Terrorism, drug trafficking, corruption and organised crime all need the same thing: a way to make dirty money look clean. This chapter covers how money is laundered, how India’s anti-money laundering (AML) law and agencies work, the global standard-setter (FATF), and how organised crime connects to terror financing.

What UPSC asks

Mains GS III: money laundering as a threat to economic and internal security; effectiveness of the PMLA and the debate over its stringent provisions; the crime–terror nexus; India’s FATF evaluation; new channels such as virtual digital assets.
Prelims: stages of laundering, PMLA provisions, the parent ministry of ED and FIU-IND, FATF’s grey and black lists, the Fugitive Economic Offenders Act, and the Palermo Convention.

Key sub-topics

Sub-topic	Anchor
How laundering works	Placement → layering → integration; hawala, shell companies, trade mis-invoicing
Law	PMLA 2002 (in force 2005); Vijay Madanlal Choudhary (2022)
Agencies	Enforcement Directorate, FIU-IND (both under the Department of Revenue)
Allied laws	FEMA 1999, Benami Act (amended 2016), Black Money Act 2015, FEOA 2018
Global regime	FATF (1989), 40 Recommendations; India’s 2024 mutual evaluation
Organised crime	BNS 2023 Section 111; MCOCA 1999; UNTOC (Palermo, 2000)