PMLA 2002 (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     11th April 2024        

Context: The PMLA Adjudicating Authority recently upheld the Enforcement Directorate's attachment of approximately Rs 752 crore worth assets belonging to the Congress-promoted National Herald newspaper and associated companies in a money laundering case.

Prevention of Money Laundering Act (PMLA), 2002

  • About: The Act was enacted in a 2002 response to India’s global commitment (including the Vienna Convention) to combat the menace of money laundering. 
  • Objective: The statement of objects and reasons of the PMLA Bill of 1999 refers to various international conventions and instruments dealing primarily with money laundering related to crimes involving drugs and narcotics.

oUnited Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988.

oThe Basle Statement of Principles, 1989.

  • Provisions of the Act

oSection 3 of the Act defines the offence of money laundering as any attempt, assistance, or involvement in activities related to the proceeds of crime, projecting them as untainted property.

oProceeds of Crime: Refers to any property obtained directly or indirectly as a result of criminal activity related to a Scheduled Offence, such as: Indian Penal Code, Narcotics Drugs and Psychotropic Substances Act, Prevention of Corruption Act.

oActions Against Persons Involved in Money Laundering: Seizure/Freezing of Property and Records, Attachment of Property.

Punishment (Section 4)

  • Rigorous imprisonment for a minimum of 3 years, extendable up to 7 years.
  • Fine may also be imposed.
  • Note: For offences related to Narcotic Drugs & Psychotropic Substances Act, 1985:
  • Punishment may extend to rigorous imprisonment for up to 10 years.
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