Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels.
Approach · directive: “discuss / elaborate”
What it asks · Explain how new technologies and open borders help launderers, then set out the national and international measures against money laundering.
It asks 3 things — answer each
- Discuss how emerging technologies and globalisation contribute to money laundering
- Elaborate the measures to tackle money laundering at the national level
- Elaborate the measures at the international level
Open with · Money laundering turns proceeds of crime into apparently clean assets through placement, layering and integration; technology and open borders speed every stage and blur the trail.
Cover
- Technology: crypto assets and mixers, wallets, mule accounts, online gaming and online shell companies give speed, anonymity and layering.
- Globalisation: open capital flows, offshore centres, correspondent banking and trade misinvoicing move funds across jurisdictions faster than agencies trace them.
- National: PMLA 2002 (section 3 offence, attachment, reporting entities, ED); FIU-India (2004); KYC and beneficial-ownership norms.
- Supporting laws: Benami Transactions (Prohibition) Amendment Act 2016, Black Money Act 2015, Fugitive Economic Offenders Act 2018; regulate virtual assets, use analytics.
- International: FATF standards and mutual evaluations (India placed in 'regular follow-up' in 2024), Egmont Group, UN conventions, MLATs and tax-information exchange.
Close with · Criminals adapt faster than statutes; holding FATF's 'regular follow-up' rating through the next review needs laws, technology and cross-border cooperation upgraded together.
Add value (verified)
- Section 3 of the Prevention of Money-laundering Act, 2002 defines the offence broadly, covering every stage from concealment and possession to use and projecting proceeds of crime as untainted.The Prevention of Money-laundering Act, 2002, Section 3: Offence of money-laundering (Financial Intelligence Unit-India) ↗“any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering”
- FATF adopted India's Mutual Evaluation Report at its June 2024 plenary and placed India in the regular follow-up category.News on AIR (Prasar Bharati): FATF adopts Mutual Evaluation Report of India, June 2024 ↗“India has been placed in the 'regular follow up category' in the "Mutual Evaluation Report of India" by Financial Action Task Force (FATF). The report was adopted in the FATF plenary held from the 26th to 28th June”
Question: UPSC's CS (Main) 2021, GS Paper III — paper ↗. Approach: Minimalist IAS, checked 3 Oct 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer· 223words · Minimalist IAS
Money laundering turns proceeds of crime into apparently clean assets through placement, layering and integration; technology and open borders speed every stage and blur the trail.
- Placement: cash deposited
- Layering: crypto, shells, transfers
- Integration: clean assets
How emerging technologies and globalisation help launderers
- Crypto and mixers: move value outside banks; wallets, mule accounts and online gaming split sums below reporting thresholds.
- Online shell companies: formed across jurisdictions in hours, hiding owners.
- Open capital flows: offshore centres, correspondent banking and trade misinvoicing outrun investigators across borders.
Measures at the national level
- PMLA 2002: section 3 defines the offence from concealment to projecting proceeds as untainted; attachment of proceeds, duties on reporting entities, ED enforcement.
- Intelligence: FIU-India (2004) analyses suspicious and cash transaction reports; KYC and beneficial-ownership norms bind banks and intermediaries.
- Supporting laws: Benami Transactions (Prohibition) Amendment Act 2016, Black Money Act 2015, Fugitive Economic Offenders Act 2018.
- Next steps: regulate virtual assets, analytics in transaction monitoring, real-time data sharing across agencies.
Measures at the international level
- FATF: standards and mutual evaluations, now covering virtual assets, with grey-listing as pressure; India's 2024 evaluation placed it in 'regular follow-up'.
- Egmont Group: FIU-to-FIU intelligence exchange.
- Treaties: UN conventions, mutual legal assistance and tax-information exchange.
Criminals adapt faster than statutes; holding FATF's 'regular follow-up' rating through the next review needs laws, technology and cross-border cooperation upgraded together.
Prepared by Minimalist IAS to the answer standard of Shivam Singh (mentor, 7 years) · facts checked against official sources (how we verify) · updated 3 Oct 2026. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.
