Definition
Money laundering refers to showing illegally earned money as money earned legally.
The launderer: - The person who misappropriates money is called launderer.
There are three steps involved in the process of money laundering.
1:- Placement
2:- Layering
3:- Integration
Placement: -
In the first phase, the money will come to the market. In this, launderer illegally earned money is deposited in cash in financial institutions such as banks or other types of formal or informal financial institutions.
Layering: -
Second step in money laundering Layring related to hiding money. In this, the launderer would hide his real income by tampering with the account books and doing other suspicious transactions. The laundere would deposit the money through investment instruments such as bond stock and travellers' check or in his bank accounts abroad. This Accounts are often opened in countries that do not cooperate with anti-money laundering campaigns.
Integration: -
The final stage of the money laundering process. Through this process the money sent out or invested in the country comes back to the laundereras legal money. Such money often comes back through investments in a company, buying real estate, buying luxury, goods, etc.
Methods of Money laundering
There can be many ways of money laundering, the most important of which is to create a fake company, which is called a shell company.
SHELL COMPANY: - Shell companies would have been a company like a real company. But in reality there is no property involved in it, nor is there any actual production work.
Shell companies exist only on paper. Not in the real world. The launderer shows the big transactions in the balance sheet of these companies. Takes loan in the name of the company. Takes tax exemption from the government. Does not file income tax return.Through all these fraudulent deeds he would have accumulated a lot of black money.
Other methods of money laundering
Buying a big house, shop or mall. But showing its value on paper is low while the actual market value of the property purchased is much higher.
This is done so as to pay less tax. In this way, black money was also raised through tax evasion.
In other ways, money laundering occurs when the launderer deposits his money through various means in banks in countries where the government of another country does not have the authority to check his account.
Money laundering Prevention Act
Money Laundering Act in India was enacted
in 2002. It has been amended three times.
2005 2009 and 2012.
The last amendment of 2012 got President's assent on 3 February 2012.
The Prevention of Money Laundering Act (Amendment) Act 2012 included concealment of money, acquisition, possession and use of money for criminal purposes, etc. in the list of criminals.
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