Score:
6.5/10
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Topper’s Copy
GS3
Internal Security
10 marks
What is money laundering? Explain its process and measures taken by India to combat it.
Student’s Answer
Evaluation by SuperKalam
Demand of the Question
- Definition of money laundering
- Process explanation of how money laundering works
- Measures taken by India to combat money laundering
What you wrote:
Money laundering is the illicit process of disguising the "Proceeds of Crime" as legitimate wealth, distinguishing it from mere untaxed black money.
Money laundering is the illicit process of disguising the "Proceeds of Crime" as legitimate wealth, distinguishing it from mere untaxed black money.
Suggestions to improve:
- Could enhance by citing recent data (e.g., **ED attached assets worth ₹9,371 crores under PMLA in 2023-24**) to establish the scale of the problem
What you wrote:
Process
[FLOWCHART: a process flow showing the stages of money laundering. Starting with "Placement" which points down to "Layering" followed by "Integration". Text beside the nodes includes: "Introducing dirty cash into the financial system" for the first stage; "Executing a complex web of transactions to obscure the audit trail" for the second stage; and "Re-entering the funds into the formal economy as clean wealth" for the third stage.]
This process converts illicit proceeds of crime into legitimate appearing wealth.
Process
[FLOWCHART: a process flow showing the stages of money laundering. Starting with "Placement" which points down to "Layering" followed by "Integration". Text beside the nodes includes: "Introducing dirty cash into the financial system" for the first stage; "Executing a complex web of transactions to obscure the audit trail" for the second stage; and "Re-entering the funds into the formal economy as clean wealth" for the third stage.]
This process converts illicit proceeds of crime into legitimate appearing wealth.
Suggestions to improve:
- Could add specific examples for each stage (e.g., **hawala transactions for placement, shell companies for layering, real estate investments for integration**) to make the process more concrete
What you wrote:
Measures
1. Statutory Anchor - PMLA, 2002 enables rapid asset attachment & shifts the burden of proof to the accused.
2. Institutional Grid - The Enforcement Directorate (ED) prosecutes syndicates with FIU-IND and enforcing the tracks anomalies.
3. Digital Vigilance - Mandating Virtual Asset Service Provider (VASP) registration with FIU-IND & enforcing FATF travel rules to choke crypto laundering.
4. Targeted laws - The Fugitive Economic Offenders Act, 2018 ensures swift confiscation of absconders' domestic & offshore properties.
5. Global Synergy - Real time financial intelligence sharing via Egmont Group
Measures
1. Statutory Anchor - PMLA, 2002 enables rapid asset attachment & shifts the burden of proof to the accused.
2. Institutional Grid - The Enforcement Directorate (ED) prosecutes syndicates with FIU-IND and enforcing the tracks anomalies.
3. Digital Vigilance - Mandating Virtual Asset Service Provider (VASP) registration with FIU-IND & enforcing FATF travel rules to choke crypto laundering.
4. Targeted laws - The Fugitive Economic Offenders Act, 2018 ensures swift confiscation of absconders' domestic & offshore properties.
5. Global Synergy - Real time financial intelligence sharing via Egmont Group
Suggestions to improve:
- Could elaborate on **Know Your Customer (KYC) norms and Suspicious Transaction Reports (STRs)** filed by banks (**over 15 lakh STRs filed annually**)
- Can mention **Cash Transaction Reports (CTRs) for transactions above ₹10 lakhs** and their role in detection
- Could include recent amendments like **PMLA Amendment Act 2019 expanding the definition of proceeds of crime**
What you wrote:
To tackle this menace we need robust financial forensics & Multi agency intelligence
To tackle this menace we need robust financial forensics & Multi agency intelligence
Suggestions to improve:
- Could strengthen by emphasizing **technology integration (AI-based transaction monitoring)** and **capacity building for financial intelligence units** as future roadmap for effective enforcement
Your answer demonstrates strong conceptual clarity with an excellent flowchart and comprehensive coverage of India's legal framework. The visual presentation and structured approach are commendable, though adding specific examples and compliance mechanisms would enhance depth.
Demand of the Question
- Definition of money laundering
- Process explanation of how money laundering works
- Measures taken by India to combat money laundering
What you wrote:
Money laundering is the illicit process of disguising the "Proceeds of Crime" as legitimate wealth, distinguishing it from mere untaxed black money.
Money laundering is the illicit process of disguising the "Proceeds of Crime" as legitimate wealth, distinguishing it from mere untaxed black money.
Suggestions to improve:
- Could enhance by citing recent data (e.g., **ED attached assets worth ₹9,371 crores under PMLA in 2023-24**) to establish the scale of the problem
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