Legal Effectiveness of Prevention of Moneylaundering Amendmentt Act, 2019

Abstract

Money Laundering is not a new phenomenon, but it has been prevalent for a long time. In any event, with tremendous advances in the invention, the process of laundering money has gotten more complex and perfected. Money laundering is a global societal problem, and it frequently has negative effects on a country's economy. India, along with various wards such as the United States of America ("USA"), the European Union ("EU"), and Australia, have recognized the hazards of money laundering and taken steps to combat it. Given the growing global concern about avoiding money laundering, it is critical to comprehend the definition and idea of money laundering.1 Every year, criminals earn enormous quantities of black money or 'dirty' money by engaging in numerous unlawful activities such as corruption, tax evasion, fraud, drug trafficking, women and child trafficking, extortion, and so on. Because there is a possibility that money obtained from such criminal acts would fall under the radar of law enforcement agencies, black money or illicit money is disguised as legitimate or clean money through a process known as "laundering." Money laundering is defined by the International Monetary Fund (IMF) as "a process by which the illicit source of assets obtained or generated by criminal activity is concealed in order to obscure the link between the funds and the original criminal activity" (IMF, 2015). In other words, the method assists in concealing the real origin of the money. By utilizing the laundering process, criminals may enjoy their unlawful funds "freely" without fear of punishment or forfeiture.2 Money laundering is divided into three stages: placement, layering, and integration. The illegal monies are pumped into the banking system or the retail sector at the placement stage.