ECONOMIC BUSINESS AND PREVENTION OF MONEY LAUNDERING CS EXECUTIVE

COMMERICAL LAWS NEW SYALLBUS

ACT, 2002
CS EXECUTIVE
Process of Money Laundering
NEW SYALLBUS
.

Scams
Money
Laundering Smuggling
Drug
trafficking

Conversion of Black Money into white SOURCES

❖ Initial entry of dirty cash ❖ Launderer engage is a ❖ Final stage in which
money. or proceeds of crime into series of conversion to launderer may choose
Insider
Criminal activity generates substantial Terrorism
trading financial system. distance them from to invest the fund
profits and route the fund to safe ❖ Stage Places money into their source into real estate,
heavens Sex legitimate financial ❖ Purpose of this stage luxury asset or
Rackets system. is to separate the business ventures
❖ Launderer introduce his illegal money from its
initial profits to financial source
Objective of the Act:- system by breaking large
amount of cash into
➢Prevent money laundering
smaller amount and then
➢Confiscate the property derived from or depositing directly into
involved in money laundering
bank or by purchasing a
➢Punish the people involved in the money series of monetary
laundering instruments

➢ Person who -
o Knowingly entered into
transaction related to proceeds
of crime
Person In oAcquire or own or possess or
Default transfer the proceeds of crime
oConceal proceeds of crime
Punishment of Money Laundering
• Property derived or obtain
Proceeds of crime related to narcotic drugs
Proceeds directly or indirectly
Minimum 3years and maximum 10years and fine
• As a result of criminal
of Crime activities (schedule offence) Confiscate the proceeds of crime
• Or value of any such property
Any other case
Imprisonment for minimum 3years and maximum
7years and fine Confiscate the proceeds of crime

PREVENTION OF MONEY 1|Page

LAUNDERING ACT, 2002 UNIQUE ACADEMY FOR COMMERCE CS SHUBHAM ABAD
ECONOMIC BUSINESS AND PREVENTION OF MONEY LAUNDERING CS EXECUTIVE
COMMERICAL LAWS NEW SYALLBUS
ACT, 2002
CS EXECUTIVE
Applies to bank or FI or Maintain the data of all the
NEW SYALLBUS
intermediaries clients
Maintain records of all Report doubtful transaction to
transactions it’s nature and director
value
Obligation of banking
companies or FI and
Intermediary
Record shall preserve for a
period of 10years
Punishment minimum-10,000 but
Furnish records of all
may extend to 1,00,000
transactions it’s nature, value to
director within specified time

Summon, Search and Seizure

➢ Any officer who has sufficient reasons to
believe that an offence is committed has
power:
a) To enter any place within the limit of area
assigned

Obligations of Bank
b) To Place identification marks on the Bank shall pay Special attention to any
records inspected by him money laundering threats that may arise

Debit Cards/ Smart Cards/

technologies: Credit cards/
c) Search that convicted person or seize from new or developing technologies
including internet bankin
such record or property which is relevant

Introduction of new
for any proceeding
Information of customer shall be kept confidential Ensure full compliance with KYC or AMC
➢ Retention of property for a period not exceeding

180days from its actually seized
➢ After expiry of 180days the property shall be
returned to the person unless authority permits
retention beyond the said period
Gift Cards
or CFT (combating the financing of
Ensure remittance of fund for value of Rs5000 terrorism) guidelines issued
and above is to be affected debit to customer
account or by cheque
Marketing of credit card is generally
Amendment in FCRA is to be ensured by bank done through services of agents

Bank shall pay attention to all complex, unusual

large transactions and all unusual patterns of Agent should also be subjected to KYC
transactions. Measures

PREVENTION OF MONEY 2|Page

LAUNDERING ACT, 2002 UNIQUE ACADEMY FOR COMMERCE CS SHUBHAM ABAD
ECONOMIC BUSINESS AND PREVENTION OF MONEY LAUNDERING CS EXECUTIVE
COMMERICAL LAWS NEW SYALLBUS
ACT, 2002
CS EXECUTIVE
NEW SYALLBUS
Adjudicating Authority
Central Government can appoint one or more
persons not below the rank of Joint Secretary to ❖ Special court
the Government of India as adjudicating
authority ➢ Central Government to designate in consultation
Reporting to financial intelligence with the chief justice of the High court
Adjudicating authority on receipt of complaint
unit- India
from director serve a show cause notice of not ➢ One or more Courts of Session as special court
Bank is required to report information less than 30days
➢ Every offence punishable under the act is
relating to cash and suspicious transaction Within 30days such person shall disclose the
and all transaction involving receipts by source of income, earning or assets by means of Cognizable
NGO of value more than Rs10,00,000 or which he has acquired the property attached ➢ Person accused for a term exceeding 3years shall
its equivalent in foreign currency to not be released on bail
director or financial intelligence unit
➢ Special court shall not take cognizance of any
India
offence except made by director or any officer
Combat money of Central Government
laundering and
laundering

Implement
Establish a series
of recommendation Objectives measures to
Establishment of FATF (Financial Action
and ensure they counter the use
remain up to date of FATF of financial Task Force)
system
➢Development and promotion of policies to prevent
Appellant Tribunal money laundering and terrorism financing
➢Inter- governmental body and was established with aim
➢Establish by Central Government by notification in to develop and promote of the policies in relation to
Promote the
official gazette Monitor, review the
adoption and money laundering
money laundering
➢To hear appeals against the order of adjudicating financing implementation of
officer and other authority techniques appropriate
➢Appeal within 45days
measures globally
❖ Vienna Convention in 1988
➢Extension→on sufficient grounds First convention of United Nations
United Nations Global Programme against Money
➢Appellant tribunal→confirm member’s
Laundering
• →Modify
Offence of drug control and crime prevention implement Member were agreed to promote international
• →Or set aside the order
this programme against money laundering co-operation to combat money laundering
➢Appeal shall Disposed within 6 months of filing appeal
Technical co-operation is the main task of this programme.
Encompasses activities of creating awareness, institution
building and training
Research and analysis to enable the international community
to devise more efficient and effective counter-measure
strategies

PREVENTION OF MONEY 3|Page

LAUNDERING ACT, 2002 UNIQUE ACADEMY FOR COMMERCE CS SHUBHAM ABAD