The Act, aimed at combating siphoning of money into illegal activities, provides for attachment and seizure of property and records, besides stringent punishment, including rigorous imprisonment up to 10 years and fine up to Rs five lakh, an official release said in New Delhi.
The Act, in line with India's commitment to fight all forms of economic crimes, first came into being in 2002 but could not be brought into force due to certain lacunae. It was accordingly amended in Parliament's last session to remove the shortcomings.
As per the provisions of the Act, every banking company, financial institution and intermediaries need to maintain a record of all transactions, the nature and value of which is being prescribed in the rules.
FIs, including chit funds, cooperative banks, housing finance companies and non-banking financial entities, and intermediaries like stock-brokers, sub-brokers, share transfer agents, bankers and registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and others have to be registered with SEBI.
Transactions include all cash those of over Rs 10 lakh or its foreign currency equivalent, all series of cash transactions integrally connected to each other which have been valued below Rs 10 lakh or its equivalent in foreign currency where such transactions have taken place within one calendar month, and all suspicious transactions, whether or not made in cash.
The financial intelligence unit has been set up as a multi-disciplinary unit for establishing links between suspicious or unusual financial transactions and underlying criminal activities.
For better coordination and information sharing, FIU-IND would coordinate and support efforts of national and global intelligence, investigation and enforcement agencies in pursuing efforts against money laundering and related crimes.
It would be the central nodal agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions to these agencies who would protect it against misuse.
Through its research and analysis function, FIU-IND would monitor and identify strategic key areas on money laundering trends, methods and developments.
For the purpose of money-laundering, the Act identified certain offences under the Indian Penal Code, Narcotics Drug and Psychotropic Substances Act, Arms Act, Wild Life (Protection) Act, Immoral Traffic (Prevention) Act and Prevention of Corruption Act, the proceeds of which would be covered under the Act.
The release said to combat the menace of these offences of money laundering, the government is entrusting the work relating to investigation, attachment of property/proceeds of crime relating to the scheduled offences under Act, and filing of complaints to the directorate of enforcement, which now deals with offences under Foreign Exchange Management Act.
