"MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIAconvicted person is also liable to pay fine up to Rs.5,00,000/-, but if the offence is provedunder the offences specified in para 2 of the schedule Part A offence then the imprisonmentshall be extended to maximum 10 years as per the provisions of the Narcotic Drugs and51 Psychotropic Act, 1985. The provisions of the act clearly state that there is no limitation onthe amount of fine or the rigorous punishment which is based particularly on the extent ofoffence or laundering of money committed. Section 19 of the act gives the appropriateauthority to arrest individuals who are proved guilty of the offence they are convicted for.ANTI-MONEY LAUNDERING LAWS – INDIAThe current section explains the different measures the government of India enacted to fightagainst the evils of money laundering activities and develop the economic condition of thenation. These measures include primarily the enactment of the Prevention of MoneyLaundering Act, 2002. Before the enactment of this act a set of substantive laws addressedthe issue of money laundering in the nation such as:? The Income Tax Act, 1961? The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,1974 (COFEPOSA)? The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPSA): this actempowers the government to mark out the origin of property that have been obtainedthrough the process of narcotic trafficking and even gives it the authority to prohibitthe transfer of such property. This act along with the SAFEMA is governed by thecompetent authority under the power of Ministry of Finance.51Somwanshi Singh Sanjay,Prevention of money laundering act, 2002: an overview, Legal ServiceIndia; http://www.legalserviceindia.com/articles/mlau.htmPage 36 MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIA? The Smugglers and Foreign Exchange Manipulators Act, 1976 (SAFEMA): This actin accordance with the above act also gives the government the authority to seize theproperty that has been held through violation of foreign exchange regulations.? The Benami Transactions (Prohibition) Act, 1988? The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act,1988? The Foreign Exchange Management Act, 2000, (FEMA)? The Criminal Law Amendment Ordinance , 1944: that permits the confiscation orattachment of such property which has been obtained through activities of bribery,corruption, theft, criminal breach of trust, and mostly those assets that aredisproportionate in comparison to the individual?s income.Certain chapters under these acts were dedicated to addressing the issue of money laundering,but the increase in modern and sophisticated techniques of alternative remittance systemincreased the concern over the fact that there is no stringent regulation in India that has beenimplemented with the main objective of combating this organized crime and its proceeds inth the second half of the 20 century.In India there are regulations available to combat all crimes such as smuggling, drugtrafficking, violation of foreign trade, narcotics, manipulations in stamp duty and foreigntrade and we even have special regulations to combat crimes such as detention and forfeitureof property illegally, the government implemented these laws over a period of time to combatthese strict crimes. Additionally, in the course of terming the foreign trade violation a civil52 offence the government also implemented the Foreign Exchange Management Act (FEMA).52C. Satapathy, Money Laundering: New Moves to Combat Terrorism, Economic and Political Weekly, Vol. Page 37 MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIAIrrespective of the existence of these acts the need for enactment of an effective act which iscomprehensive and helps in preventing the act of money laundering and its related criminalactivities. It is based on this objective that the PMLA came into force in year 2002 throughthe Prevention of Money Laundering Bill, 1998 with the main objective of preventive the actof money laundering and confiscating any property that is involved or is resultant of this53 offence or any of the activities connected with it. This act came into force in the year 2005. In addition to criminalising the act of money laundering, this act empowered the competentauthority to establish the Financial Intelligent Unit. The provisions of the act are divided into10 chapters containing 75 sections and a single schedule with a division in 5 parts. Eachchapter under this act has its own significance and is framed in a way to combat the activitiesof money laundering such as Chapter II of the act that explains the different acts of moneylaundering that constitute offence and punishment for the same.The salient features of this act include the recognising the offence of money laundering andits prescribed punishment as per the offence committed, attaching, confiscating andadjudicating property as per the provisions of Chapter III of the act and supervising theobligations of banking sector, intermediaries and financial sector who being the reportingentities should keep the record of all information in relation to money laundering activity andmost important of all declaring the offence under this act as cognizable and non-bailable54 offences.Being a comprehensive law, this law administers violation of every act that has beencomprehended by this act. Even the violation of the provisions under the PMLB are also38, No. 7 (Feb. 15-21, 2003), pp. 599-60253Same as note 654Section 45 PMLA Page 38 MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIAconsidered as scheduled offence and any offence that constitute under schedule offence istermed as a criminal offence under the provisions of PMLA and thus the individualcommitting it would be subject to rigorous punishment under section 4 of this act as55 explained in the above section of this chapter.The reason behind constituting different acts under one heading PMLA is because moneylaundering is not just a means of converting illegal income into legitimate income but isinclusive of all means to earn money in a legal form and conceal it from the publicauthorities. As the act of money laundering and it related and parallel crimes are notaddressed under a single heading thus the PMLA includes this wide variety of acts statedabove even though they do not have any particular relation to dealing with the Money- Laundering definition.In addition to PMLA, the other tool implemented by the government against this offence isthe establishment of FIU?s. The establishment of these units is enacted with theimplementation of the PMLA act they are the government agencies at the centre dealing withfinancial information in relation to nation?s anti-money laundering laws, processing andanalyze these information?s in such a way that they could be easily disseminated toappropriate authorities both of national and international stature in order to support thenation?s efforts to eradicate the offence of money laundering.The other regulatory framework implemented by the government to combat this offence is56 the rules and guidelines under the Prevention of Money-laundering Rules, 2005 where theinstitutions involved in financial transactions should maintain records of all the cash55Same as note 5156Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintainingand Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clientsof the Banking Companies, Financial Institutions and Intermediaries Page 39 MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIAtransactions that are equal or more than 10lakhs, all those transaction that are connectedintegrally and those which are suspicious. Also these institutions should make it a guideline ofurnish the information of these cash and suspicion transaction to the competent authority,Know Your Customer policy that have been issued by RBI, SEBI and IRDA and covers stagessuch as identification and acceptance of the customer, monitoring of the transactions andManaging the risk as per the master circular issued by RBI, FEMA which is considered as heprimary tool for combating the offence of money laundering before the enactment of PMLA.CHALLENGES & RECOMMENDATIONSThis section explains the different challenges faced by the Indian government for effectivelyimplementing the AML measures enacted by the government for curbing the criminal offenceof money laundering and its drastic effect of on the nation?s economy, continued withdiscussion on certain recommendation for overcoming these challenges and implementing thelaws effectively.Challenges:The Government of India does not put in greater resistance to this criminal activity because toa greater extent many of the political leaders are involved in these scandals. The otherimportant failure or challenges faced are a lack of proper control of bribery and corruption inthe nation. Below are the different challenges the Indian government faces whileimplementing the measures taken against money laundering such as:? Challenge to implement the provisions of AML Laws:One of the popular challenges faced by the Public Sector Banks along with the legacyof data sourcing issues also has the issue to implement the provisions of AML laws asthe new electronic system of migration of KYC information from the physical account Page 40 MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIAopening forms to electronic forms which is considered to be one of the uphill tasks forthese sector banks. However, this challenge situation is not observed much in private57 sector or foreign sector banks.? Lack of proper trained AML professionals:Lack of adequate AML professionals is also considered as one of the big operationalchallenges faced by the industrial sector for implementing AML laws. It is veryessential that every industrial organisation should make proper allocations forproviding essential training to its staff and establishment about the provisions of AMLlaws and complete knowledge on money laundering and its effects on the business.Provision of this knowledge is very essential such that the employees or anyindividual of the establishing is alert on the happenings in and around the industry and58 can update their authorities if they suspect any illegal act of money laundering. Butthe improper allocation of budget for facilitating training and coaching individuals isknown to be added agony to the banks and thus making AML law implementation achallenge.? Lack of training to legal officers:Despite the enactment of strict regulations against the offence of money laundering,the lack of Indian legal officer?s proper knowledge on AML regulations is one of theadditional challenges for implementation of these laws. The legal officers lack therequired knowledge in identify the individuals who are subject to the act of moneylaundering or who are involved in the proceeds of this criminal offence and eventracing the assets that are to be seized. This lack of knowledge and loophole in the lawmakes the launderers commit this offence. The officers additionally appear to lack57Anti-Money Laundering in India, A survey by World-Check and BMR Advisors, August 2009, Page no. 2;http://www.bmradvisors.com/upload/documents/AML%20Survey%20Report%20Sep20091251965180.pdf 58Ibid Page 41 MONEY LAUNDERING-COMPARATIVE ANALYSIS-THE UK &INDIAsufficient training for drafting, and implementing orders that are expeditiously forfreezing assets involved or the result of money laundering.The competent authority did take additional measures to overcome this challenge by59 organising 9 workshops for training on assets forfeiture and seizure regulations and60 procedures with the hope that assets involved in illicit narcotic proceeds are seized.? Additional challenges against the implementation of AML laws and regulations areemployee training issues, inconsistency in the policy, influence of bribed officials andpoliticians over the legal system, lack of coordination between different organisationsinvolved in the execution of AML laws and finally the inconsistency of processes andpolicies geographically.Recommendations:As stated in the above chapter the significant suggestion for combating the challenges ofmoney laundering and overcome the failures of the government in curbing this offence isthrough international cooperation by mobilising the international community and properunderstanding and implementation of laws. Based on this observation we would bediscussing certain recommendations for combating money laundering. The recommendations61 or suggestions are? Initiative to develop transparency over the hawala system,? Government should actively implement international initiatives that have beenimplemented for combating this offence,59New Delhi, Himachal Pradesh, Uttar Pradesh, Rajasthan and Andhra Pradesh60International Narcotics Control Strategy Report, 200661Chapter – IV Money Laundering in India: An Offshoot of Drug Trafficking, page nos 248 to 250 Page 42 "