Money Laundering

Topics: Money laundering, Offshore bank, Bank Pages: 11 (6118 words) Published: October 28, 2014

SATYAWATI COLLEGE (M)
MONEY LAUNDERING
A PROJECT SUBMITTED IN PARTIAL FULFILMENT
OF THE REQUIREMENT FOR DEGREE OF B.COM (H)
UNIVERSITY OF DELHI
PAPER – CH6.3 (B)
BY
AYUSH GUTGUTIA
ROLL NO. 3196
OPTION: LITERATURE REVIEW
2013-14
UNDER THE SUPERVISION OF
DR. RADHE SHYAM
DECLARATION
This is to certify that the material embodied in this study entitled “Money Laundering” is based on my own research work and my indebtedness to other work/publications has been acknowledged at the relevant places. This study has not been submitted elsewhere either wholly or in part for award of any degree. AYUSH GUTGUTIA

This is to certify that the project titled “Money Laundering” done by “AYUSH GUTGUTIA” is a part of his/her academic curriculum for the degree of B.Com(H). It has no commercial implication and is done only for academic purpose. Ms. Sonia PrakashDR. Radhe ShyamTeacher in-charge (mentor) Dept. of Commerce

Acknowledgement
I owe a great many thanks to great many people who helped and supported me during the course of this project research. I take this opportunity to express my gratitude and regards to my mentor Dr. Radhe Shyam for her exemplary guidance, monitoring and constant encouragement throughout the course of this project research. He has taken pain to go through the project and make necessary corrections as and when needed. I would also thank my institution and faculty members without whom this project would have been a distant reality. I am grateful for their cooperation during the period of my assignment. Lastly, I thank almighty, my parents and friends for their constant encouragement without which this assignment would not be possible.

CONTENTS
CHAPTER NO.TITLEPAGE NO.1Introduction 5
1.1 Definition 5
1.2 Transfer of money 5
1.3 Washing of dirty money 5
2Process of Money Laundering 6
3Methods or Techniques of Money Laundering 9
4Harmful Effects of Money Laundering 13
5Prevention of Money Laundering Act, 2002 15
6Role of Reserve Bank of India 16
7Role of Securities Exchange Board of India 17
8Conclusion and Suggestions 18
9Notable Cases 20
References and Webliography 22

CHAPTER 1
INTRODUCTION
The term money laundering is generally believed to have originated from mafia ownership of Laundromats in the United States. Gangsters in the US had been earning huge sums in cash through extortion, prostitution, gambling, bootlegging liquor, etc. One way to legitimize the source of this money was to purchase outwardly legitimate businesses and to mix their illegitimate earnings with these. These gangsters chose Laundromats because they were cash businesses. 'Money laundering' as an expression is one of fairly recent origin.

1.1 Definition
The Prevention of Money Laundering Act (PMLA) 2002 defines the offence of Money Laundering as follows: “Engaging directly or indirectly in a transaction that involves property that is proceeds of crime (or) derived from proceeds of crime (or) knowingly receiving, possessing, concealing, disguising, transpiring, converting, disposing off within the territories of India, removing from or bringing into the territory of India the property that is proceeds of crime.”1.2 Transfer of Money Transfer to a safe 'haven' of funds raised through any unlawful means (‘tainted’ money) like smuggling, trafficking in drugs, women or children, gun-running, avoidance of legitimate tax, diversion of funds from a legitimate destination and use at another destination, etc., is called 'money laundering'. These funds may include those transferred to support terrorist activities. 1.3 Washing ‘Dirty’ Money

The word 'money laundering' is, however, apt since it describes perfectly, what happens. Illegal or 'dirty' money is put through a cycle of transactions so that it comes out 'washed' at the other end, as ‘legal’ or ‘clean’ money. The source gets obscured, externally, through a...

References: CHAPTER 5
PREVENTION OF MONEY LAUNDERING ACT, 2002
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