Answer By law4u team
Money laundering is the process of concealing the illegal origin of money or assets obtained from criminal activities so that they appear to come from legitimate sources. Under international law, money laundering is addressed through international treaties, conventions, and standards that require countries to criminalize money laundering, confiscate proceeds of crime, and cooperate in cross-border investigations. The process of money laundering generally involves three stages: Placement – Introducing illegally obtained money into the financial system. Layering – Conducting multiple transactions to hide the source of the money. Integration – Reintroducing the money into the economy as apparently legitimate funds or assets. Common predicate offences that generate laundered money include: Drug trafficking. Corruption and bribery. Terrorist financing. Fraud and cyber crime. Human trafficking. Tax-related offences (where recognized by domestic law). Organized crime. International efforts against money laundering focus on: Criminalizing money laundering. Identifying and confiscating proceeds of crime. Requiring financial institutions to conduct customer due diligence (Know Your Customer or KYC). Reporting suspicious financial transactions. Sharing information between countries. Extraditing offenders where permitted by law. Preventing the misuse of banks and financial systems. Several international instruments form the basis of global anti-money laundering efforts, including: The United Nations Convention against Transnational Organized Crime. The United Nations Convention against Corruption. The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The Financial Action Task Force (FATF) Recommendations, which serve as the principal international standards for combating money laundering and terrorist financing. In India, money laundering is primarily governed by the Prevention of Money Laundering Act, 2002 (PMLA). The Enforcement Directorate (ED) is the principal agency responsible for investigating offences under the PMLA, while other law enforcement agencies investigate the underlying predicate offences. Under the PMLA, a person may face prosecution if they are involved in concealing, possessing, acquiring, using, or projecting the proceeds of crime as untainted property. International cooperation is essential because money laundering often involves multiple countries, foreign bank accounts, shell companies, and cross-border financial transactions. Countries cooperate by exchanging information, tracing assets, freezing and confiscating criminal proceeds, and providing mutual legal assistance in accordance with applicable treaties and domestic laws.
