Presented by :

M.Dhinesh Kumar
D.Jayakumar
G.Joginder
What is Money Laundering ?
According to Prevention of Money Laundering Act,2002
Whosoever directly or indirectly attempts to indulge or
knowingly assists or knowingly is a party or is actually
involved in any process or activity connected with the
proceeds of crime and projecting it as untainted property
shall be guilty of offence of money-laundering.

Money Laundering General Meaning
Money laundering generally refers to washing of, or converting the
proceeds or illegal profits generated from:
(i) Drug trafficking
(ii) Computer fraud Schemes
(iii) Prostitution Rings
(iv) Insider Trading
(v) People smuggling
(vi) Arms, antique, gold smuggling
(vii) Prostitution rings
(viii) Financial frauds
(ix) Terrorism Activities
(x) Bribery, Corruption, or
(xi) Illegal sale of wild life products and other specified predicate offences,
etc , into Legitimate Money .
Stages in Money Laundering
Placement
Initial introduction of criminal proceeds into the stream of
commerce
Layering
Involves distancing the money from its criminal source
through movements of money into different accounts and
to different countries
Integration
The proceeds enter a legitimate business and the financial
economy as untainted property

Money Laundering & India
$ 500 billion (Rs 22.5 lakh crore) has been spirited out of
India since independence

Indias underground economy is estimated at $640 billions
which is estimated to about 50% of its GDP in 2008

There are at least 40 destinations that aggressively solicit
such funds but most popular is Swiss Bank

72.2% ($462 billion) of Illicit assets are held overseas,
remaining 27.8% ($178 billion) are held domestically


Financing of terrorism
Money to fund terrorist activities moves through the
global financial system via wire transfers and in and out of
personal and business accounts. It can sit in the accounts
of illegitimate charities and be laundered through buying
and selling securities and other commodities, or
purchasing and cashing out insurance policies.

Although terrorist financing is a form of money
laundering, it doesnt work the way conventional money
laundering works. The money frequently starts out clean
i.e. as a charitable donation before moving to terrorist
accounts. It is highly time sensitive requiring quick
response.

Macroeconomic impact
Money laundering can have a range of severe
macroeconomic consequences on countries.

IMF has cited unpredictable changes in money
demand, prudential risks to the soundness of banking
systems, contamination of legal financial transactions,
and increased volatility of international capital flows
and exchange rates due to unanticipated cross-border
asset transfers.
Macroeconomic impact
The economic and political influence of criminal
organizations can weaken the social fabric; collective
ethical standards and ultimately the democratic
institutions of the society. Organized crime can
infiltrate financial institutions, acquire control of large
sectors of the economy through investment, or other
bribes to public officials and indeed governments
Money Laundering can also have a dampening effect
on FDI if a countrys financial sectors are perceived to
be under control and influence of organized crime.

FATF (Financial Action Task Force)
Intergovernmental Organization founded in 1989
Purpose is to develop policies to combat Money
Laundering and Terrorism Financing
36 member nations including India.
15 countries are in FATF Blacklist as on November 2013.
Few important countries are Iran, Pakistan, Kenya,
Myanmar, Indonesia, North Korea, Vietnam, Yemen,
Ethiopia, etc.


ANY QUESTIONS ????


Thank You