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CMA Final · Cost and Management Audit · Anti-Money Laundering

A forensic auditor reviewing a case notes that a person has held and used tainted funds for several years after the original crime. Which statement reflects the Explanation to Section 3 of the PMLA on the nature of the money-laundering activity?

Under the Explanation to Section 3, money-laundering is a continuing activity. It continues until the person is directly or indirectly enjoying the proceeds of crime through concealment, possession, acquisition, use, or projecting or claiming them as untainted property, so it is not a one-time event.

  1. AThe activity ends once the proceeds of crime are first placed in a bank account
  2. BThe activity is a continuing one and continues until the person is directly or indirectly enjoying the proceeds by concealment, possession, acquisition, use, or projecting or claiming them as untaintedCorrect
  3. CThe activity ends on the date the scheduled offence was committed
  4. DThe activity is complete once the proceeds are transferred to a third party for the first time

Explanation

Explanation (ii) to Section 3 states that the process or activity connected with proceeds of crime is a continuing activity lasting until the person enjoys the proceeds in any of the listed ways. The other options treat it as a one-time event, which is wrong.

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