AML Full form is Anti-Money Laundering Anti-money laundering. According to laws, regulations, and procedures of the Government, criminals are obtaining funds illegally, which can not be counted as legitimate income.
Now anti-money laundering law has a limited range of transactions but needs its far-reaching because criminal behaviors are increasing.
To stop the money Laundering process Indian Government passed an act name was PML (Prevention of Money Laundering) in 2002.
The main moto of PMLA (Prevention of Money Laundering Act) prevents money laundering and this process in which transactions will be completed that transaction must be clean and anyone buy property by money laundering then this property must be sealed.
In 1989 FATF (Financial Action Task Force) was started to prevent Money Laundering, it’s the head office in Paris also now 36 countries are added to FATF.
In India have FIU-IND(Financial Intelligence Unit – India ) which working for Anti-Money Laundering. FIU-IND was established on 18th NOV 2004 by the Indian Government.
The Maine work of FIU-IND is to collect suspicious transaction report from the financial institution or bank and analysis these report and then publish in public.
Another function of FIU-IND is working on CTR (Cash Transaction Report) it means to collect a report of transactions above Ten Thousand in the bank and analyzing this report.
After analyzing this report then find out the main source of the transaction.
FIU-IND also working on suspicious Transactions. It means if a businessman has a monthly turnover of one lakhs but it suddenly increases to Ten Lakhs then in these c FIU-IND will take action and analyze this report.
What is Money Laundering?
Money laundering is the process of crime in which the true ownership of those proceeds are concealed or made opaque so that the process appears to come from a legitimate source.
The objective of money laundering is to conceal the existence, illegal source, or illegal application of income to make it appear legitimate.
In the money laundering process, criminal activity is count which proceeds suspicion of law which is generally called money laundering.
After the money has been laundered, it can be used for legitimate purposes.
Money Laundering has three processes to convert black money to white as Placement, Layering, and Integration.
Keeping large amounts of cash in the financial system can cast doubt on officials, so it can only be transferred in the placement phase.
Criminal income money can be diverted in a variety of ways, such as packing in a suitcase in cash and smuggling it into a country, or using a landlord smuggling to break the reporting limit rules and avoid suspicion.
Layering involves sending the money through various financial transactions to change its form and make it difficult to follow.
Layering may consist of several banks to bank transfers or wire transfers between different accounts in different names in different countries make deposits and withdrawals continually.
Integration involves the conversion of illegal proceeds into apparently legitimate business earnings through normal financial or commercial.