Mumbai, Oct 23: The government is likely to drop the controversial clause of ``falsification of accounts'' in the Prevention of Money Laundering Bill 1998, following various representations from the corporate sector. This was indicated by Prithviraj Chavan, member, standing committee on finance at a seminar organised by Confederation of Indian Industry (CII) on foreign exchange management and money laundering.If this clause were retained in the Bill all corporates would have been open to harassment by the investigative agencies as falsification of accounts can also related to relatively minor lapses in accounts.Members of the standing committee Chavan and T Subbarami Reddy said that several aspects of the recently introduced Foreign Exchange Management Bill and the Prevention of Money Laundering Bill need to be fine tuned.This has a gaping lacuna as it can put innocent people behind bars who come in touch with money that has been unlawfully acquired, experts noted Under the Money Laundering Billin its present state if a doctor or a lawyer or a chartered accountant or any agency receives money which has been acquired through unlawful means, the onus comes on the receiver of these proceeds to prove that he is not guilty, Amit Desai, lawyer said at the seminar.Speaking at the seminar S S Bhalla, economist said is an absolutely reprehensible and offensive bill. It will not benefit anybody for no body stands to gain by the law, it is only the vicious part of the law that stands to gain.Clause 3 of the Bill defines the offence of money laundering as whosoever acquires, owns, possesses or transfers any proceeds of the crime or enters into any transaction which is related to proceeds of crime either directly or indirectly or connives or aids in the concealment of the proceeds of crime commits the offence of money laundering.According to Desai the words willfully or knowingly are not used anywhere in the definition. Mens rea, which is an essential ingredient of criminal jurisprudence is missing, hesaid. There has to be some nexus between the transaction and the crime itself. This should not mean that when you sell property you will have to inquire into the antecedents of the money you receive as consideration, he explained.CII has suggested that the terms ``knowingly and willfully'' should be inserted before the word ``acquires'' and the word ``directly'' be substituted for the words ``either directly or indirectly.'' Simultaneously clause 23 which presumes culpable mental state should be deleted.According to Desai it is also unfair for the government to confiscate the proceeds because in some cases the money could have been extorted from an innocent person. hence the Bill needs to have a clause for restitution of confiscated wealth.While industry has been clamouring for dismissing most pending FERA violation cases once FEMA comes into being - FERA, they have argued is an outdated and draconian law - there was a difference of opinion between the members of the standing committee on finance.While Subbarami Reddy felt that FEMA should be retrospective in nature, Prithviraj Chavan felt that this was not feasible under the law. In any case, he pointed out, a blanket dismissing of all cases would also ensure that genuine violation cases would also be closed. Arun Bharat Ram, chairman for CII's northern region pointed out that some via media could be found. He said where show causes have not even been issued could perhaps be brought under the ambit of FEMA. On the need for replacing FERA with FEMA, Reddy was of the opinion that FERA had led to a lot of misuse and industry had been harassed. Almost 16,000 cases were registered but only 73 were convicted, he added.
