PMLA-2002- A REVIEW

The Prevention of Money Laundering Act

SARASIJ MAJUMDER

The Prevention of Money Laundering Act (PMLA) is a critical law in India. PMLA was passed under the Vajpayee government and notified under the UPA after pressure was mounted by FATF. 

Its sole purpose is to fight against money laundering activities. The law provides a complete legal framework for preventing and punishing financial crimes that involve money laundering. The law marked a significant egal control in India. It establishes India's commitment to global efforts against economic crimes. It was in line with the standards of the Financial Action Task Force (FATF). The FATF is an inter-governmental body. Its purpose is to combat money laundering worldwide.

The Judicial Custody of Mr. Kejriwal under the Prevention of Money Laundering Act (PMLA) is a nuanced and complex issue, with various opinions surrounding it. From a legal and regulatory point of view, there are reasons to use PMLA in cases like this. It's important to know that the following reasons are to help understand the legal side of the case.

Preventing Financial Crimes

  • Deterrence Against Money Laundering:
    The main purpose of the PMLA is to fight against money laundering and illegal money transactions. Using this law in cases with politically powerful people like Kejriwal delivers a strong warning  by the STATE against using power to make money wrongly, and use it for wrong purpose. This acts as a warning to others.

Upholding Regulatory Standards

  • Regulatory Compliance:
    The use of PMLA rules makes sure that everyone, no matter how powerful or influential he may be, has to follow the same financial rules and be responsible for their actions. It establishes the principle that no one is above the law, promoting a culture of transparency and legal compliance.

Protecting Economic Integrity

  • Safeguarding Economic Stability:
    Money laundering damages the country's finances. It causes financial instability. Authorities investigate and arrest suspects to stop, and prevent this. They aim to keep the economy stable and safe for every citizen.

International Obligations

  • Fulfilling Global Commitments:
    Many countries, including India, are part of international agreements to fight corruption and money laundering, such as the Financial Action Task Force (FATF) standards. Taking decisive legal action demonstrates a commitment to these global standards, which is crucial for maintaining international economic relations and trust.

Investigating Agency

·         Enforcement Directorate is only entrusted with the authority for investigations of people / Companies suspected to have committed this Offence.

Responsibility of the accused

·         Unlike other provisions—here the accused has to prove that he is innocent. The accused can’t get  the protection of BAIL.

Punishment

·         Offence of money-laundering is punishable with rigorous imprisonment for a period of not less than three years but may extend to seven years and with fine up to five lakh rupees. Property can be confiscated.

References:-

1.0 https://dea.gov.in/sites/default/files/moneylaunderingact.pdf

2.0 https://www.dor.gov.in/sites/default/files/The%20Prevention%20of%20Money-laundering%20Act%2C%202002.pdf

3.0 https://fiuindia.gov.in/files/AML_Legislation/pmla_2002.html

4.0 https://enforcementdirectorate.gov.in/pmla

5.0https://www.indiacode.nic.in/bitstream/123456789/15402/1/moneylaunderingact2002.pdf

6.0 Image:- Google

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