The Despotic Nature of PMLA
Prevention of Money Laundering Act:
- It forms the core of the legal framework put in place by India to combat Money Laundering.
- The provisions of this act are applicable to all financial institutions, banks (Including RBI), mutual funds, insurance companies, and their financial intermediaries.
| PMLA (Amendment) Act, 2012:
Adds the concept of ‘reporting entity’ which would include a banking company, financial institution, intermediary etc. PMLA, 2002 levied a fine up to Rs 5 lakh, but the amendment act has removed this upper limit. It has provided for provisional attachment and confiscation of property of any person involved in such activities. |
Recent cases:
- Arresting CM of Punjab ahead of Punjab polls
- Raiding residence and offices of activist EG: Harsh Mander
Issues:
- PMLA is pulled into the investigation of even “ordinary” crimes and assets of genuine victims have been attached.
- PMLA was a comprehensive penal statute to counter the threat of money laundering, specifically stemming from trade in narcotics.
- Currently, the offences in the schedule of the Act are extremely overbroad, and in several cases, have absolutely no relation to either narcotics or organised crime.
- Even the Enforcement Case Information Report (ECIR) – an equivalent of the FIR – is considered an “internal document” and not given to the accused. The ED treats itself as an exception to these principles.
- There is also a lack of clarity about ED’s selection of cases to investigate. The initiation of an investigation by the ED has consequences which have the potential of curtailing the liberty of an individual.
- PMLA does not distinguish between an accused and witness while summoning them.
Conclusion:
While PMLA is important in current situations, it should be guided by rule of law.
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