NGOs on ED watchlist for funding Naxals

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NGOs on ED watchlist for funding Naxals

News:

  1. The Enforcement Director(ED) keeping eye on some NGOs that are suspected for funding naxals in various states.

Important facts:

2. The agency is preparing a list of these NGOs to examine their financial dealings.

3. The action is being taken following several rounds of multi-agency meetings.

4. The ED also identified some prominent industrial houses involved in paying ‘protection money’ to these organsiation.

5. ED will soon send summon to these houses for recording their statements.

6. The agency earlier has found that naxal leaders extorted money and laundered the funds.

7. Properties worth crores has been attached under Prevention of Money Laundering Act over the past few months.

8. States like Bihar, Jharkhand, West Bengal, Chhattisgarh, Odisha, Telangana are more prone to naxals.

Prevention of Money Laundering  Act,2002:

  • This act was enacted to prevent money-laundering and to provide for confiscation of property derived from money laundering.
  •   It came into force in 2005.
  •   PMLA defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.
  •   Salient Features of this act are as follows:

a) The provisions of this act are applicable to all financial institutions.

b) The agency monitoring the anti-Money laundering activities in India is the Financial Intelligence Unit (FIU-IND).

c) There can be punishment of imprisonment upto 3-7 years with fine upto 5 lakh rupees.

The Prevention of Money Laundering (Amendment) Act 2012

  •  The PMLA was enacted in 2002, but was amended thrice, first in 2005, then in 2009 and then 2012.
  •  PMLA (Amendment) Act, 2012 has enlarged the definition of money laundering by including activities such as concealment, acquisition, possession and use of proceeds of crime as criminal activities.
  •  Some other features are as follows:

a) The amendment has introduced the concept of Corresponding law to link the provisions of Indian law with the laws of foreign countries.

b) It also introduced the concept of ‘reporting entity, which would include banking company and financial institutions.

c) The Prevention of Money Laundering Act, 2002 levied a fine up to Rs 5 lakh. The amendment act has removed this upper limit.

d) The act has provided for provisional attachment and confiscation of property of any person (for a period not exceeding 180 days).

e) The act has conferred the powers upon the Director to call for records of transactions or any additional information that may be required for the purposes of investigation.

f) Obligation of banking companies, financial Institutions and Intermediaries to follow the KYC norms and maintain records for a minimum period of 10 Years.

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