Prevention of Money Laundering Act, 2012-A rescue or failure to the existing probe

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Prevention of Money Laundering Act, 2012-A rescue or failure to the existing probe

Written By:– Aayushi Singh


Money Laundering: Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions. The overall process makes the money clean to the launderer in an obscure and indirect way. Money laundering is the illegal process of making large amounts of money generated by 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.1 Most financial companies have anti-money-laundering (AML) policies in place to detect and prevent this activity. Money laundering is the illegal process of making dirty money appear legitimate instead of ill-gotten. Criminals use a wide variety of money laundering techniques to make illegally obtained funds appear clean. Online banking and cryptocurrencies have made it easier for criminals to transfer and withdraw money without detection.

How Money Laundering Works:

Money laundering is essential for criminal organizations that wish to use illegally obtained money effectively. Dealing with large amounts of illegal cash is inefficient and dangerous. Criminals need a way to deposit the money in legitimate financial institutions, yet they can only do so if it appears to come from legitimate sources.

There are mainly three steps to make Money Laundering:

  1. Placement
  2. Layering
  3. Integration / Extraction

Placement: They add some white money in it or exchange the money with the amount.

Layering: Layering is the use of placement and extraction over and over again to make transactions as hard as possible.

Integration/Extraction: This is the final step of money laundering getting money out of it used without attracting attention from law enforcement.

Anti-Money Laundering Act:

The Anti-Money Laundering Act of 2001 (AMLA) is the primary AML/CFT law in the Philippines. The AMLA investigates money laundering and other financial crimes to protect the financial institution and determine its functions.

Prevention of Money Laundering in India:

The process of the Prevention of money laundering Act,2002 PMLA is to combat money laundering in India to prevent to control money laundering and financial crimes in India and to deal with the issue regarding money laundering in India.

Prevention of Money Laundering Act,2012:

The PMLA Act,2012 it’s an Amending Act has enlarged the definition of Money Laundering by including activities such as concealment, acquisition, possession, and use of proceeds of crimes as a criminal offence.

The PMLA (Amendment) Act, 2012 has enlarged the definition of money laundering by including activities such as concealment, acquisition, possession, and use of proceeds of crime as criminal activities. … “Criminal intent is the main ingredient of any offence. The PMLA was enacted in 2002 but was amended thrice, first in 2005, then in 2009, and then in 2012. The 2012 version of the amendment received the president’s assent on January 3, 2013, and the law became operational from February 15, when the finance ministry notified it. The government argues that it had to amend the existing law once more as India became a member of the Financial Action Task Force (FATF) in October 2010. Headquartered in Paris, the FATF is an inter-government.

The PMLA was enacted in 2002 and it came into force in 2005. The chief objective of this legislation is to fight the money laundering that is, the process of converting black money into white. To know more about black money and money laundering. The Act enables government authorities to confiscate property and/or assets earned from illegal sources and through money laundering. The PLMA has been amended three times, that is, in 2009, 2009 and 2012.

Under the PMLA, the burden of proof lies with the accused, who has to prove that the suspect property or assets have not been obtained through proceeds of crime.

PMLA Objectives: The basic objectives of the PMLA are:

  • Preventing money laundering.
  • Combating the channelising of money into illegal activities and economic crimes.
  • Providing for the confiscation of property derived from or involved in money laundering.
  • Providing for any other matters connected with or incidental to the act of money laundering.


Their main aim is to prevent money from laundering. There is a serval amendment act made for this various action takes against the person found to be guilty of Money laundering. Money Laundering is a punishable offence with a minimum of 3years of imprisonment and a maximum of 7 years of imprisonment, a fine. PMLA is made for taking control against money laundering crimes. As we all know that having black money is a very big offence and it minimizes the government’s job. It prevents to make country work, due to the heavy black money marketing government not able to do their work properly as people are not paying proper taxes. It leads to increase prices and poor people suffer a lot. So, PMLA comes into force to prevent money laundering and control over financial crimes.

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