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Polity & Governance
Mahesh

09/04/24 05:36 AM IST

Enactment of PMLA

In News
  • The Congress said that if voted to power, it will “put an end to the weaponisation of laws, arbitrary searches, seizures and attachments, arbitrary and indiscriminate arrests”.
Background
  • With the advent of global terrorism in the 1990s, there was a focus internationally on choking terror financing and the movement of illicit money across borders.
  • The Financial Action Task Force (FATF) was created in 1989 to coordinate anti-money laundering efforts across the world — and as a member, it was incumbent upon India to do its bit.
  • The PMLA was also enacted in response to the political declaration adopted by the special session of the United Nations General Assembly held on June 8 and 10, 1998, calling on member states to put in place national anti-money laundering legislation.
Enactment
  • The Prevention of Money-Laundering Bill, 1998 was introduced in Lok Sabha on August 4, 1998, by the Atal Bihari Vajpayee government.
  • The proposed law was focused on preventing money laundering and connected activities, confiscation of the proceeds of crime, setting up of agencies and mechanisms to coordinate measures to combat money laundering, etc.
  • As Finance Minister Yashwant Sinha introduced the Bill, parties across the political spectrum opposed what they said were “draconian” provisions.
  • The Bill was referred to the Department-related Standing Committee on Finance, which presented its 12th Report on March 4, 1999, to Lok Sabha.
  • On October 29, 1999, the government introduced The Prevention of Money-Laundering Bill, 1999 in Lok Sabha.
  • The Bill was passed by Lok Sabha on February 12, 1999, and by Rajya Sabha on July 25, 2002.
  • However, the law came into force only in 2005, after Rules were framed by the UPA government.
Key amendments
  • ‘Criminal conspiracy’ under Section 120B of the Indian Penal Code was added to the PMLA’s schedule among various other offences.
  • This has, over the years, allowed the ED to enter any case where a conspiracy is alleged, even if the principal offence is not part of the PMLA’s schedule.
  • For example, the ED was able to take over some FIRs related to alleged land-grabbing in Jharkhand because Section 120B IPC had been invoked.
  • This helped ED to build its land-grabbing case against former Jharkhand Chief Minister Hemant Soren. Soren is currently in jail in Ranchi.
  • In 2009, the ED also got international jurisdiction as far as tracking laundered money was concerned.
  • The PMLA was amended to move the Prevention of Corruption Act, 1988 (PC Act) to Part A of the statute’s schedule from Part B.
  • This was a significant move as it applied stringent bail conditions on those accused of corruption.
  • Section 45(1) of the PMLA requires that the public prosecutor must be given an opportunity to oppose any application for release on bail.
  • Where the public prosecutor opposes bail, the court must be satisfied that there were reasonable grounds to believe that the accused was not guilty and was unlikely to commit an offence if granted bail.
  • The amendments also enlarged the definition of the offence of money laundering to include activities such concealment, acquisition, possession and use of proceeds of crime as criminal activities, and provided that unless there is proof to the contrary, it shall be presumed that any proceeds of crime detected is involved in money laundering.
  • This effectively meant that if an individual deposited tainted money in the account of a relative or a family member, or bought a property in their name, they would be culpable even without being aware that the funds were tainted.
Source- Indian Express

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