What is money laundering?

What is money laundering?

What is money laundering

You must have often heard the news of money laundering through television, newspapers or any other medium, but do you know what is money laundering? If you do not know, then read this post and know everything about money laundering.

What is Money laundering ?

Money laundering is the process of legalizing illegally earned black money by any means. Through money laundering, money earned through drugs, smuggling and many other criminal activities is invested in some such work so that the money can be used. The original source could not be traced, in simple language, money laundering is converting black money into white money.

In money laundering, the black money earned through illegal means turns white and finally returns to its rightful owner in the form of legal currency.

Who is called a launderer?

The person who makes illegal money legal is called a “launderer”, that is, the owner of that black money is called a “launderer”.

Process of Money Laundering

There are many methods of money laundering, most of these methods have three steps which are as follows.

  1. Placement
  2. Layering
  3. Integration

Placement

This is the first stage of money laundering. The launderer deposits the illegally earned black money in cash in banks or financial institutions. 

Layering

This is the second stage of money laundering. This stage is concerned with concealing black money, which is called layering. In this, the launderer disguises his real income by investing the money in investments, bonds, stocks, shell companies, foreign bank accounts, etc. Hides it. 

Integration

This is the last step in the money laundering process. Through this process, money invested in bonds, stocks, shell companies, foreign bank accounts, etc. often comes back to the launderer as legitimate money through investment in a company, buying real estate, buying luxury goods, etc. goes. 

Money laundering laws in India

Money laundering is an illegal act, for this every country has its own separate law. In India, the Prevention of Money-laundering Act, 2002 is applicable from 1 July 2005. And it was amended in 2009 and last in 2012.

The process of money laundering is as simple as it sounds to hear the word money laundering, we hope that through this post you must have come to know what is money laundering, if you have any question or suggestion, you Can comment.

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