Money Laundering (ppt)

ByAkash Jindal

Money laundering can be described as the process by which a person conceals or disguises the identity or the origin of illegally obtained proceeds so that they appear to have originated from legitimate sources.

The financing of terrorism can be described as the process by which a person tries to collect or provide funds with the intention that they should be used to carry out a terrorist act by a terrorist or a terrorist organization

exploit economic and financial globalization

have serious social consequences provide drug traffickers grow organized criminal groups grow arms dealers and other criminals strike at the integrity of a country's

financial institutions. It distorts the operation of markets

transactions

PlacementFlight CapitalLayeringTax HeavensIntegration

PlacementGetting Currency into the financial system so as to convert illicit funds from cash straight into a financial instrument or bank account

LayeringThe movement of funds from institution to institution to hide the source and ownership of the funds, obscure the audit trail and sever the link with the original crimeIntegratio

nThe reinvestment of those funds in an ostensibly legitimate business so that no suspicion of its origins remains and to give the appearance of legitimizing the proceeds

• Smurfing

• Shipping Money Abroad

• Placement through Banks

• Use of “Pass Through” or “Payable Through” Accounts

• Electronic Wire Transfers

• Insurance Products

• Investment Related Transactions

• NBFCs

• Tax Havens & Offshore Banks

• Bank Secrecy Law as a layering tool

• Corporations & Shell Companies as a layering tool

• Use of trusts

• Use of walking accounts

• Establishing self owned bank

• Use of intermediaries

• Use of haven bank credit cards

• Receiving as consulting or directors fee

• Arrangement of corporate loans

• Proceeds of gambling

• Real estate transactions

• Stock Purchase

• Use of business

• International importing and exporting

Placement Layering Integration

Acceptance of flight capital by western countries

Laws and limitations of other countries

Jurisdictional conflicts and lack of international coordination

Tax heavens as sanctuaries

Offshore corporations

Having to prove fraudulent transfer

Bankings’ role in facilitation of the activity

Bank Secrecy

Volume and complexity of international transfers of funds

Internet based banking

Shortfall of reporting requirements

Criminals influencing Government and Bank support

The widespread use and acceptance of trade mis-pricing

Bulk e-mail

Vending Machines

Multi Level Marketing

Franchises

Inventions / Patents

Vanity Press Publishing

Bank Fraud

Cheque Fraud

Fake Ads & Directories

Business Loans

Counterfeiting

Fraudulent Orders

Internet Services

Cramming

Supply Scams

A money launder's objective in laundering ill is to : Get it out; cover it up; bring it back

Contribution by different continents in ML(IMF report data, year 2008)

Contribution by financial sector in ML (IMF report data, year 2008)

'money transfer without money movement‘

was developed in India

Also known as chop, chit , flying money and underground bank

• Inspector Raj

• Dual Responsibility

• Undue Delay in Processes

• Excessive intervention by Judiciary

• Very less time in law making

• Considering of problem rather than cause of the problem

• More interest before investigation but no interest in concluding the cases

• Understand the need for creation / modification of laws to curb / eliminate opportunities for scams / frauds based on the study of global scenario

• Ensure appropriate powers to law enforcement agencies

• Provide facility for 2/3 levels of appeal before any one approach the judiciary

• Ensure time bound completion for the cases / designating case officer

• Announce very severe punishment for committing the crime

• Introduction of Compulsory Operations Audit on a periodical basis

Utilize services of professionals such as

Chartered Accountants, Advocates &

Company Secretaries for conducting pre-

enquiries with regard to various indicators

available from news media

Be independent from every business not only

on paper but otherwise