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Essentials of the Prevention of Money Laundering Act

FEMA consultantu00a0use the Essentials of the Prevention of Money Laundering Act (PMLA) to verify that financial transactions are legal, transparent, and free of illegal activity. It establishes rules to detect and prevent money laundering in international transactions.<br><br>For more info.: www.femaconsultant.com<br>Call us now: 011 47026276

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Essentials of the Prevention of Money Laundering Act

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  1. Essentials of the PREVENTION OF MONEY LAUNDERING ACT (PMLA)

  2. PURPOSE OF PMLA The Prevention of Money Laundering Act, 2002, was enacted to prevent the process of converting illegal money into legal assets. It aims to combat financial crimes by tracing and confiscating the proceeds of crime and deterring criminals from using the financial system to legitimize their income.

  3. WHAT IS MONEY LAUNDERING? Money laundering refers to the illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking, corruption, or fraud,appear to be earned legally. Under PMLA, this act is a criminal offense, and any direct or indirect attempt to disguise the true source of illegally obtained money is punishable.

  4. ROLE OF THE ENFORCEMENT DIRECTORATE (ED) The Enforcement Directorate is the main authority responsible for investigating offenses under PMLA. It has the power to summon individuals, search premises, arrest suspects, and attach or seize properties gained through money laundering. The ED plays a central role in enforcing the law and ensuring that offenders are brought to justice.

  5. OBLIGATIONS OF FINANCIAL INSTITUTIONS Banks, financial institutions, and intermediaries like stockbrokers are required to follow strict reporting norms. They must maintain records of all financial transactions and report suspicious or high-value dealings to the Financial Intelligence Unit – India (FIU-IND). This helps track illegal activities and detect money laundering at an early stage.

  6. PENALTIES & LEGAL CONSEQUENCES Violations of the PMLA can lead to serious legal action. The punishment for money laundering includes imprisonment for a term ranging from 3 to 7 years, which may extend to 10 years in specific offenses like drug-related crimes. In addition, any property derived from money laundering can be provisionally attached and later confiscated by the government.

  7. THANK YOU www.femaconsultant.com skyquestc@gmail.com 011 47026276

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