Hello friends welcome to Sonu live ,in this article I’m going to tell you about EXPLAIN On the basis of current data of government ABOUT MONEY LAUNDERING , ITS PROCESS, SMURFING, HAWALA, HOW TO PREVENT IT, FATF,AML, CFT, FATF,PMLA, MLTF
EXPLAIN ABOUT MONEY LAUNDERING
According to section III of prevention of Money Laundering Act 2002 any process or activity connected with the proceeds of crime including its concealment , possession, acquisition or use. And clamming or projecting it has untainted property shall be the guilty of offence of it.
In simple words money laundering is a process of clamming black money as white money or illegal assets as legal assets.
MONEY LAUNDERING PROCESS
The money laundering process typically involves three stages:
Placement:
It means depositing cash with banks and financial institutions to show as legal money. If small amounts of cash are depositing in different accounts and banks then the technique is called SMURFING. If large amount is sending abroad to a low tax country(TAX HAVEN) through illegal non banking channels then it is known as HAWALA.
Layering:
Money deposited in banks and financial institution is rotating in different accounts maintained by different companies created artificially for this purpose and called shell /ghost/fake. The purpose is to take money away from the origin. And to create evidence of business transitions the dues money in purchase ,sell, landing, borrowing etc.
Integration:
Finally money is bringing back to the origin in the form of white money shown as foreign investment, gift transfer loan, donation and so on. At this stage black money gets integrated with white money with proper records and hence separation becomes difficult. This step is also known as round tripping.
Smurfing is a type of money laundering where small amounts of cash are depositing into multiple bank accounts to avoid detection. This is a common technique using by drug traffickers and other criminals.
Hawala is an informal money transfer system that is often using to launder money. Hawala operators do not keep records of transactions, making it difficult for law enforcement to track the movement of funds.
How to Prevent Money Laundering
- Financial institutions: Banks and other financial institutions are requiring to report suspicious activity to the authorities. They can also use technology to identify and track suspicious transactions.
- Law enforcement: Law enforcement agencies can investigate money laundering and prosecute those who are involving.
- Regulation: Governments can pass laws and regulations that make it more difficult to launder money.
- Public awareness: Raising public awareness of it can help to deter people from participating in it.
FATF
The Financial Action Task Force (FATF) is an intergovernmental organization that sets international standards for combating money laundering and terrorist financing. The FATF has developed a set of 40 Recommendations that countries can implement to combat it and terrorist financing.
AML
Anti-money laundering (AML) is the process of preventing, detecting, and reporting money laundering activities. AML is a complex and ever-evolving field. But it is essential for protecting the financial system and society from the harmful effects of it.
CFT
Combatting the financing of terrorism (CFT) is the process of preventing and disrupting the funding of terrorist activities. CFT is closely linked to AML, as many of the same techniques that are used to launder money can also be used to finance terrorism.
PMLA
The Prevention of Money Laundering Act (PMLA) is a law that was enacting by the Indian government in 2002 to combat money laundering. The PMLA has been amended several times since it was first enacted. And it now includes a number of provisions that make it more difficult to launder money in India.
MLTF
The Multi-Lateral Framework (MLTF) is a framework that was developed by the FATF to help countries implement the FATF Recommendations. The MLTF provides a roadmap for countries to follow in developing and implementing their AML/CFT systems.
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