All real estate transactions will have to be reported to the country’s anti- moneylaundering agency once the government amends a key law that seeks to curb black-money transactions.
The government plans to amend the Prevention of Money Laundering Act , which will require property registrars to file data of transactions recorded by them with the Financial Intelligence Unit, or FIU, a finance ministry official said. FIU is the national agency responsible for processing and disseminating information on suspect financial transactions to enforcement agencies across the world. “The scope of the (Prevention of Money Laundering) Act is being widened,” the official said.
The government may also bring several other transactions under the anti-moneylaundering act, according to the official. These may include futures and options trade in commodities.
Real estate transactions in excess of 30 lakh are already reported to the Income-Tax Department, but the government wants to tighten scrutiny of the sector, often accused of rampant use of black money and moneylaundering. Although there is no authentic data available, the cash component in property transactions is widely believed to be as high as 50%. This helps tax evaders park untaxed money easily in property deals.
“The realty sector is known to be vulnerable to laundering, so this is a move in the right direction,” said anti-moneylaundering expert Navita Srikant. “But suspicious transactions require real-time monitoring and coordination between supervising authorities. Automation of transactions , training of officers and knowledge of red flags to raise suspicious transaction is the key.” Bringing real estate transactions under the anti-moneylaundering law will ensure harsher punishment for tax evaders.
At present, many states rely on circle rates to check the use of black money in land deals. A circle rate is the minimum rate fixed by the government for valuation of a property. But it is not considered foolproof as the rate leaves scope for intra-region variations .
The amended law will also help track transactions involving funds from tax havens or territories named as “risky” by the financial action task force, or FATF. FATF is an inter-governmental body set up by the Group of Seven (G-7 ) nations for creating global policies and framework to combat moneylaundering and financing of terrorism. India became its 34th member last June, although it did not meet all the requirements.
The country is undergoing an onsite inspection by the agency on the state of compliance, the finance ministry official said, but he did not link the two. “India’s anti-money laundering law is being amended not just to meet international commitments but to go beyond ,” he said.
Incidentally, a parliamentary standing committee that examined the amendments to the antimoneylaundering law had asked the government to bring lawyers, notaries, real estate agents and gold dealers within its ambit.
Even the FATF had asked India to extend the act to a range of designated nonfinancial professionals and businesses, such as lawyers and real estate agents, and ensure they were effectively regulated and supervised. Many of these intermediaries will be indirectly covered by the act once property transactions begin to be reported.
Money Laundering watchdog to track realty deals transactions under the anti-moneylaundering
Doing laundry the "green" way
Tomorrow is Saturday, which is Laundry Day at the Jennebach home. Since I'm the stay-at-home dad, I get to do a bunch of chores, laundry being just one of them. When we bought appliances for our house three years ago, we decided to get a front-loader washer and dryer. We've been very happy with our purchase - it has great capacity, gets clothes clean and seems to be running very efficiently, as far as I can tell.
There are a few things to keep in mind when doing laundry, be it in a front-loader or "regular" washer - these tips can help you save water, energy and detergent, which will translate to money in your pocket:
- Find the right temperature: most clothes don't need to be washed in hot or even warm water, and none of them need to be rinsed in warm water at all. The warmer your water, the more it will cost per load. In our house, we pretty much wash towels and anything seriously soiled in hot/cold. Everything else gets washed in cold/cold.
- Which brings us to the second point - detergent. Make sure to use the right detergent, and the right amount. Using more detergent will not make your clothes cleaner, but will be money wasted.
- Next, load the machine to capacity, but not beyond. A full load utilizes the washer best - overloading it could damage it.
- Shake out each item before tossing it in the dryer (I'm skipping the clothesline because it's most likely impractical for 90% of us Minnesotans, but if you use one, good for you!). It will get some wrinkles out and "air" the piece at the same time, so the dryer will be able to keep it fluffy and dry it faster.
- Take your laundry out of the dryer immediately after it's finished drying. It will fold easier and have fewer wrinkles.
- Run your dryer loads as close together as possible. That way, the dryer stays warm from load to load and saves energy to "re-heat".
"The process of taking the proceeds of criminal activity and making them appear legal"
Laundering allows criminals to transform illegally obtained gain into seemingly legitimate funds. It is a worldwide problem, with approximately $300 billion going through the process annually in the United States. The sale of illegal narcotics accounts for much of this money. Those who commit the underlying criminal activity may attempt to launder the money themselves, but increasingly a new class of criminals provides laundering services to Organized Crime. This new class consists of lawyers, bankers, and accountants.
Criminals want their illegal funds laundered because they can then move their money through society freely, without fear that the funds will be traced to their criminal deeds. In addition, laundering prevents the funds from being confiscated by the police.
Money laundering usually consists of three steps: placement, layering, and integration. Placement is the depositing of funds in financial institutions or the conversion of cash into negotiable instruments. Placement is the most difficult step. The easiest way to begin laundering large amounts of cash is to deposit them into a financial institution. However, under the federal Bank Secrecy Act of 1970 (BSA), 31 U.S.C.A. §§ 5311 et seq., financial institutions are required to report deposits of more than $10,000 in cash made by an individual in a single day. To disguise criminal activity, launderers route cash through a "front" operation; that is, a business such as a check-cashing service or a jewelry store. Another option is to convert the cash into negotiable instruments, such as cashier's checks, money orders, or traveler's checks.
Layering involves the wire transfer of funds through a series of accounts in an attempt to hide the funds' true origins. This often means transferring funds to countries outside the United States that have strict bank-secrecy laws. Such countries include the Cayman Islands, the Bahamas, and Panama. Once deposited in a foreign bank, the funds can be moved through accounts of "shell" corporations, which exist solely for laundering purposes. The high daily volume of wire transfers makes it difficult for law enforcement agencies to trace these transactions.
Integration involves the movement of layered funds, which are no longer traceable to their criminal origin, into the financial world, where they are mixed with funds of legitimate origin.
Many banks did not comply with the BSA during the 1970s and early 1980s. Following several federal investigations where it was revealed that banks had failed to report billions of dollars of cash transactions, reporting requirements were strengthened. Congress also enacted the Money Laundering Control Act of 1986 (MLCA), 18 U.S.C.A. §§ 1956 et seq. This statute criminalizes money laundering itself. It centers its attention on the criminals and conspirators who seek to launder the proceeds of illegal activity, including merchants, bankers, and members of the professions who assist criminals with money laundering. Another provision of the MLCA authorizes the government to confiscate all property that is traceable to violations of laws against money laundering.
After the September 11th Attacks on the United States in 2001, the federal government began to investigate more closely the connection between Terrorism and the sale of illegal drugs. According to President george w. bush, "[T]errorists use drug profits to fund their cells to commit acts of murder. If you quit drugs, you join the fight against terror in America." Terrorists have laundered money through such foreign countries as Colombia and Afghanistan. In September 2002, the Drug Enforcement Administration opened a museum exhibit in New York entitled "Target America: Traffickers, Terrorists and You" in an effort to educate the American public about the connection between drug sales and terrorism.
