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Prevention of Money Laundering Act: New and strengthened

In July 2019, the government widened the definition of ‘proceeds of crime’ in the form of amendments to the Finance Bill, 2019.

Written by Kaunain Sheriff M | Updated: September 8, 2019 4:32:50 am
Money Laundering act, PMLA act, prevention of money laundering act, Aircel Maxis case, PMLA ED, Indian Express Government also deleted provisions related to search and seizure in the PMLA, doing away with the pre-requisite of an FIR or chargesheet by other agencies authorised to probe the offences listed in the PMLA. (Representational image)

In the backdrop of legal setbacks in high-profile corruption cases like 2G spectrum scam and Aircel-Maxis deal, the government had strengthened the Prevention of Money Laundering Act (PMLA) in July this year.

In December 2017, Special Judge O P Saini of a Delhi special court had acquitted all accused in the CBI’s 2G case and discharged those in the Aircel-Maxis case. As the predicate offence (the offence that is part of a larger offence) fell, Saini had simply dismissed the ED’s money laundering investigations. The ED had challenged this in the High Court, and sought that the law be amended to let money laundering be free of predicate offences.

In July 2019, the government widened the definition of ‘proceeds of crime’ in the form of amendments to the Finance Bill, 2019.

The ramification of the definition was two-fold. First, the ED could now prosecute persons or entities, even if the ‘proceeds of crime’ were not under the PMLA. This meant ‘proceeds of crime’ were no more a standalone crime under the PMLA and assets created through any criminal activity were treated as ‘proceeds of crime’.

More importantly, the government also deleted provisions related to search and seizure in the PMLA, doing away with the pre-requisite of an FIR or chargesheet by other agencies authorised to probe the offences listed in the PMLA.

The other amendment related to the insertion of an explanation in Section 44 of the PMLA. “A new proviso is being added to only make sure that where a case exists in one court and hearings are going on there, and where in a different court there could be proceedings happening, this cannot be clubbed together and treated as one,” the Bill said.

This meant proceedings initiated by the IT against Shivakumar, for example, would be treated separately from the money laundering case under the PMLA.

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