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PREVENTION OF MONEY LAUNDERING ACT 2002 (PMLA)

PREVENTION OF MONEY LAUNDERING ACT 2002 (PMLA)

  • The Prevention of Money Laundering Act, 2002 (PMLA) forms the core of the legal framework put in place by India to combat money laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005.
  • The PMLA and rules notified there-under impose obligation on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to Financial Intelligence Unit-India (FIU-IND).
  • PMLA defines money laundering offence and provides for the freezing, seizure and confiscation of   the proceeds of crime.

PROVISIONS OF PREVENTION OF MONEY LAUNDERING (AMENDMENT) ACT, 2012

  • This Act amended the erstwhile Prevention of Money Laundering Act, 2002.
  • The act introduces the concept of ‘corresponding law’ to link the provisions of Indian law with the laws of foreign countries.
  • It also adds the concept of ‘reporting entity’ which would include a banking company, financial institution, intermediary or a person carrying on a designated business or profession.
  • It expands the definition of offence under money laundering to include activities like concealment, acquisition, possession and use of proceeds of crime.
  • The Prevention of Money Laundering Act, 2002 levies a fine up to Rs five lakh. This amendment removes this upper limit.                                PREVENTION OF MONEY LAUNDERING ACT 2002 (PMLA)
  • The act provides for provisional attachment and confiscation of property of any person. This power may be exercised by the authority if it has reason to believe that the offence of money laundering has taken place.
  • It provides for appeal against the orders of the Appellate Tribunal directly to the Supreme Court within 60 days from the communication of the decision or order of the Appellate Tribunal.
  • The Act brings all the offences under Part A of the Schedule to ensure that the monetary thresholds do not apply to the offence of money laundering. Earlier, Part B of the Schedule in the Act included only those crimes that are above Rs 30 lakh or more whereas Part A did not specify any monetary limit of the offence.

ALSO READ :https://www.brainyias.com/process-and-prevention-of-money-laundering-in-india/

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