Prevention of Money Laundering Act, 2002 (PMLA)
About
The Prevention of Money Laundering Act, 2002 (PMLA) is India's primary legislation to combat money laundering by enabling confiscation of assets derived from criminal proceeds.​
Key Objectives
- PMLA aims to prevent money laundering, seize tainted property, penalize offenders, and impose record-keeping duties on banks and financial institutions.
- It enforces obligations on reporting entities to verify client identities and report suspicious transactions to FIU-IND.​
Core Provisions
- Offence Definition (Section 3): Involves processes like concealment, possession, or use of proceeds from scheduled crimes, including indirect assistance.​
- Punishment (Section 4): Rigorous imprisonment of 3-7 years (up to 10 years for narcotics-related cases) plus fines; offences are cognizable and non-bailable.​
- Attachment and Confiscation (Sections 5, 8): Enforcement Directorate (ED) can provisionally attach properties linked to laundering, confirmed by an Adjudicating Authority.​
Enforcement Powers
- ED and FIU-IND hold summoning rights (Section 50), inspection, and evidence collection powers, with PMLA overriding conflicting laws (Section 71).
- Scheduled offences from acts like NDPS, IPC, or FEMA trigger PMLA application.​
Judicial Insights
- Supreme Court in Vijay Madanlal Choudhary v. Union of India upheld PMLA's stringency, affirming standalone money laundering offences and twin bail conditions under Section 45.
- Enacted under Article 253 for international compliance, it came into force on July 1, 2005.
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