Prevention of Money Laundering Act, 2002

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The Prevention of Money Laundering Act, 2002
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An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.
Citation Act No.15 of 2003
Enacted by Parliament of India
Date enacted 17 January 2003
Date assented to 17 January 2003
Date commenced 1 July 2005
Amendments
The Prevention of Money Laundering (Amendment) Act, 2005, The Prevention of Money Laundering (Amendment) Act, 2009

Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted to prevent money-laundering and to provide for confiscation of property derived from money-laundering.[1][2]

Objectives[edit]

The main objectives of this act are to prevent money-laundering as well as to provide for confiscation of property either derived from or involved in, money-laundering.[3]

Key definitions[edit]

  • Attachment: Prohibition of transfer, conversion, disposition or movement of property by an appropriate legal order.[4]
  • Proceeds of crime: Any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence.[5]
  • Money-laundering: Attempting to indulge or assist other person or actually involved in any activity connected with the proceeds of crime and projecting it as untainted property.[6]

Salient features[edit]

Punishment for money-laundering[edit]

The act prescribes that any person found guilty of money-laundering shall be punishable with rigorous imprisonment from three years to seven years. He could also be liable to fine of up to INR500000 (US$8,400)[7] However, vide amendment of PMLA, 2002 in 2012, the upper ceiling on the quantum of fine has been done away with.

Powers of attachment of tainted property[edit]

Appropriate authorities, appointed by the Govt of India, can provisionally attach property believed to be "proceeds of crime" for 180days. Such an order is required to be confirmed by an independent Adjudicating Authority.[8]

Adjudicating Authority[edit]

The Adjudicating Authority is the authority appointed by the central government. It decides whether any of the property attached or seized is involved in money laundering.[9]

Appellate Tribunal[edit]

An Appellate Tribunal is the body appointed by Govt of India. It is given the power to hear appeals against the orders of the Adjudicating Authority and any other authority under the Act.[10] Orders of the tribunal can be appealed in appropriate High Court (for that jurisdiction) and finally to the Supreme Court[11]

Special Court under Section 43 of Prevention of Money Laundering Act, 2002 (PMLA) says that the Central Government, in consultation with the Chief Justice of the High Court, shall, for trial of offence punishable under Section 4, by notification, designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.

Burden of proof[edit]

A person, who is accused of having committed the offence of money laundering, has to prove that alleged proceeds of crime are in fact lawful property.[12]

Similar laws in other countries[edit]

Money Laundering Control Act of 1986[edit]

This is an Act of the United States Congress that made money laundering a Federal crime. It for the first time in the United States criminalised money laundering.[13]

PATRIOT Act[edit]

Main article: PATRIOT Act

This is an Act of the United States Congress. The act, as a response to the terrorist attacks of 11 September, significantly reduced restrictions in law enforcement agencies' gathering of intelligence within the United States; expanded the Secretary of the Treasury’s authority to regulate financial transactions, particularly those involving foreign individuals and entities; and broadened the discretion of law enforcement and immigration authorities in detaining and deporting immigrants suspected of terrorism-related acts. The act also expanded the definition of terrorism to include domestic terrorism, thus enlarging the number of activities to which the USA PATRIOT Act’s expanded law enforcement powers can be applied.[14]

References[edit]

  1. ^ http://economictimes.indiatimes.com/articleshow/1156901.cms
  2. ^ http://fiuindia.gov.in/pmla2002.htm
  3. ^ "Prevention of Money Laundering Act, 2002". Financial Intelligence Unit (FIU-IND), Ministry of Finance, India. Retrieved 10 October 2012. 
  4. ^ "Section 2(1)(d) in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  5. ^ "Section 2(1)(u) in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  6. ^ "Section 3 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  7. ^ "Section 4 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  8. ^ "Section 5 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  9. ^ "Section 6 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  10. ^ "Section 25 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  11. ^ "Section 42 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  12. ^ "Section 24 in PMLA, 2002". Indian Kanoon. Retrieved 10 October 2012. 
  13. ^ Cassella, Stephan (September 2007). Money Laundering Laws. Retrieved 2 March 2011. 
  14. ^ Public Law Pub.L. 107–56