Note that, contrary to popular understanding or impression of the term in India, money-laundering is not the process by which black money (ie, money on which tax has not been paid) becomes white. Rather, it represents a process by which money earned from criminal activities is delinked from its source and it is shown by one device or the other that the money is earned from legitimate activities. In fact, unlike conversion of "black" money into white, where tax savings are considered of prime importance, money-launderers are quite willing to pay tax on the income, but are keen that there is no link between the criminal activity and the money.

Money-laundering is sought to be seriouslycontrolled not merely because it is an anti-social activity, but rather it is one of those steps that facilitate and help conceal serious crimes. Huge amounts of money is generated from activities such as drug dealing, terrorism, and such other serious crimes and the next step in the process is to delink the money earned with the crime so that the money can be used by the perpetrators.

This process of delinking has become an art in itself with clever lawyers, accountants, bankers and other persons taking part and is called money-laundering, though this Bill gives an even wider definition. Hence, control of money-laundering is not an end by itself, but is aimed towards prevention of the crime that generates such money.

The Bill defines money laundering in three parts. But, first, one has to understand the definition of "proceeds of crime" which means any money derived directly or indirectly from an offence listed in any one of the five schedules attached to the Bill. These offences include murder, drugdealing, acceptances of bribes by public servants, currency forgery, etc. Note that these offences are punishable by their respective original acts, but if they result in any money which is dealt with any manner then it becomes punishable under this Bill.

Money-laundering, simply stated, means dealing in any manner with the proceeds of such crimes. If a person deals in such money in any way - he acquires, transfers, possesses, own, etc, it - it amounts to money-laundering. Secondly, if he "knowingly" enters into any transaction with it, that also comes under the ambit of money-laundering. Finally, concealing and aiding the concealment of such money also amounts to money-laundering. Note that the word "knowingly" qualifies only the act of entering into any transaction.

Thus, if a person innocently acquires, possesses, etc, any proceeds of crime, he would be still covered. This, in fact, is so broad that the use of the word "knowingly" becomes meaningless and any innocent act in relation to such money by atotally third party would also be covered and make that person liable to punishment. Thus, for example, a bank which unknowingly accepts deposit of a person which is the proceeds of a crime, that would also be deemed to be money-laundering.

Another feature of the Bill is that the onus of "mens rea" is not on the prosecution. In other words, the person charged with money-laundering is assumed to have a guilty or culpable state of mind and it is he who has to prove, beyond reasonable doubt, that he has no such guilty state of mind. Proving such a state of mind is quite a difficult task, but since this is one of the pre-requisites to punish a person for such a crime, this problem has been solved by placing the onus on the person charged.

It may be recollected that the old Bill required certain financial intermediaries to collect and maintain information regarding certain large transactions which may be independent or inter-connected. They were also required to maintain information as regards the identity ofall their clients. There were certain representations against this. Accordingly, the new Bill contains certain modifications. Firstly, banking companies are specifically included and therefore they also will have to maintain such information. However, the minimum amount of such transaction, the manner of maintaining such records, etc, which were the subject matter of controversy, have not been specified in the Bill and it is stated that these will be prescribed by the Union government separately.

Apart from imprisonment and fine, the proceeds of the crime (whether or not it remains in the original form) would be forfeited.

The commitment of the offence does not require any minimum or cut-off amount. Thus, if a public servant accepts even Rs 10 as a bribe he would be liable for punishment of minimum three years rigorous imprisonment.

An important feature of the new Bill which did not exist in the 1998 bill is that the Centre is empowered to enter into treaties with other countries for enforcing theprovisions of this Bill abroad and vice versa. It often happens that the perpetrator shifts abroad with his money. If a treaty has been signed with that country, a request can be made to that country to get the person and/or the money back to India. This would operate the other way round also.

Another peculiarity of the Bill is, while most of the crimes in the Schedules are serious offences carrying strict punishments, there are some crimes where the punishment under that Act is far lesser in extent than that prescribed under this Act. In other words, perpetration of the original crime may attract far lesser punishment but dealing in the proceeds of that crime would face higher punishment.

Furthermore, if a person is found not to have committed the original punishment, the moneys seized under this Act would be released.To conclude, an important law will come on the statute book once the Bill becomes an Act. However, it needs to be administered well and more safeguards against potential harassments ofinnocents need to be in place.