The Prevention of Money Laundering Act, 2002 (PMLA) is India’s primary legislation aimed at preventing and controlling money laundering. The Act was enacted by the Indian Parliament in 2002 and came into force on July 1, 2005.
PMLA defines money laundering as the process of concealing the illicit origin of proceeds derived from criminal activity. Under Section 3, money laundering includes activities such as the concealment, possession, acquisition, or use of proceeds of crime, as well as projecting them as untainted property.
The Act places obligations on banking companies, financial institutions, and intermediaries to conduct proper client identification, maintain transaction records, and report specified information to the Financial Intelligence Unit – India (FIU-IND).
The Enforcement Directorate (ED) is the nodal agency responsible for investigating offenses and enforcing provisions under PMLA.
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