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| Origin of PMLA |
UN Convention Against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances, 1988 to which India is a party, calls for prevention of
laundering to proceeds of drug crimes and other connected activities and
confiscation of proceeds derived from such offence.
The Basle Statement of Principles, (Switzerland) enunciated in
1989, outlined basic policies and procedures that banks should follow to assist
the law enforcement agencies in tackling the problem of money laundering.
Financial Action Task Force (FATF) established in Paris in 1989 and made 40 Recommendations
to combat money laundering. The recommendations were classified as under
various heads
(i)
Declaring
laundered money carried through serious offence a criminal offence;
(ii)
Modalities
disclosed by financial institutions regarding reportable transactions;
(iii)
Confiscations
of the proceeds of crime;
(iv)
Money
laundering to be an extraditable offence, and
(v)
Promote
international co-operation in investigation on money-laundering.
Political Declaration adopted by UN General Assembly
by its Resolution No. S-17/2 on 23.02.1990 which calls
upon the member States to develop mechanism to prevent financial institutions
from being used for laundering of drug related money and enactment of
legislation to prevent such laundering.
The International Federation of Accountants
(IFAC) classifies money laundering activities in three stages;
(i)
Placement;
(ii)
Layering;
(iii)
Integration.
Powers of Investigating Officers
(i)
Section 2
(na): investigation
(ii)
Power to
attach property [Section 5]
(iii)
Power of
Survey [S. 16]
(iv)
Power to
Search and Seizure [S. 17]
(v)
Power of
Freezing [S. 17 (1A)]
(vi)
Power to
Search Persons [S. 18]
(vii)
Power to
Arrest [S. 19]
(viii) Power to summon, production of documents and give
evidence [S. 11 & 50]
(ix)
Power of
retention of property and records [Ss. 20 & 21]
Attachment
and confirmation
(i)
Section 5
·
Provisional Attachment of property involved
in money –laundering;
·
filing of complaint based on material in
possession, reason to believe are to be recorded in writing
(ii)
Section 8(3)
·
Confirmation of attachment by the
Adjudicating Authority.
·
Confiscation
or release of property.
(iii)
Section 8(5)
·
Confiscation of property by Special
Court on conclusion of a trial, if involved in money laundering.
Prosecution
(i)
Special Courts (section 43)
(ii)
Offence triable by Special Courts
(iii)
Session Trial in accordance with the
provisions of CrPC
(iv)
Section 65 – CrPC to apply if it is not
inconsistent with the provisions of PMLA
(v)
Section 71 – PMLA to have overriding
effecting.
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