Key Provisions Of The Prevention Of Money Laundering Act, 2002 (PMLA)

The Prevention of Money Laundering Act (PMLA), 2002 is a crucial legislative framework in India aimed at combating money laundering and preventing the misuse of financial systems for illicit activities. Enacted to curb the generation and circulation of black money, PMLA is instrumental in ensuring financial transparency and regulatory compliance in the economy.

The primary objectives of PMLA are:

1. Prevention and Control of Money Laundering

PMLA is designed to prevent the process of money laundering, where illicit funds generated from illegal activities are disguised as legitimate earnings. The law provides stringent measures to track and curb such practices.

2. Confiscation and Seizure of Proceeds of Crime

One of the key provisions of PMLA is the power to attach, seize, and confiscate assets acquired through money laundering. This ensures that criminals do not benefit from illicit financial gains.

3. Punishment for Money Laundering Offenses

PMLA establishes a strict legal framework for penalizing those involved in money laundering activities. Offenders can face rigorous imprisonment and heavy fines.

4. Strengthening the Financial System Against Illicit Transactions

The act aims to safeguard the integrity of financial institutions by mandating due diligence, record-keeping, and reporting of suspicious transactions by banks, financial intermediaries, and other regulated entities.

5. Compliance with International Standards

India, as a member of the Financial Action Task Force (FATF), has implemented PMLA to align with global standards in combating money laundering and terrorist financing.

6. Prevention of Funding to Illegal Activities

PMLA ensures that funds are not diverted to illegal activities such as terrorism, drug trafficking, human trafficking, and other organized crimes.

7. Establishment of Specialized Investigation Agencies

The law provides for the establishment of enforcement agencies such as the Enforcement Directorate (ED) to investigate and prosecute money laundering cases.

The scope of the Prevention of Money Laundering Act is extensive, covering a wide range of financial and economic crimes.

1. Applicability Across Individuals and Entities

PMLA applies to a broad range of individuals and organizations, including:

• Individuals
• Companies & Corporations
• Banks & Financial Institutions
• Real Estate Agents & Builders
• Stock Brokers & Investment Firms
• Crypto Exchanges & Virtual Asset Service Providers (VASPs)

Reporting and Regulatory Compliance

Financial institutions and intermediaries are required to:

• Maintain records of transactions for five years
• Report suspicious transactions to the Financial Intelligence Unit-India (FIU-IND)
• Conduct KYC (Know Your Customer) and AML (Anti-Money Laundering) measures

Investigation and Prosecution Mechanism

• The Enforcement Directorate (ED) is the primary investigative agency for money laundering cases.
• Special PMLA Adjudicating Authorities and Appellate Tribunals handle disputes and appeals.
• The Act allows for cooperation with international financial and legal bodies in tracking and prosecuting offenders.

Extraterritorial Jurisdiction

PMLA applies to:

• Offenses committed outside India if they involve Indian citizens or impact Indian financial institutions.
• International financial transactions linked to money laundering can be investigated under PMLA.

Attachment and Confiscation of Property

• Properties acquired through money laundering, whether movable or immovable, can be attached by the ED.
• The Act allows for freezing of bank accounts suspected to be linked to money laundering.

Stringent Penalties

• Rigorous imprisonment ranging from three to seven years (can extend to ten years for certain offenses).
• Financial penalties without an upper limit, depending on the severity of the offense.

Under Section 3, money laundering is defined as:

"Whosoever directly or indirectly attempts to indulge or knowingly assists or is a party to the activity connected with the proceeds of crime, including its concealment, possession, acquisition, or use, shall be guilty of money laundering."

It is important to note that Money laundering offence extends beyond direct involvement and includes aiding, abetting, and facilitating illicit transactions. Possession of criminal proceeds with knowledge is sufficient to establish an offense. The definition has been broadly interpreted by courts to include layering and integrating illicit funds into legitimate financial systems.

In Kartikeya Sharma v. Union of India¹, The Delhi High Court ruled that indirect involvement, such as facilitating money transfers through shell companies, falls under the ambit of Section 3 of PMLA. In Vijay Madanlal Choudhary v. Union of India², the Supreme Court upheld the stringent provisions of PMLA and ruled that the offense of money laundering is independent of the scheduled offense.

Proceeds of Crime (Section 2(1)(u))

The term "Proceeds of Crime" is a critical element in the Prevention of Money Laundering Act (PMLA), 2002, as it determines whether an offense falls under the purview of money laundering. Section 2(1)(u) of PMLA defines proceeds of crime and lays the foundation for the attachment, confiscation, and prosecution of assets acquired through illegal means.

According to Section 2(1)(u) of the Prevention of Money Laundering Act, 2002, Proceeds of Crime means:

"Any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offense or the value of any such property."

This definition implies that any money, assets, or properties acquired through criminal activities are considered proceeds of crime. The scope of this definition has been expanded through amendments to include assets located outside India as well.

Key Elements of "Proceeds of Crime"

1. Derived from Criminal Activity
2. • The property must originate from criminal activity linked to a scheduled offense (offenses listed in the PMLA Schedule).
   • Criminal activities include corruption, fraud, drug trafficking, smuggling, tax evasion, and corporate crimes.
3. Direct or Indirect Acquisition
4. • The property can be acquired directly from illegal activities (e.g., bribe money).
   • It can also be indirectly acquired (e.g., reinvested money from illicit activities into real estate).
5. Includes All Forms of Property
6. • The term "property" under PMLA includes:
   • • Movable and immovable assets (cash, real estate, vehicles, gold, shares, etc.).
     • Tangible and intangible properties.
     • Cryptocurrencies and virtual digital assets (added under recent amendments).
7. Expansion to Foreign Properties
8. • After amendments in 2015, "Proceeds of Crime" also include property situated outside India if it is derived from criminal activities within India.
9. Value of the Property
10. • Even if the actual asset is no longer available, its equivalent value can be considered proceeds of crime and can be attached or confiscated.

The Enforcement Directorate (ED) has broad powers to attach and seize assets deemed as proceeds of crime.

The term "proceeds of crime" refers to property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offense. Here it is pertinent to note that even if money is transferred multiple times, the original taint remains, and the last possessor is liable. Confiscation applies not only to money but to any assets purchased using illicit funds. Enforcement Directorate (ED) has been equipped with wide powers to attach and seize assets deemed as proceeds of crime.

In B. Rama Raju v. Union of India³: The Andhra Pradesh High Court upheld that all assets acquired through the proceeds of crime are liable for confiscation, irrespective of third-party ownership. In the case of Enforcement Directorate v. Abdul Razzaque Mohammed Sayyed⁴ the Supreme Court emphasized that the mere transfer of property does not negate its character as proceeds of crime.

Burden of Proof Under PMLA

One of the significant aspects of PMLA is the concept of the burden of proof, which plays a pivotal role in determining the culpability of individuals accused of money laundering. Unlike general criminal law, where the burden of proof lies on the prosecution to prove guilt beyond a reasonable doubt, the PMLA follows a reverse burden of proof approach. This means that once the prosecution establishes a prima facie case of money laundering, the accused must prove that the property or money in question is not derived from criminal activities.

The burden of proof is a fundamental principle in criminal law that determines who is responsible for proving a particular fact in a legal proceeding. It consists of two key components:

1. Legal Burden (Primary Burden): This is the obligation to establish the elements of the offence beyond a reasonable doubt, typically resting on the prosecution.
2. Evidential Burden (Shifting Burden): This burden shifts between the prosecution and the defense at different stages of the trial.

Special statutes like the PMLA impose a reverse burden of proof on the accused.

Presumption Under PMLA

One of the key features of PMLA is the legal presumption that shifts the burden of proof to the accused in cases related to money laundering. This presumption of guilt differs from general criminal law, where an accused is considered innocent until proven guilty.

The presumption under PMLA strengthens enforcement actions by enabling the government to seize illicit assets and prosecute offenders effectively. However, it also raises concerns regarding the rights of the accused and due process.

In legal terminology, presumption refers to an assumption made by the court about a fact until proven otherwise. There are two types of presumptions:

In general criminal law, an accused is presumed innocent unless the prosecution proves guilt beyond a reasonable doubt. Under PMLA, the accused is presumed guilty of money laundering unless they can prove their innocence. This shifts the burden of proof from the prosecution to the accused.

The PMLA incorporates the principle of reverse burden of proof, making it a stringent law to deter financial crimes.

The PMLA contains multiple presumptive provisions that impact various aspects of money laundering cases. These are primarily found under Sections 23, 24, and 22 of the PMLA.

Presumption in Case of Interconnected Transactions (Section 23)

Section 23 of PMLA states:

"Where money laundering involves two or more interconnected transactions, and one or more such transactions is proved to be involved in money laundering, then the presumption shall be that the other transactions are also part of money laundering unless proven otherwise."

So, if the prosecution proves that one transaction is linked to money laundering, all interconnected transactions are presumed to be illegal. The burden shifts on the accused to prove that the remaining transactions are legitimate. This presumption helps law enforcement agencies trace the flow of illicit funds.

Section 24 – Presumption of Money Laundering

The reverse burden of proof under PMLA is explicitly provided under Section 24, which states:

"Where a person is accused of having committed the offence of money laundering under Section 3, the burden of proving that the proceeds of crime are untainted property shall be on the accused."

This provision implies that once the Enforcement Directorate (ED) establishes that an individual has indulged in an activity related to proceeds of crime, it is the responsibility of the accused to prove that the property in question is legitimate and not derived from criminal activities. The prosecution does not need to prove the mens rea (guilty intent) of the accused beyond a reasonable doubt in money laundering cases. This provision follows the principle "guilty until proven innocent", which is contrary to the general presumption of innocence in criminal jurisprudence.

The reverse burden of proof under PMLA has several critical implications. In most criminal cases, the prosecution bears the burden of proving the accused's guilt beyond a reasonable doubt. However, under PMLA, the accused must prove their innocence once the prosecution establishes a prima facie case of money laundering. The accused must produce documentary evidence, bank records, business transactions, or other material to prove the legitimacy of the alleged proceeds of crime. If the accused fails to do so, they are presumed guilty, leading to attachment and confiscation of property.

The Enforcement Directorate (ED) is empowered to seize and attach properties based on its prima facie findings. The accused must challenge such actions in the Adjudicating Authority, Appellate Tribunal, or higher courts, making legal proceedings complex and prolonged. Individuals and businesses may face difficulties in proving the legitimacy of large transactions, particularly when the money trail is complex. This could impact entrepreneurs, investors, and financial institutions dealing with compliance under PMLA.

The reverse burden of proof under Section 24 has been upheld and interpreted in several landmark judgments by Indian courts.

In Rohit Tandon v. Enforcement Directorate ⁵, the Supreme Court ruled that money laundering is a serious offence affecting the economy and national security. The court held that once the prosecution establishes a link between the accused and proceeds of crime, it is the accused's responsibility to prove that the funds are not tainted.

In Nikesh Tarachand Shah v. Union of India ⁶the Supreme Court struck down the mandatory twin conditions for bail under Section 45 of PMLA as unconstitutional. However, the court acknowledged that the burden of proof under Section 24 remains valid, emphasizing that money laundering laws require stringent provisions.

In Vijay Madanlal Choudhary v. Union of India⁷, the Supreme Court upheld the constitutionality of PMLA's stringent provisions, including Section 24 on burden of proof. It ruled that money laundering is a continuing offence, and the accused must establish the legitimacy of assets once the prosecution presents sufficient material.

Given the stringent provisions of PMLA, the accused must take specific steps to prove their innocence. The accused must keep detailed records of income, tax returns, bank transactions, and property ownership documents and ensure a clear audit trail for high-value transactions.

The accused of money laundering, has to submit all business records, agreements, and contracts proving the legitimate source of income. Documentary evidence like income tax filings, salary receipts, and asset purchase documents can help establish innocence. Independent auditors can also validate financial records and confirm that the alleged proceeds are from lawful sources. Financial experts and chartered accountants can help counter the ED's allegations.

The reverse burden of proof under PMLA has been widely debated, with several concerns raised. Critics argue that the presumption of guilt under Section 24 violates Article 21 (Right to Life and Liberty) of the Indian Constitution. The principle of "innocent until proven guilty" is a cornerstone of justice, but PMLA presumes guilt. The Enforcement Directorate (ED) has been accused of abusing its powers by attaching properties and arresting individuals without strong evidence. In cases involving large financial transactions or offshore accounts, proving innocence becomes a herculean task. The burden of proof under PMLA is a crucial legal provision aimed at combating financial crimes and ensuring that proceeds of crime are not concealed. However, the reverse burden of proof places significant challenges on the accused, requiring them to prove their innocence. While the Supreme Court has upheld this provision, concerns regarding misuse, human rights violations, and excessive powers of enforcement agencies remain. To strike a balance between law enforcement and fundamental rights, there is a need for judicial safeguards, procedural fairness, and transparent investigations under PMLA.

Section 22 of the PMLA states:

"Whenever any document or record is found in the possession of the authorities, it shall be presumed that the contents of such documents are true unless the person concerned proves otherwise."

So, if the ED seizes documents, showing illegal financial transactions, the court presumes their authenticity. The onus is on the accused to disprove the authenticity of such records.

Power to Summon and Record Statements (Section 50 of the PMLA)

To enforce the PMLA effectively, investigative agencies are vested with extensive powers to conduct inquiries, gather evidence, and summon individuals for examination. Section 50 of the PMLA grants the Enforcement Directorate (ED) and other designated authorities the power to summon, record statements, and examine witnesses under oath. This provision plays a crucial role in tracing money laundering activities, ensuring compliance, and establishing a robust framework for financial investigations.

Section 50

Section 50 of PMLA states:

"(1) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:

• Summoning and enforcing the attendance of any person and examining him on oath;
  (b) Requiring the discovery and production of documents;

(c) Receiving evidence on affidavits;

(d) Issuing commissions for the examination of witnesses and documents;
(e) Any other matter which may be prescribed."

"(2) Every proceeding under sub-section (1) shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code (IPC)."

"(3) Subject to any rules made in this behalf by the Central Government, the Director or any other authority specified by it in this behalf may impose fine for non-compliance of summons issued under sub-section (1), which shall not exceed five hundred rupees for each such failure."

Thus, Section 50 grants quasi-judicial powers to the ED and enables it to conduct thorough inquiries into money laundering cases.

Section 50 provides five primary powers to the Enforcement Directorate (ED)

1. Power to Summon Individuals and Enforce Attendance

• The Director, Joint Director, or Deputy Director can summon any person, including:
• • The accused in a money laundering case.
  • Witnesses, business associates, or financial intermediaries.
  • Officials from banks, financial institutions, and corporate entities.
• Individuals summoned must appear in person and answer all questions related to the investigation under oath.

Power to Examine Individuals on Oath

Authorities under PMLA have the same powers as civil courts under the Code of Civil Procedure (CPC), 1908. This allows them to question individuals under oath, making their statements legally binding. False statements given under oath can result in prosecution under Section 193 of IPC (Perjury).

The ED has the power to require production of documents, and If a summoned individual fails to produce documents, it may be treated as obstruction of justice. The investigating authority can also accept written statements and sworn affidavits as evidence. This helps in collecting testimonies without requiring in-person attendance in all cases.

The statements Recorded Under Section 50 Have Legal Standing, and are admissible as evidence. Since ED officers act as quasi-judicial authorities, statements given before them are equivalent to evidence recorded in a court of law. Once a statement is recorded, it is presumed to be true unless proven otherwise. Under Section 24 of PMLA, the burden of proof is on the accused to establish that their transactions are legitimate.

Several landmark judgments have clarified the legal scope and validity of Section 50. In K. K. Patel v. State of Gujarat⁸, the Supreme Court ruled that statements recorded by authorities with quasi-judicial powers are admissible in court. It upheld that authorities like the ED can record evidence similar to a civil court.

In Ramesh Chandra Mehta v. State of West Bengal⁹, the Supreme Court held that statements recorded under special laws are valid even if the accused is not provided immediate legal representation. This means summoned individuals must answer questions truthfully, even without a lawyer present.

In the case of Vijay Madanlal Choudhary v. Union of India¹⁰, the Supreme Court upheld the constitutionality of Section 50, stating that the ED's power to summon and record statements is not arbitrary, Money laundering is a serious economic offence, justifying strict powers, and Statements given to ED are voluntary and admissible in court.

Scheduled Offences Under PMLA

A crucial aspect of PMLA is the concept of "Scheduled Offences," which are offenses listed under the Schedule to the PMLA. These offenses serve as the basis for initiating proceedings under the Act. Simply put, money laundering can only be prosecuted under PMLA if it originates from a crime that is designated as a scheduled offense under the Act.

Section 2(1)(y) of PMLA defines Scheduled Offences as those listed in the Schedule to the Act and categorizes them under Parts A, B, and C. If a person is directly or indirectly involved in the proceeds of crime related to a scheduled offence, they can be charged under Section 3 of PMLA. Further If a person is suspected of laundering proceeds from a scheduled offence, their assets can be provisionally attached under Section 5 of PMLA. It may be noted that Section 45 of the PMLA deals with Cognizance and Bail Provisions, which makes offences under PMLA cognizable and non-bailable, meaning ED can arrest an accused without prior approval.

Scheduled offences are specific crimes listed in the Schedule to the PMLA, the commission of which generates proceeds of crime, which in turn may be laundered. These offences, also known as predicate offenses, are derived from various other Indian laws. A case under PMLA cannot be initiated unless it involves proceeds of crime linked to a scheduled offense. The Enforcement Directorate can take action under PMLA only if a scheduled offence has been registered by another law enforcement agency (such as the police or CBI).

Scheduled offences under PMLA are categorized into three parts: Part A, Part B, and Part C.

1. Part A – Serious Offences

Part A includes serious criminal offences listed under various laws. These offences are considered grave enough to attract PMLA investigations regardless of the amount involved.

Some key laws and offences under Part A include:

(i) Indian Penal Code (IPC), 1860

(ii) Narcotic Drugs and Psychotropic Substances Act, 1985

(iii) Explosive Substances Act, 1908

(iv) Prevention of Corruption Act, 1988

(v) Unlawful Activities (Prevention) Act, 1967

(vi) Arms Act, 1959

(vii) Customs Act, 1962

Any offence listed under Part A is sufficient to invoke PMLA, regardless of the value of proceeds of crime.

2. Part B – Monetary Threshold Based Offences

Part B includes offences where PMLA applies only if the proceeds of crime exceed ₹1 crore.

3. Part C – Transnational Crimes

Part C includes offences that have a cross-border impact or involve criminal activities across multiple countries.

In Nikesh Tarachand Shah v. Union of India¹¹, the Supreme Court struck down Section 45 of PMLA, ruling that automatic denial of bail for scheduled offences was unconstitutional. The government later amended the Act to restore bail conditions.

In the case of Vijay Madanlal Choudhary v. Union of India¹², the Supreme Court upheld the constitutionality of PMLA and ruled that Scheduled offences are essential for invoking PMLA. It was further held that Proceeds of crime must be traced to a scheduled offence, and PMLA does not violate fundamental rights.

Since PMLA applies only if a scheduled offence is committed, it prevents arbitrary misuse of money laundering laws. Police, CBI, and other investigative agencies must first register a scheduled offence before ED can act.

Attachment and Confiscation of Property Under the PMLA

Sections 5 and 8 of PMLA provide the legal framework for the attachment, adjudication, and eventual confiscation of property suspected to be linked to money laundering activities. These provisions enable the Enforcement Directorate (ED) to take preemptive action to prevent the accused from disposing of or using the proceeds of crime.

The purpose of Section 5 is to prevent the accused from transferring or selling assets linked to money laundering, and to ensure that the proceeds of crime remain available for confiscation upon conviction. Under the attachment provisions Director, Deputy Director, or Assistant Director of Enforcement Directorate (ED) have the power to attach property under PMLA. The attachment is provisional, meaning it is subject to further adjudication.

For a property to be attached under Section 5, the following conditions must be met:

• There must be "proceeds of crime": The property must be derived, directly or indirectly, from a scheduled offence.
• A case must be registered under PMLA: The Enforcement Directorate must have reason to believe that the property is involved in money laundering.
• There must be an urgent need to prevent disposal: The ED must show that if the property is not attached, the accused might dispose of it, making confiscation impossible.
• The Director must record reasons in writing: The decision to attach property cannot be arbitrary and must be based on material evidence.

The provisional attachment is valid for 180 days from the date of order. During this period, the Adjudicating Authority must examine the case and decide whether to confirm or reject the attachment. The accused can challenge the attachment before the Adjudicating Authority (Section 8), and if the Adjudicating Authority confirms the attachment, the accused can appeal to the Appellate Tribunal and High Court. Once the property is attached, the accused cannot sell, transfer, or use the attached property.

Once a property is provisionally attached under Section 5, further legal steps follow under Section 8 for Adjudication and Confiscation of the attached property.

The Adjudicating Authority (appointed under PMLA) reviews the evidence and justification for the attachment.

Steps in Adjudication:

1. Notice to Accused:
2. • The Adjudicating Authority issues a show cause notice to the accused and any person with an interest in the attached property.
   • The accused is required to prove that the property is not proceeds of crime.
3. Hearing and Examination:
4. • The Adjudicating Authority examines documents, bank records, financial transactions, and statements.
   • The accused can present evidence in their defense.
5. Final Decision:
6. • If the Adjudicating Authority confirms that the property is proceeds of crime, it remains attached and can be confiscated after trial.
   • If the authority finds no sufficient evidence, the property is released.

Confiscation of Property

• If a person is convicted under PMLA, the attached property is permanently confiscated to the Government of India.
• Confiscation means the accused loses all rights over the property.

Confiscation Without Conviction

• Even if the accused is not convicted, the property can still be confiscated in certain cases:
• • If the accused cannot justify the legitimacy of the property.
  • If the accused absconds or is untraceable.
  • If the property belongs to a foreign national outside India.

Disposal of Confiscated Property

• Confiscated assets are taken over by the Central Government and may be:
• • Auctioned to recover public money.
  • Transferred to state agencies for public use.

In B. Rama Raju v. Union of India¹³, the Andhra Pradesh High Court upheld the constitutionality of Section 5, ruling that provisional attachment does not violate property rights if done with proper evidence.

In the case of J. Sekar v. Union of India¹⁴, the Supreme Court held that Section 5 requires a strong reason to believe that the property is linked to proceeds of crime, and ED cannot attach property arbitrarily.

In Vijay Madanlal Choudhary v. Union of India¹⁵, the Supreme Court upheld the broad powers of ED under Sections 5 and 8. This ruling confirmed that property could be attached and confiscated even if the accused is not convicted, as long as the link to money laundering is established.

In Gautam Kundu v. Enforcement Directorate¹⁶, the Supreme Court ruled that provisional attachment should not be used as a harassment tool, and ED must ensure due process is followed before seizing assets.

Investigation and Enforcement Powers Under PMLA

Sections 48 to 66 of the Act outline the authorities responsible for enforcement, their powers, and the procedures they follow to combat financial crimes. These provisions are critical in ensuring the detection, attachment, confiscation, and prosecution of illicit assets acquired through money laundering.

PMLA empowers agencies like the Enforcement Directorate (ED), the Financial Intelligence Unit-India (FIU-IND), and the Adjudicating Authority to take strict action against offenders. The Act also ensures international cooperation to trace and recover proceeds of crime held outside India.

Obligations of Financial Institutions and Reporting Entities

Financial institutions, banks, and intermediaries play a crucial role in combating money laundering. Sections 61 to 65 outline their responsibilities, including the obligation to maintain transaction records for five years and report any suspicious transactions to FIU-IND. Non-compliance can result in severe penalties, financial sanctions, or even criminal prosecution.

Section 62 imposes penalties on banks and financial entities that fail to report or assist in money laundering investigations. Section 63 penalises individuals or institutions that provide false information or attempt to conceal financial transactions related to money laundering. To ensure smooth investigations, Section 64 allows investigating agencies to directly access financial records without bureaucratic delays.

Information Sharing and Overriding Provisions

Section 66 strengthens inter-agency collaboration by allowing information sharing between various enforcement bodies. This provision ensures seamless coordination between agencies such as the ED, FIU-IND, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Central Board of Direct Taxes (CBDT) to track illicit financial flows effectively.

Additionally, PMLA has overriding powers over other laws, meaning that if any conflict arises between PMLA and another law, PMLA will prevail in matters related to money laundering investigations.

The enforcement provisions under PMLA are designed to strengthen financial oversight, prevent criminal misuse of economic resources, and ensure national security. The powers granted to ED, FIU-IND, and the Adjudicating Authority provide a robust mechanism to detect, investigate, and prosecute money laundering cases.

The ability to attach and confiscate proceeds of crime, even outside India, aligns India's legal framework with global anti-money laundering standards set by the Financial Action Task Force (FATF).

Additionally, the stringent obligations imposed on banks, financial institutions, and intermediaries ensure a high level of compliance with anti-money laundering regulations.

By integrating domestic enforcement with international cooperation, PMLA ensures that money laundering offenses are effectively tracked, investigated, and prosecuted, making it one of the most comprehensive financial crime laws in India.

Footnotes

1 (2015) SCC OnLine Del 4521

2 (2022) SCC OnLine SC 929

3 (2011) SCC OnLine AP 152

4 (2022) SCC OnLine SC 789

5 [2017] 13 S.C.R. 156

6 [2017] 12 S.C.R. 358

7 [2022] 6 S.C.R. 382

8 2000 INSC 326

9 (1970)72BOMLR787

10 Supra

11 Supra

12 Supra

13 MANU/AP/0125/2011

14 2018 SCC OnLine Del 6253

15 Supra

16 AIR2016SC106

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