The Prevention of Money Laundering Act, 2002

The Prevention of Money Laundering Act, 2002
• The Act states that an offence of money laundering has been committed if a person is a
party to any process connected with the proceeds of crime and projects such proceeds as
untainted property. “Proceeds of crime” means any property obtained by a person as a
result of criminal activity related to certain offences listed in the schedule to the Act. A
person can be charged with the offence of money laundering only if he has been charged
with committing a scheduled offence.
• The penalty for committing the offence of money laundering is rigorous imprisonment
for three to seven years and a fine of upto Rs 5 lakh. If a person is convicted of an
offence under the Narcotics Drugs and Psychotropic Substances Act, 1985 the term of
imprisonment can extend upto 10 years.
• The Adjudicating Authority, appointed by the central government, shall decide whether
any of the property attached or seized is involved in money laundering. An Appellate
Tribunal shall hear appeals against the orders of the Adjudicating Authority and any other
authority under the Act.
• Every banking company, financial institution and intermediary shall maintain a record of
all transactions of a specified nature and value, and verify and maintain records of all its
customers, and furnish such information to the specified authorities.