Money Laundering more Heinous than Murder: Supreme Court

 

Money Laundering: Relevance

• GS 3: Money-laundering and its prevention.

 

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Money Laundering: Context

• Recently, a petition was filed in the Supreme Court of India to challenge various provisions of Prevention of Money Laundering Act (PMLA) for allegedly being in violation of basic principles of natural justice.

 

PMLA 2005: Provisions challenged

• Coercive powers, including the power of arrest without a warrant on a mere subjective satisfaction of the concerned officer.
• The petitioners have also challenged the validity of section 45 of the Act for putting limitations for granting bail.

 

Money Laundering more Heinous than Murder: What the SC said?

• The Supreme Court was of the view that the offence of money laundering cannot be treated lightly as laundering is more heinous than murder.
• Supreme Court also said that money laundering damages the economy and the financial system of the country.
• Supreme Court observed that money laundering is not only used for drug trading but also for terrorist activities that affects sovereignty and integrity of India.

 

 

Prevention of Money Laundering Act, 2002

• Prevention of Money Laundering Act, 2002 was enacted to fight against the criminal offence of money laundering.
• The Prevention of Money Laundering Act, 2002 enables the Government to confiscate the property earned from the illegally gained proceeds.

 

PMLA objectives

• Prevent money-laundering.
• Combat/prevent channelising of money into illegal activities and economic crimes.
• Provide for the confiscation of property derived from, or involved/used in, money-laundering.
• Provide for matters connected and incidental to the acts of money laundering.

 

 

What is Money laundering?

• According to UN, “the conversion or transfer of property, knowing that such property is derived from any offense(s), for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in such offense(s) to evade the legal consequences of his actions”.
• So, Money laundering can be defined as the illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
• The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean.
• Money laundering is a serious financial crime that is employed by white collar and street-level criminals alike.

 

3 stages of Money Laundering

• Placement: moving the funds from direct association with the crime.
• Layering: disguising the trail to foil pursuit.
• Integration: making the money available to the criminal from what seem to be legitimate sources.

 

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