Prevention of Money Laundering Act

Provisions under Prevention of Money Laundering Act to Combat Financial Crimes

The Prevention of Money Laundering Act (PMLA) in India contains several provisions to combat financial crimes, especially money laundering and related activities. Some of the key provisions under the PMLA are as follows:

Money Laundering Offense (Section 3)

The Act defines the offense of money laundering and makes it a punishable offense. It criminalizes the acquisition, possession, projection, concealment, and use of the proceeds of crime.

Predicate Offenses (Section 2(1)(u))

The Act identifies certain offenses as "predicate offenses," which generate proceeds that can be subjected to money laundering. Predicate offenses include offenses listed in the Schedule to the PMLA, such as terrorism, drug trafficking, human trafficking, corruption, arms smuggling, and various other serious crimes.

Attachment and Confiscation (Section 5)

The Enforcement Directorate, empowered by the PMLA, can attach and confiscate properties and proceeds derived from money laundering or involved in money laundering activities. This provision acts as a deterrent against money laundering.

Prohibition to Deal with Property Involved in Money Laundering (Section 8)

Once a property is provisionally attached, no person can deal with such property unless authorized by the Adjudicating Authority or the Appellate Tribunal.

Reporting Entities (Section 12)

The Act imposes certain reporting obligations on various entities, including banks, financial institutions, and designated non-financial businesses and professions (DNFBPs) such as real estate agents, jeweller’s, and lawyers. They are required to maintain records and report suspicious transactions to the Financial Intelligence Unit (FIU) of India.

Cybersecurity and Data Protection

Strengthen cybersecurity measures to protect financial institutions and customers from cyber threats and data breaches. Cybersecurity awareness training and robust data protection protocols are essential.

Know Your Customer (KYC) and Record-Keeping (Section 12A)

Reporting entities are mandated to conduct customer due diligence (CDD) and maintain records of transactions. This helps in identifying the beneficial owner and tracing the source of funds.

Retention of Records (Section 12B)

Reporting entities are required to retain records of transactions for ten years.

Powers of the Director (Section 17)

The Director of the Enforcement Directorate has powers to conduct investigations, summon persons, and examine them under oath.

Punishments (Section 4)

The Act prescribes stringent punishments for those found guilty of money laundering. It includes imprisonment and fines.

International Cooperation (Section 57)

The PMLA enables India to cooperate with foreign countries in the investigation and prosecution of money laundering and related offenses.

Collectively Empower Law

These provisions collectively empower law enforcement agencies to investigate and prosecute individuals and entities involved in money laundering and related financial crimes, thus helping to protect the integrity of India's financial system and prevent illicit funds from circulating within the economy.

OUR SERVICES

Legal Consultation
and Advice

Our lawyers specializing in PMLA matters offer legal consultation and advice to individuals, businesses, and organizations who may be at risk of facing money laundering allegations. They explain the provisions of the PMLA, assess the specific situation, and provide guidance on the best course of action.

Representation in Investigations

If a person or entity becomes the subject of a PMLA investigation, our lawyer can represent them before the appropriate authorities, such as the Directorate of Enforcement. They can interact with investigators on behalf of the client and ensure their rights are protected throughout the investigation process.

Defending in Court Proceedings

In cases where charges are brought under the PMLA, our lawyers represent the accused in court. They prepare the defense strategy, cross-examine witnesses, present evidence, and argue before the court to challenge the prosecution's case.

Challenging Provisional Attachments

If the Enforcement Directorate provisionally attaches properties or assets suspected to be involved in money laundering, our lawyers can challenge the attachment before the Adjudicating Authority or the Appellate Tribunal. They can present arguments to establish that the attachment is not justified or that the properties are not linked to money laundering.

Adjudication Proceedings

Our lawyers can represent clients during adjudication proceedings conducted by the Adjudicating Authority under the PMLA. They present evidence and arguments to show that the alleged offense of money laundering has not been committed or that the penalties sought are not warranted.

Appeals

In case of an adverse decision by the Adjudicating Authority, our lawyers can file appeals before the Appellate Tribunal or higher courts on behalf of their clients. They argue the case and seek a favourable outcome.

Settlements

Our lawyers will also assist clients in exploring settlement options with the authorities. This could involve negotiating a settlement agreement to resolve the case without a full-fledged trial.

Compliance and Due Diligence

Our lawyers can advise businesses and organizations on implementing robust anti-money laundering (AML) compliance programs to prevent inadvertent violations of the PMLA. They may conduct due diligence exercises to identify and address any potential risks of money laundering.

International Cooperation

In cases with cross-border implications, our lawyers can assist in matters related to international cooperation and mutual legal assistance with foreign jurisdictions.