FM rules out diluting MLP Bill

Sinha said the only major objection to the MLP from the trade and industry pertained to the clause on “falsification of accounts”. This was now before the parliamentary standing committee on finance, he said adding, “I am looking forward to their recommendations.”

Sinha was responding to objections from chambers of commerce regarding the clubbing of economic offences like falsification of accounts with more serious ones like drug trafficking and illegal arms trade in the Money Laundering Prevention Bill. The Finance Minister hoped the twin legislations on money laundering prevention and foreign exchange management would bepassed in the winter session of Parliament.

“I am quite confident we will be able to take it up in the winter session of Parliament,” he said.

The Finance Minister said that the BJP government had succeeded in introducing these bills in Parliament showing its commitment to reforms. We have debunked the myth that we are anti reformist, he said. Sinha said his government was determined to push ahead with further reforms.

Major chambers of commerce and industry had expressed serious concern about the provisions of the MLP Bill, especially one which made falsification of accounts a criminal offence.

The CII, Ficci, Assocham and PHDCCI felt there was no need to place falsification of accounts under section 477 of the IPC and make it a criminal offence. The chambers felt that it was not proper to club these offences along with the criminal offences of drug trafficking, and illegal arms trade.

CII particularly had said that while falsification of accounts was certainly a serious issue, it could not betreated on par with crimes under other laws like the Narcotic Traffic Control Act.

Ficci expressed distress that powers vested in officers by the money laundering bill would enable them to arrest people merely on suspicion and attach their property. The onus of the proof should lie with the prosecuting agencies, its past president K K Modi said.

Assocham president L Lakshman said that the provision regarding falsification of accounts had to be corrected. The PHDCCI chief O P Vaish said that the money laundering bill contained some `draconian’ and `arbitrary’ powers which could be misused and could lead to harassment.

For instance the powers to search and seize documents, attachment of property and non-availability clause with imprisonment upto six months, apart from the accused having to prove their innocence could be misused. It could lead to harassment as was the case under FERA, he said.

The FEMA and MLP bills seek to liberalise the foreign exchange regime in step with the government’s plans toswitch over to capital account convertibility and remove all outdated draconian provisions in the Foreign Exchange Regulation Act (FERA).

The FEMA, unlike the FERA repeals, brings all foreign exchange violations under the civil laws inviting only monetary penalties. The FERA recognises these violations as criminal offences. The MLP Bill seeks to tackle the crime of laundering black money abroad making the crime cognizable and a non-bailable one. It also seeks to create a separate regulatory authority to track the offenders and punish them.