vol. 13, No. 1, 2006, pp. 26-50.
56 | P a g e
 Broome, John, Anti-Money Laundering - International Practise and Policies, Thomson,

Sweet & Maxwell Asia, 2005.
 Cassella, Stefan D, "Terrorism and the Financial Sector: Are the Right Prosecutorial
Tools Being Used?", Journal of Money Laundering Control, Vol. 7, No. 3, 2004, pp. 281-
285.
57 | P a g e

Rishabh Tiwari Dissertation

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“University of Petroleum and Energy Studies, Dehradun”, 2019

MONEY LAUNDERING: CRITICAL PERSPECTIVES OF

AUTHOR: ADITI KUKREJA

Roll No.- 138

Course: B.A., L.L.B. (Hons.) with Specialization in Criminal Laws

Submitted under the guidance of: Asst.Prof. MEHREEN

This dissertation is submitted in partial fulfillment of the

UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

Signature & Name of Supervisor

Signature & Name of Student

2.2. ANTI MONEY REGULATORS IN INDIA

4.1 INVESTIGATION, PROCECUTION AND CONVICTION

AML Anti-Money Laundering

ARIN American Registry for Internet Numbers

CARIN Camden Asset Recovery Inter-Agency Network

CFT Countering the Financing of Terrorism

LEA Law Enforcement Authority

MLA Mutual Legal Assistance

OSCE Organization for Security and Co-operation Europe

UNODC United Nations Office on Drugs and Crime

PAREENA SWARUP vs. UNION OF INDIA

UNION OF INDIA vs. HASAN ALI KHAN & OTHERS

ANOSH EKKA vs. CENTRAL BUREAU OF INVESTIGATION

“HARI NARAYAN RAI vs. THE UNION OF INDIA”

ARUN KUMAR MISHRA vs. DIRECTORATE OF ENFORCEMENT

“SHIV KANT TRIPATHI vs. STATE OF U.P”

I would also like to thank Mr.Prakhar Gangulyfor their kind support.

According to Robinson, “Money laundering is called what it is because that perfectly

Medication traffickers3are in genuine need of good washing frameworks since they

Article 1 of EC Directive defines Fund Laundering as “The conversion of property,

The illegal drug trade or drug trafficking is a global black market dedicated to the cultivation,

As indicated by Robinson, "Money laundering is called what it is on the grounds that it

Falsehood can be highly profitable2. Money made by unlawful activities in a generous

judgment implementation or unmitigated appropriation. The culprits in this endeavor to

seem to have legitimateorigins.7 The target of condemning tax evasion is to remove

1.1 “Money Laundering is a procedure of three phases”–Positioning stage, layering

1.2 LAUNDERING MECHANISMS

1.3 THE INDIAN PERSPECTIVE

2. Against Money Laundering Laws in India

The progressive governments in India, since autonomy, monitoring the ground

The Conservation of Foreign Exchange and Prevention of Smuggling Activities

“One detectable component in regard of this bit of enactment is the finished

2.1 The Prevention of Money Laundering Act, 2002

•To forestall and control tax evasion

As washing has the significance doled out to it in Section 3. Segment 3

endeavors to enjoy or intentionally helps or purposely is a party or is really engaged

Key concept in the PMLA

The PMLA, it might be repeated, is the most comprehensive bit of enactment

The period installment framework has characterized as a framework that empowers

Assigned Business or Profession

•A Registrar or Sub-Registrar named under Section 6 of the Registration Act, 1908,

•Real bequest specialist, as might be informed by the Central Government.

•Person continuing such different exercises as the Central Government may, by

Method under the PMLA

•Endow data relating to such records;

•Substantiation of character of its customers via doing due determination systems;

•Identification of helpful proprietor, in regard of the exchanges embraced with its

Sorts of Penalties under the PMLA

Forces of connection of spoiled property Appropriate experts, delegated by the Govt

The Authorities – PMLA

•Director or Additional Director or Joint Director,

•Assistant Director, and

•such extra executives/officers whose arrangement might be regarded important under