Commentary on The Prevention of Money-Laundering Act

The process of converting ill gotten money/proceeds of crime from illegal activities/scheduled offences and projecting it as untainted property is the essence of the offence of money laundering. This process is recognised to be accomplished by the offenders in three stages known as placement, layering and integration. Therefore, the money laundering is not an independent crime. This offence depends upon other crimes internationally known as predicate offences and under The Prevention of Money Laundering Act, 2002 given as scheduled offences. Therefore, in India the tainted money ought to have been generated from one or more of the scheduled offences given in the schedules appended to the Act to attract the offence of money laundering as defined in section 3.As the money laundering activities are often done by terrorists and drug traffickers and have cross-border implications, great efforts have been made/are being made by important international bodies to prevent it. The United Nations has by way of global programme of action adopted by its general assembly in the 17th Special Session on 23rd of February, 1990 taken important steps in this direction. Financial Action Task Force (FATF) of which India is also one of the members is also making great international endeavors to combat money laundering by making appropriate recommendations. In addition The Basel Committee on Banking Supervision (BCBS), Wolfsburg Group of Banks, Offshore Group of Banking Supervisors (OGBS), International Association of Insurance Supervisors (IAIS), International Organisation of Securities Commissions (IOSCO), Joint forum of BCBS, IAIS and IOSCO are making anti-money Laundering efforts at the international level.