CHAPTER 16

Question 1

Money laundering

Answer 1

Money laundering is the process of converting dirty money (earned through illegal activities) into clean money that appears legitimate

Question 2

Criminals

Answer 2

it includes, terrorist organizations , use money laundering with assistance from accountants , lawyers and financial institutions to disguise their illegal funds

Question 3

Financial institutions

Answer 3

Financial institutions means a person who is involved in the following activities
*Accepting, deposit and lending
*Leasing
*Insurance
*Money or value transfer
*Financial guarantee and commitments
*Business trading
*Issuing & managing payment methods
e.g debit / credit card , Electronic money , money orders, cheque bank draft, traveller’s cheque

Question 4

Role of financial institutions

Answer 4

To monitor customers’ transactions
To report large transactions

Question 5

When is a person guilty of offence of money laundering

Answer 5

If he knows that a property is proceeds of crime and still:
1. Acquire, converts, possess, use or transfer such property.
2. Conceals the true nature, origin, location, ownership, movement of such property.
3. Holds or possess such property on behalf of any other person.
4. Aids, or counsels to commit above acts

Question 6

Evidence of offence of money laundering

Answer 6

Knowledge inferred from factual circumstances.
Conviction in Predicate Offence is not required

Question 7

Punishment for individual

Answer 7

For Individuals: (i.e. natural person)
Imprisonment –> 1 to 10 Years
Fine up to Rs. 25 million.
Forfeiture of property

Question 8

Punishment for legal person i.e company

Answer 8

Fine upto Rs. 100 million.
Individual liability for director,
officer or employees involved