Q1. What is PMLA?
PMLA refers to the
Prevention of Money Laundering Act, 2002.
Q2. When did the Prevention of Money Laundering Act,
2002 come into force?
The Prevention of Money
Laundering Act, 2002 came into force with effect from 1st July, 2005. The Act was
amended by the Prevention of Money Laundering (Amendment) Act 2009 w.e.f.
01.06.2009. The Act was further amended by the Prevention of Money-Laundering
(Amendment) Act, 2012 w.e.f. 15-02-2013.
Q3. Does the Act extend to the whole of India?
Yes, it extends to the
whole of India including the state of Jammu & Kashmir.
Q4. What is the object
of Prevention of Money Laundering Act, 2002?
As stated in the Preamble
to the Act, it is an Act to prevent money-laundering and to provide for
confiscation of property derived from, or involved in, money-laundering and to
punish those who commit the offence of money laundering.
The Directorate of
Enforcement in the Department of Revenue, Ministry of Finance is responsible
for investigating the cases of offence of money laundering under Prevention of
Money Laundering Act, 2002.
Financial Intelligence Unit
- India (FIU-IND) under the Department of Revenue, Ministry of Finance is the
central national agency responsible for receiving, processing, analyzing and
disseminating information relating to suspect financial transactions to
enforcement agencies and foreign FIUs.
Q.6. What is Money Laundering?
The goal of a large number
of criminal activities is to generate profit for an individual or a group.
Money laundering is the processing of these criminal proceeds to disguise their
illegal origin.
Illegal arms sales,
smuggling, and other organized crime, including drug trafficking and
prostitution rings, can generate huge amounts of money. Embezzlement, insider
trading, bribery and computer fraud schemes can also produce large profits and
create the incentive to “legitimize” the ill-gotten gains through money
laundering. The money so generated is tainted and is in the nature of ‘dirty
money’. Money Laundering is the process of conversion of such proceeds of
crime, the ‘dirty money’, to make it appear as ‘legitimate’ money.
In the PMLA, 2002, money
laundering has been defined as “any process or activity connected with proceeds
of crime including its concealment, possession, acquisition or use and
projecting or claiming it as untainted property”.
The process of Money
Laundering generally involve the following three stages :
(a)
Placement:- The Money Launderer, who is holding the
money generated from criminal activities, introduces the illegal funds into the
financial systems. This might be done by breaking up large amount of cash into
less conspicuous smaller sums which are deposited directly into a Bank Account
or by purchasing a series of instruments such as Cheques, Bank Drafts etc.,
which are then collected and deposited into one or more accounts at another
location.
(b)
Layering:- The second stage of Money Laundering is
layering. In this stage, the Money Launderer typically engages in a series of
continuous conversions or movements of funds, within the financial or banking
system by way of numerous accounts, so as to hide their true origin and to
distance them from their criminal source. The Money Launderer may use various
channels for movement of funds, like a series of Bank Accounts, sometimes
spread across the globe, especially in those jurisdictions which do not co–
operate in anti Money Laundering investigations.
(c)
Integration:- Having successfully processed his criminal
profits through the first two stages of Money Laundering, the Launderer then
moves to this third stage in which the funds reach the legitimate economy,
after getting inseparably mixed with the legitimate money earned through legal
sources of income. The Money Launderer might then choose to invest the funds
into real estate, business ventures & luxury assets, etc.
The above three
steps may not always follow each other. At times, illegal money may be mixed
with legitimate money, even prior to placement in the financial system. In
certain cash rich businesses, like Casinos (Gambling) and Real Estate, the
proceeds of crime may be invested without entering the mainstream financial
system at all.
Q.8.
What has been the international response to tackle Money Laundering?
In response to
mounting concern over money laundering, the Financial Action Task Force (FATF)
on Money Laundering was established by the G-7 Summit in Paris in 1989 to
develop a co-ordinated international response. One of the first tasks of the
FATF was to develop Recommendations, which set out the measures national
governments should take to implement effective anti-money laundering
programmes. India is an active member of the FATF.
Q.9.
What steps have been taken by the Government of India to tackle the menace of
Money Laundering?
Government of
India is committed to tackle the menace of Money Laundering and has always been
part of the global efforts in this direction. India is signatory to the
following UN Conventions, which deal with Anti Money Laundering / Countering
the Financing of Terrorism :
1.
International Convention for the Suppression of the Financing of
Terrorism (1999);
2.
UN Convention against Transnational Organized Crime (2000); and
In pursuance to the
political Declaration adopted by the special session of the United Nations
General Assembly (UNGASS) held on 8th to 10th June 1998 (of which India is one of the
signatories) calling upon member States to adopt Anti Money Laundering
Legislation & Programme, the Parliament has enacted a special law called
the ‘Prevention of Money Laundering Act, 2002’ (PMLA 2002). This Act has been
substantially amended, by way of enlarging its scope, in 2009 (w.e.f.
01.06.2009), by enactment of Prevention of Money Laundering (Amendment) Act,
2009. The Act was further amended by Prevention of Money-Laundering (Amendment)
Act, 2012 w.e.f. 15-02-2013.
Q10. What is the offence of Money Laundering?
Whosoever directly or
indirectly attempts to indulge or knowingly assists or knowingly is a party or
is actually involved in any process or activity connected with the proceeds of
crime including its concealment, possession, acquisition or use and projecting
or claiming it as untainted property shall be guilty of offence of money laundering
(Section 3).
Q11. What are proceeds of crime?
“Proceeds of crime” means
any property derived or obtained, directly or indirectly, by any person as a
result of criminal activity relating to a scheduled offence or the value of any
such property [Section 2(1)(u)].
Q12. What is a ‘scheduled offence’?
The offences listed in the
Schedule to the Prevention of Money Laundering Act, 2002 are scheduled offences
in
terms of Section 2(1)(y) of the Act. The scheduled offences are divided into
two parts - Part A & Part C.
In part A, offences to the
Schedule have been listed in 28 paragraphs and it comprises of offences under
Indian Penal Code, offences under Narcotic Drugs and Psychotropic Substances,
offences under Explosive Substances Act, offences under Unlawful Activities
(Prevention) Act, offences under Arms Act, offences under Wild Life
(Protection) Act, offences under the Immoral Traffic (Prevention) Act, offences
under the Prevention of Corruption Act, offences under the Explosives Act, offences
under Antiquities & Arts Treasures Act etc.
Part ‘C’ deals with
trans-border crimes, and is a vital step in tackling Money Laundering across
International Boundaries.
Prior to 15th February, 2013, i.e., the
date of notification of the amendments carried out in PMLA, the Schedule also
had Part B for scheduled offences where the monetary threshold of rupees thirty
lakhs was relevant for initiating investigations for the offence of money
laundering. However, all these scheduled offences, hitherto in Part B of the
Schedule, have now been included in Part A of Schedule w.e.f
15. 02.2013. Consequently,
there is no monetary threshold to initiate investigations under PMLA.
Q13. What is a Predicate Offence?
Every Scheduled Offence is
a Predicate Offence. The Scheduled Offence is called Predicate Offence and the
occurrence of the same is a pre requisite for initiating investigation into the
offence of money laundering.
(a)
Indian
Penal Code, 1860;
(b)
NDPS Act,
1985;
(c)
Unlawful
Activities (Prevention ) Act, 1967;
(d)
Prevention
of Corruption Act, 1988;
(e)
Customs
Act, 1962;
(f)
SEBI
Act, 1992;
(g)
Copyright
Act, 1957;
(h)
Trade
Marks Act, 1999;
(i)
Information
Technology Act, 2000;
(j)
Explosive
Substances Act, 1908;
(k)
Wild
Life (Protection) Act, 1972;
(l)
Passport
Act, 1967;
(m)
Environment
Protection Act, 1986;
(n)
Arms
Act, 1959.
Various Acts covered in the
Schedule to PMLA are given in Annexure-A.
Q15. Who investigates Predicate/Scheduled Offences?
Predicate Offences are
investigated by agencies such as Police, Customs, SEBI, NCB and CBI, etc. under
their respective Acts.
Q16. Who can investigate a case of Money Laundering ?
As per Sections 48 & 49
of the PMLA, the officers of the Directorate of Enforcement have been given
powers to investigate cases of Money Laundering. The officers have also been
authorised to initiate proceedings for attachment of property and to launch
prosecution in the designated Special Court for the offence of money
laundering.
Q17. What are the possible actions
which can be taken against persons / properties involved in Money Laundering?
Following actions can be
taken against the persons involved in Money Laundering:-
(a)
Attachment of property under Section 5, seizure/ freezing of property
and records under Section 17 or Section 18. Property also includes property of
any kind used in the commission of an offence under PMLA, 2002 or any of the
scheduled offences.
(b)
Persons found guilty of an offence of Money Laundering are punishable
with imprisonment for a term which shall not be less than three years but may
extend up to seven years and shall also be liable to fine [Section 4].
(c)
When the scheduled offence committed is under the Narcotics and
Psychotropic substances Act, 1985 the punishment shall be imprisonment for a
term which shall not be less than three years but which may extend up to ten
years and shall also be liable to fine.
(d)
The prosecution or conviction of any legal juridical person is not
contingent on the prosecution or conviction of any individual.
Q18.
What are the powers available to the Investigating Officers under the Act?
The Investigating Officers have the powers:-
(a)
to provisionally attach any property derived or obtained, directly or
indirectly, by any person as
a
result of criminal activity relating to a scheduled offence or the value of any
such property [Section 5];
(b)
to
conduct survey of a place [Section 16];
(c)
to conduct search of building, place, vessel, vehicle or aircraft &
seize/freeze records & property [Section 17];
(d)
to
conduct personal search [Section 18];
(e)
to arrest persons accused of committing the offence of Money Laundering [Section 19];
(f)
to summon and record the statements of persons concerned [Section 50].
Q19. What are the powers of authority during survey?
An authority during the survey may—
(i)
place marks of identification on the records inspected by him and make
or cause to be made extracts or copies therefrom;
(ii)
make an inventory of any property checked or verified by him; and
(iii)
record the statement of any person present in the place which may be
useful for, or relevant to, any proceeding under this Act [Section 16].
Q20.
What are the powers of officers / authority during search and seizure?
Authorised officer may —
(a)
enter and search any building, place, vessel, vehicle or aircraft where
he has reason to suspect that such records or proceeds of crime are kept;
(b)
break open the lock of any door, box, locker, safe, almirah or other
receptacle where the keys thereof are not available;
(d)
place marks of identification on such record or properties if required
or make or cause to be made extracts or copies therefrom;
(e)
make a note or an inventory of such record or property;
(f)
examine on oath any person, who is found to be in possession or control
of any record or property, in respect of all matters relevant for the purposes
of any investigation under this Act; and
(g)
where it is not practicable to seize such record or property, the
officer authorized may make an order to freeze such property, whereupon the
property shall not be transferred or otherwise dealt with, except with the
prior permission of the officer making such order [Section
17].
Q21. What is the time limit for retention of records or
property seized during search & seizure? What is the time limit for
continuation of the order of freezing of property/records frozen during search
and seizure?
The property /
record may, if seized be retained or if frozen may continue to remain frozen
for a period not exceeding 180 days from the day on which such property or
record were seized or frozen, unless the Adjudicating Authority under PMLA
permits retention of such record or property beyond the period of 180 days [Sections 20 & 21].
Q22.
What are the rights of persons being searched during search?
(i)
Where an authority is about to search any person, he shall, if such
person so requires, take
such
person within twenty-four hours to the nearest Gazetted Officer, superior in
rank to him, or a Magistrate.
(ii)
If the requisition is made, the authority shall not detain the person
for more than twenty-four hours prior to taking him before the Gazetted
Officer, superior in rank to him, or the Magistrate referred to in that
sub-section.
(iii)
The Gazetted Officer or the Magistrate before whom any such person is
brought shall, if he sees no reasonable ground for search, forthwith discharge
such person but otherwise shall direct that search be made.
(iv)
Search shall be made in the presence of two or more persons.
(v)
No female shall be searched by any one except a female [Section 18].
Q23. What are the rights of persons during arrest?
(i)
The Authorized Officer making arrest shall, as soon as may be, inform
the arrestee of the grounds for such arrest.
(ii)
Every person so arrested shall, within twenty-four hours, be taken to a
Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having
jurisdiction [Section 19].
Q24. What are the powers of Authorities regarding issuing
summons, enforcing production of documents and to give evidence etc.?
(i)
The Director, Additional Director, Joint Director, Deputy Director or
Assistant Director of the Directorate of Enforcement have the power to summon
any person whose attendance he considers necessary whether to give evidence or
to produce any records during the course of
(ii)
All the persons so summoned are bound to attend in person or through
authorised agents, as such officer may direct, and are bound to state the truth
upon any subject respecting which they are examined or make statements, and
produce such documents as may be required.
(iii)
Such proceedings are deemed to be judicial proceedings within the
meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860) [Section 50].
Q25. What is the time limit for retention of record
impounded during the proceedings conducted under the PMLA, 2002?
Authorities
empowered to issue summons may impound and retain in his custody for such
period, as he thinks fit, any records produced before him in any proceedings
under this Act :
Provided that
an Assistant Director or a Deputy Director cannot—
(a)
impound any records without recording his reasons for so doing; or
(b)
retain in his custody any such records for a period exceeding three months,
without obtaining the previous approval of the Director [Section 50].
Q26.
What are the presumptions in interconnected transactions?
Where money-laundering involves two or more
inter-
connected
transactions and one or more such transactions is proved to be involved in
money-laundering, then for the purposes of adjudication or confiscation or for
the trial offence of money laundering, it shall, unless otherwise proved to the
satisfaction of the Adjudicating Authority or the Special Court, be presumed
that the remaining transactions form part of such inter-connected transactions [Section 23].
Q27. Whether the statement recorded before the
Investigating Officer under PMLA is admissible evidence under the Law?
Yes, the
statement recorded before the Investigating Officer under PMLA is admissible
evidence in the Court as such a proceeding under Section 50(2) and 50(3) of the
Act is a judicial proceeding within the meaning of Section 193 and 228 of IPC.
Q28.
What is burden of proof in any proceedings relating to proceeds of crime under
PMLA, 2002?
(a)
In the case of a person charged with the offence of money-laundering
under section 3, the Authority or Court shall, unless the contrary is proved,
presume that such proceeds of crime are involved in money-laundering; and
(b)
In the case of any other person the Authority or Court, may presume that
such proceeds of crime are involved in money-laundering [Section 24].
Q29.
What is meant by the term “Property” in the Prevention of Money Laundering Act,
2002?
“Property” means any property or assets of every
description,
whether corporeal or incorporeal, movable or immovable, tangible or intangible
and includes deeds and instruments evidencing title to, or interest in, such
property or assets, wherever located. Further, property includes, property of
any kind used in the commission of an offence under this Act or any of the
scheduled offences [Section 2(1)(v)].
Q30. What is “attachment”?
“Attachment” means
prohibition of transfer, conversion, disposition or movement of property by an
order issued under Chapter III of the Act [Section
2(1)(d)].
Q31.
What are the circumstances under which properties can be provisionally attached
under PMLA?
(i)
Where the Director, or any other officer not below the rank of Deputy
Director authorised by the Director has reasons to believe (the reason for such
belief to be recorded in writing), on the basis of material in his possession,
that—
(a)
any person is in possession of any proceeds of crime and
(b)
such proceeds of crime or likely to be concealed, transferred or dealt
with in any manner which may result in frustrating any proceedings relating to
confiscation of such proceeds of crime
he may, by an
order in writing, provisionally attach such property for a period not exceeding
180 days from the date of the order, in such manner as may be prescribed.
(ii)
No such order of attachment shall be made unless, in relation to the
scheduled offence, a report has been forwarded to a Magistrate under section
173 of the Code of Criminal Procedure, 1973, or a complaint has been filed by a
person authorized to investigate the offence mentioned in the Schedule, before
a Magistrate or court for taking cognizance of the scheduled offence, as the
case may be or a similar report or complaint has been made or filed under the
corresponding law of any other country.
(iii)
Further any property of any person may be attached, if the Director or
any other officer not below the rank of Deputy Director authorized by him has
reason to believe (reasons for such belief to be recorded in writing), on the
basis of material in his possession, that if such property involved in money
laundering is not attached immediately the non-attachment of the property is
likely to frustrate any proceedings under this Act [Section
5].
Q32.
How long this order of provisional attachment of property will remain in force?
Every order of
provisional attachment shall cease to have effect after 180 days from the date
of the order, if no order is passed by the Adjudicating Authority under PMLA
that the said property is involved in money-laundering.
However, within
said 180 days, if the Adjudicating Authority, by an order, records a finding
that properties are not involved in money laundering, the order of provisional
attachment shall cease to have
Q33. Whether the persons claiming or entitled to claim any
interest in the enjoyment of immovable property can enjoy the property during
the period of provisional attachment?
Yes. [Section 5(4)]
Q34. What is the remedy available to a aggrieved person,
where the property is provisionally attached?
It has been
provided in the Act that before recording the finding that all or any of the
properties are involved in money laundering, the Adjudicating Authority has to
issue a show cause notice of not less than thirty days to the aggrieved person.
The aggrieved person at this stage can submit his reply and attend the hearing
before the Adjudicating Authority to present his defence [Section 8(1)].
Q35. What will happen if the Adjudicating Authority
records the finding that the all or any of the properties are involved in money
laundering?
Where the
Adjudicating Authority decides that any property is involved in
money-laundering, he shall, by an order in writing, confirm the attachment of
the property. Such attachment shall—
(a)
continue during the pendency of the proceedings relating to any offences
under this Act before a court or under the corresponding law of any other
country, before the competent court of criminal jurisdiction outside India, as
the case may be; and
Q36. What will happen if the Adjudicating Authority
records the finding that all or any of the attached/ seized/ frozen properties
are not involved in money laundering?
In such cases,
the Adjudicating Authority shall direct the release of all properties other
than the properties involved in money-laundering to the person from whom such
properties were seized or the person entitled to receive it [Section 20(5)].
However, the
Director or any other officer authorised by him in this behalf, may withhold
the release of any such property for a period of ninety days if he (Director of
Enforcement) is of the opinion that such property is relevant for the appeal
proceedings under this Act [Section 20(6)].
Q37. What will happen to the seized/frozen records after
confiscation of property involved in money laundering or used for the
commission of the offence of the money laundering under Section 8 of PMLA?
After an order
of confiscation of properties under Section 8 has been passed, the Adjudicating
Authority shall direct the release of the records to the person from whom such
records were seized.
However, the
Director or any other officer authorised by him in this behalf, may withhold
the release of any such record for a period of ninety days if he (Director of
Enforcement) is of the opinion that such property is relevant for the appeal
proceedings under this Act [Section 21(5 & 6)].
Q38. What will happen to the
attached properties after conclusion of Trial for the offence of money
laundering?
(i)
Where on conclusion of a trial of an offence under this Act, the Special
Court finds that the offence of money-laundering has been committed, it shall
order that such property involved in the money-laundering or which has been
used for commission of the offence of money-laundering shall stand confiscated
to the Central Government.
(ii)
Where on conclusion of a trial under this Act, the Special Court finds
that the offence of money-laundering has not taken place or the properties not
involved in money-laundering, it may order release of such property to the
person entitled to receive it.
(iii)
Where the trial under this Act cannot be conducted, by reason of the
death of the accused or the accused having been declared a proclaimed offender
or for any other reason or having commenced but could not be concluded, the
Special Court, on an application moved by the Director or a person claiming to
be entitled to possession of a property in respect of which an order has been
issued by the Adjudicating Authority confirming the provisional attachment of
the property, pass appropriate orders regarding confiscation or release of the
property, as the case may be, after having regard to the material before it [Sub-sections
(5) (6) & (7) of Section 8].
(iv)
After an order of confiscation, all the rights and title in such
property shall vest absolutely in the
Q39. Which is the Appellate Authority against the order
passed by Adjudicating Authority and what is the time limit to file appeal?
The Director or
any person aggrieved by an order made by the Adjudicating Authority under this
Act, may prefer an appeal to the Appellate Tribunal. Appeal has to be filed
within a period of forty-five days from the date of receipt of a copy of the
order made by the Adjudicating Authority. Appellate Tribunal may entertain an
appeal after the expiry of the period of forty-five days if it is satisfied
that there was sufficient cause for not filing it within that period [Section 26].
Q40. Which is the Appellate Authority against the order
passed by Appellate Tribunal and what is the time limit to file appeal?
Any person
aggrieved by any decision or order of the Appellate Tribunal may file an appeal
to the High Court within sixty days from the date of communication of the
decision or order of the Appellate Tribunal to him on any question of law or
fact arising out of such order. Thus appeal can be filed before High Court on
any question of law or fact.
High Court may,
if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be filed within a further
period not exceeding sixty days [Section 42].
Q41. How do you describe the expression, “person”
appearing in the Prevention of Money Laundering Act, 2002?
“Person” includes—
(i)
an
individual,
(ii)
a Hindu
undivided family,
(iii)
a
company,
(iv)
a firm,
(v)
an association of persons or a body of individuals, whether incorporated
or not,
(vi)
every artificial juridical person not falling within any of the
preceding sub-clauses, and
(vii)
any
agency, office or branch owned or controlled
by any of the above
persons mentioned in the preceding sub-clauses.
Thus, besides the natural
person, even legal entities are also covered under the expression “person” as
per the Act [Section 2(1)(s)].
Q42. What is “offence of cross border implication”?
(1)
Any conduct by a person at a place outside India which constitutes an
offence at that place and which would have constituted an offence specified in
Part A or Part C of the Schedule, had it been committed in India and if such
person transfers in any manner the proceeds of such conduct or part thereof to
India; or
(2)
Any offence specified in Part A or Part C of the Schedule which has been
committed in India and the proceeds of crime, or part thereof have been
transferred to a place outside India or any attempt has been made to transfer
the proceeds of crime, or part thereof from India to a place outside India [Section 2(1)(ra)].
OBLIGATIONS OF BANKING COMPANIES,
FINANCIAL INSTITUTIONS AND INTERMEDIARIES
Q43. Who are reporting entities?
“Reporting Entity” means a
banking company, financial institution, intermediary or a person carrying on a
designated business or profession [Section
2(1)(wa)].
Q44.
Who are covered within the expression “Persons carrying on designated business
or profession”?
Persons carrying on Designated Business or
Profession means:-
(i)
a person carrying on activities for playing games of chance for cash or
kind, and includes such activities associated with casino;
(ii)
a Registrar or Sub-Registrar appointed under Section 6 of the
Registration Act, 1908, as may be notified by the Central Government.
(iii)
real estate agent, as may be notified by the Central Government.
(iv)
dealer in precious metals, precious stones and other high value goods,
as may be notified by the Central Government.
(v)
person engaged in safekeeping and administration of cash and liquid
securities on behalf of other persons, as may be notified by the Central
Government; or
(vi)
person carrying on such other activities as the Central Government may,
by notification, so designate, from time to time [Section
2(1)(sa)].
(i)
Every reporting entity have to maintain a record of all transactions
covered as per the nature and value of which may be prescribed, in such manner
as to enable it to reconstruct individual transactions;
(ii)
They shall furnish to the Director (FIU) within such time as may be
prescribed information relating to such transactions, whether attempted or executed,
the nature and value of which may be prescribed;
(iii)
They shall verify the identity of its clients in such manner and subject
to such conditions as may be prescribed;
(iv)
They shall identify the beneficial owner, if any, of such of its
clients, as may be prescribed;
(v)
They shall maintain record of documents evidencing identity of its
clients and beneficial owners as well as account files and business
correspondence relating to its clients for a period of five years in case of
record and information relating to transactions; and
(vi)
They shall maintain the same for a period of five years after the
business relationship between a client and the reporting entity has ended or
the account has been closed, whichever is later [Section
12].
Q46. What are the monetary penalties that can be imposed
on reporting entity for non maintenance of records or non submission of
aforesaid information?
Monetary
penalties can be imposed on defaulting reporting entity or its designated
Director on the Board or any of its employees, which shall not be less
Q47.
Who is the appellate authority against the order passed by Director (FIU)?
Any reporting
entity aggrieved by any order of the Director (FIU) made under sub-section (2)
of section 13, may prefer an appeal to the Appellate Tribunal [Section 26].
SPECIAL COURTS
Q48.
Which Courts are designated as Special Courts under PMLA, 2002?
For trial of offence
punishable under section 4 of PMLA, 2002, the Central Government, in
consultation with the Chief Justice of the respective High Courts, by
notification, has designated one or more Courts of Session as Special Court or
Special Courts for such area or areas or for such case or class or group of
cases as specified in the notifications.
While trying an offence of
money laundering under PMLA,2002, a Special Court has also to try the offences,
with which the accused may, under the Code of Criminal Procedure, 1973 (2 of
1974), be charged at the same trial [Section 43].
Q49.
What are offences triable by special Courts under PMLA, 2002?
Notwithstanding anything
contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence of
money laundering punishable under Section 4 of PMLA, 2002 and any scheduled
offence connected to the offence of money laundering, shall be triable by the
Special Court constituted for the area in which the offence has been committed.
Q50. What will happen if the
Court, which has taken cognizance of the scheduled offence is other than the
Special Courts under PMLA (which has taken cognizance of the complaint of the
offence of money laundering) ?
In such cases,
on an Application by the authority authorized to file a complaint under PMLA,
the trial court (which has taken cognizance of the scheduled offence) shall
commit the case relating to the scheduled offence to the Special Courts under
PMLA. The Special Court, PMLA, on receipt of such case committed to it, shall
proceed to deal with it from the stage at which it is committed [Section 44(1)(c)].
Q51.
Which is the Appellate Authority against the order passed by Special Court?
The High Court
may exercise, so far as may be applicable, all the powers conferred by Chapter
XXIX or Chapter XXX of the Code of Criminal Procedure, 1973 (2 of 1974), on a
High Court, as if a Special Court within the local limits of the jurisdiction
of the High Court were a Court of Session trying cases within the local limits
of the jurisdiction of the High Court [Section 47].
RECIPROCAL ARRANGEMENT FOR
ASSISTANCE IN CERTAIN MATTERS AND PROCEDURE FOR ATTACHMENT AND CONFISCATION OF
PROPERTY
Q52. What is meant by the term “Contracting State”?
“Contracting State” means
any country or place outside India in respect of which arrangements have been
made by the Central Government with the Government of such country through a
treaty or otherwise [Section 55].
Q53. What is the mechanism to obtain evidence required in
connection with investigation into an offence or proceedings under the Act if
such evidence may be available in any place in a contracting State?
An application is to be
made to a Special Court by the Investigating Officer or any officer superior in
rank to the Investigating Officer and the Special Court, on being satisfied,
may issue a Letter of Request to a court or an authority in the contracting
State competent to deal with such request to—
(i)
examine
facts and circumstances of the case,
(ii)
take such steps as the Special Court may specify in such letter of
request, and
(iii)
forward all the evidence so taken or collected to the Special Court
issuing such letter of request.
Every
statement recorded or document or thing received from a Contracting State shall
be deemed to be the evidence collected during the course of investigation [Section 57].
Q54.
What is the mechanism to provide assistance to a Contracting State?
Where a Letter
of Request is received by the Central Government from a court or authority in a
contracting State requesting for investigation into an offence or proceedings
under PMLA, 2002 and forwarding to such court or authority any evidence
connected therewith, the Central Government may forward such Letter of Request
to the Special Court or to any authority under the Act for execution of such
request [Section 58].
Q55. Whether the properties involved in money laundering
located in India can be confiscated, where the offence of money laundering has
been committed outside India?
The properties
involved in money laundering located in India, where the offence of money
laundering has been committed outside India, can be ordered to be confiscated
by the Special Court/Adjudicating Authority on an application moved to the
Special Court/ Adjudicating Authority [Section 58B
& 62A].
Q56.
What are the reciprocal arrangements for processes and assistance for transfer
of accused persons?
(1)
A Special Court, in relation to an offence punishable under section 4
for the service or execution of a summons, a warrant or a search warrant in a
Contracting State shall send such summons or warrant, in duplicate, in
prescribed
(2)
Similarly, a summons, a warrant or a search warrant in relation to an
offence punishable under section 4, received for service or execution from a
Contracting State, shall be served or executed as if it were a summons or
warrant received by it from another Court in the said territories for service
or execution.
After execution
of summon or search warrant received from a Contracting State, the documents or
other things produced or things found during search shall be forwarded to the
Court issuing the summons or search-warrant through the specified Authority [Section 59].
Q57. Whether the property involved in money laundering and
located in the Contracting State can also be attached or seized?
Yes. In such
cases, after issue of an order for attachment of any property made under
Section 5 or freezing under Section 17(1A) or confirmation of attachment by
Adjudicating Authority under Section 8 or confiscation by Special Court under
Section 8, the Special Court, on an application by the Director or the
Administrator may issue a Letter of Request to a court or an authority in the
Contracting State for execution of such order as per the provisions of
corresponding law of that country [Section 60(1)].
MISCELLANEOUS
Q58. What is the punishment for vexatious search?
Imprisonment for a term
which may extend to two years or fine which may extend to fifty thousand rupees
or both [Section 62].
Q59.
What is the punishment for giving false information or failure to give
information, etc.?
Any person willfully and
maliciously giving false information and so causing an arrest or a search to be
made under this Act shall, on conviction, be liable for imprisonment for a term
which may extend to two years or with fine which may extend to fifty thousand
rupees or both [Section 63(1)].
Q60. What is the punishment if a person being legally bound to
state the truth of any matter refuses to answer any question put to him,
refuses to sign any statement made by him, or omits to attend or produce books
of account or documents at the place or time in compliance of summon issued
under section 50?
Penalty – A sum which shall
not be less than five hundred rupees but which may extend to ten thousand
rupees for each such default or failure, can be imposed. Further, a person who
intentionally disobeys any direction issued under Section 50 shall also be
liable
Q61. Whether a suit can be brought in civil court to set
aside or modify any proceedings taken or made under PMLA, 2002?
No suit can be
brought in any civil court to set aside or modify any proceeding taken or order
made under PMLA, 2002 and no prosecution, suit or other proceeding shall lie
against the Government or any officer of the Government for anything done or
intended to be done in good faith under the PMLA, 2002 [Section
67].
Q62. What is the mechanism to recover the fine or penalty
imposed on any person under Section 13 or Section 63?
Where any fine
imposed on any person under section 13 or section 63 is not paid within six
months from the day of imposition of fine or penalty, the Director, FIU-Ind or
Director of Enforcement or any other officer authorised by them in this behalf
may proceed to recover the amount from the said person in the same manner as
prescribed in Schedule II of the Income-tax Act, 1961 (43 of 1961) for the
recovery of arrears and he or any officer authorised by him in this behalf
shall have all the powers of the Tax Recovery Officer mentioned in the said Schedule
for the said purpose [Section 69].
Q63.
What are provisions when the offence of money laundering is committed by
companies?
(1)
Where a person committing a contravention of any of the provisions of
this Act or of any rule,
direction
or order made there under is a company, every person who, at the time the
contravention was committed, was in charge of, and was responsible to the
company, for the conduct of the business of the company as well as the company,
shall be deemed to be guilty of the contravention and shall be liable to be
proceeded against and punished accordingly :
Provided that
nothing contained in this sub-section shall render any such person liable to
punishment if he proves that the contravention took place without his knowledge
or that he exercised all due diligence to prevent such contravention.
(2)
Notwithstanding anything contained in sub-section (1), where a
contravention of any of the provisions of this Act or of any rule, direction or
order made there under has been committed by a company and it is proved that
the contravention has taken place with the consent or connivance of, or is
attributable to any neglect on the part of any director, manager, secretary or
other officer of any company, such director, manager, secretary or other
officer shall also be deemed to be guilty of the contravention and shall be
liable to be proceeded against and punished accordingly.
(3)
Further, a company may be prosecuted notwithstanding whether the
prosecution or conviction of any legal juridical person shall be contingent on
the prosecution or conviction of any individual [Section
70].
Q64. What will happen if there is conflict between the
provisions of PMLA, 2002 and other Acts / laws?
The provisions
of PMLA, 2002 have over-riding effect, notwithstanding anything inconsistent
therewith contained in any other law for the time being in force [Section 71].
Q65. What will happen to the proceedings initiated under
PMLA, 2002 in the event of death or insolvency of the person?
In cases where any
property of a person has been attached under section 8 and no appeal against
the order attaching such property has been preferred, then, the legal
representatives or the official assignee or the official receiver may prefer an
appeal to the Appellate Tribunal / High Court or to continue the appeal before
the Appellate Tribunal / High Court, in place of such person [Section 72].
ANNEXURE-A
THE SCHEDULE
PART A
PARAGRAPH 1
OFFENCES UNDER THE INDIAN PENAL
CODE, 1860
(45 OF 1860)
Section
|
Description of offence
|
120B
|
Criminal conspiracy.
|
121
|
Waging or attempting to wage war or abetting
|
waging of war, against the Government of
|
|
India.
|
|
121-A
|
Conspiracy to commit offences punishable by
|
section 121 against the State.
|
|
255
|
Counterfeiting Government stamp.
|
257
|
Making
or selling instrument for
|
counterfeiting Government stamp.
|
|
258
|
Sale of counterfeit Government stamp.
|
259
|
Having possession of counterfeit Government
|
stamp.
|
|
260
|
Using as genuine a Government stamp known
|
to be counterfeit.
|
Murder.
|
||
304
|
Punishment
for culpable homicide
not
|
|
amounting to murder.
|
||
307
|
Attempt to murder.
|
|
308
|
Attempt to commit culpable homicide.
|
|
327
|
Voluntarily causing hurt to extort property,
|
|
or to constrain to an illegal act.
|
||
329
|
Voluntarily causing grievous hurt to extort
|
|
property, or to constrain to an illegal act.
|
||
364A
|
Kidnapping for ransom, etc.
|
|
384
|
to 389
|
Offences relating to extortion.
|
392
|
to 402
|
Offences relating to robbery and dacoity.
|
411
|
Dishonestly receiving stolen property.
|
|
412
|
Dishonestly receiving property stolen in the
|
|
commission of a dacoity.
|
||
413
|
Habitually dealing in stolen property.
|
|
414
|
Assisting in concealment of stolen property.
|
|
417
|
Punishment for cheating.
|
|
418
|
Cheating with knowledge that wrongful loss
|
|
may ensue to person whose interest offender
|
||
is bound to protect.
|
||
419
|
Punishment for cheating by personation.
|
|
Cheating and dishonestly inducing delivery of
|
|
properties.
|
|
421
|
Dishonest
or fraudulent removal
or
|
concealment
of property to
prevent
|
|
distribution among creditors.
|
|
422
|
Dishonestly or fraudulently preventing debt
|
being available for creditors.
|
|
423
|
Dishonest or fraudulent execution of deed of
|
transfer containing false statement of
|
|
consideration.
|
|
424
|
Dishonest
or fraudulent removal
or
|
concealment of property.
|
|
467
|
Forgery of valuable security, will etc
|
471
|
Using as genuine a forged document or
|
electronic record.
|
|
472
|
and 473
Making or possessing counterfeit seal, etc.,
|
with intent to commit forgery.
|
|
475
|
and 476
Counterfeiting device or mark.
|
481
|
Using a false property mark.
|
482
|
Punishment for using a false property mark.
|
483
|
Counterfeiting a property mark used by
|
another.
|
|
484
|
Counterfeiting a mark used by a public
|
servant.
|
Making or possession or any instrument for
|
||
counterfeiting a property mark.
|
||
486
|
Selling goods marked with a counterfeit
|
|
property mark.
|
||
487
|
Making a false mark upon any receptacle
|
|
containing goods.
|
||
488
|
Punishment for making use of any such false
|
|
mark.
|
||
489
|
A
|
Counterfeiting currency notes or bank notes.
|
489 B
|
Using as genuine, forged or counterfeit
|
|
currency notes or bank notes.
|
||
PARAGRAPH 2
OFFENCES UNDER THE NARCOTIC DRUGS
AND
PSYCHOTROPIC SUBSTANCES ACT, 1985
(61 OF 1985)
Section
|
Description of offence
|
15
|
Contravention in relation to poppy straw.
|
16
|
Contravention in relation to coca plant and
|
coca leaves.
|
|
17
|
Contravention in relation to prepared opium.
|
18
|
Contravention in relation to opium poppy and
|
opium.
|
|
19
|
Embezzlement of opium by cultivator.
|
Contravention in relation to cannabis plant
and
|
|
cannabis.
|
|
21
|
Contravention in relation to manufactured
|
drugs and preparations.
|
|
22
|
Contravention in relation to psychotropic
|
substances.
|
|
23
|
Illegal import into India, export from India
|
to transshipment of narcotic drugs and
|
|
psychotropic substances.
|
|
24
|
External dealings in narcotic drugs and
|
psychotropic substances in contravention of
|
|
section
12 of the
narcotic Drugs and
|
|
Psychotropic Substances Act, 1985.
|
|
25-A
|
Contravention of orders made under section
|
9-A of the Narcotic Drugs and Psychotropic
|
|
Substances Act, 1985.
|
|
27-A
|
Financing illicit traffic and harbouring
|
offenders.
|
|
29
|
Abetment and criminal conspiracy.
|
PARAGRAPH 3
OFFENCES UNDER THE EXPLOSIVE
SUBSTANCES
ACT, 1908 (6 OF 1908)
Section Description of offence
3 Causing explosion likely to endanger life or
property.
Attempt to cause explosion, or for making or
|
|
keeping explosives with intent to endanger
|
|
life or property.
|
|
5
|
Making or possessing explosives under
|
suspicious circumstances.
|
PARAGRAPH 4
OFFENCES UNDER THE UNLAWFUL
ACTIVITIES
(PREVENTION) ACT, 1967 (37 OF
1967)
Section
|
Description
|
of offence
|
|
10 read with section 3
|
Penalty for being member of an
|
||
unlawful association, etc
|
|||
11 read with sections 3
|
Penalty for dealing with funds of
|
||
and 7
|
an unlawful association.
|
||
13
|
read with section 3
|
Punishment for unlawful activities.
|
|
16
|
read with section 15
|
Punishment for terrorist act.
|
|
16A
|
Punishment for making demands of
|
||
radioactive substances, nuclear
|
|||
devices, etc.
|
|||
17
|
Punishment for raising fund for
|
||
terrorist act.
|
|||
18
|
Punishment for conspiracy, etc.
|
||
18A
|
Punishment
|
for
organizing of
|
|
terrorist camps.
|
|||
Punishment for recruiting of any
|
|
person or persons for terrorist act.
|
|
19
|
Punishment for harbouring, etc.
|
20
|
Punishment for being member of
|
terrorist gang or organization.
|
|
21
|
Punishment for holding proceeds of
|
terrorism.
|
|
38
|
Offence relating to membership of
|
a terrorist organization.
|
|
39
|
Offence relating to support given to
|
a terrorist organization.
|
|
40
|
Offence of raising fund for a
|
terrorist organization.
|
PARAGRAPH 5
OFFENCES UNDER THE ARMS ACT, 1959
(54 OF 1959)
Section Description of offence
25 To manufacture, sell, transfer, convert,
repair or test or prove or expose of offer for
sale or transfer or have in his possession for
sale, transfer, conversion, repair, test or
proof, any arms or ammunition in
contravention of section 5 of the Arms Act,
1959.
To acquire, have in possession or carry any
prohibited arms or prohibited ammunition in
contravention of section 7 of the Arms Act,
1959.
PARAGRAPH 6
OFFENCES UNDER THE WILD LIFE
(PROTECTION)
ACT, 1972 (53 OF 1972)
Section Description of offence
51 read with section 9 Hunting of wild animals.
51 read with section 17-A Contravention of provisions of section
17-A relating to prohibition of picking uprooting, etc., of specified plants.
51 read with section 39 Contravention of provisions
of section 39 relating to wild animals, etc., to be Government property.
51 read with section 44 Contravention of provisions
of section 44 relating to dealings in trophy and animal articles without
licence prohibited.
51 read with section 48 Contravention of provisions
of section 49-B relating to prohibition of dealings in trophies, animals
articles, etc., derived from scheduled animals.
51 read with section 49-B Contravention of provisions of section 49-B relating to
prohibition of dealings in trophies, animal articles, etc., derived from
scheduled animals.
PARAGRAPH 7
OFFENCES UNDER THE IMMORAL TRAFFIC
(PREVENTION) ACT, 1956 (104 OF
1956)
Section
|
Description of offence
|
5
|
Procuring, inducing or taking persons for the
|
sake of prostitution.
|
|
6
|
Detaining
a person in
premises where
|
prostitution is carried on.
|
Seducing
or soliciting for
purpose of
|
|
prostitution.
|
|
9
|
Seduction of person in custody.
|
PARAGRAPH 8
|
|
OFFENCES UNDER THE PREVENTION OF
|
|
CORRUPTION ACT, 1988 (49 OF 1988)
|
|
Section
|
Description of offence
|
7
|
Public servant taking gratification other than
|
legal remuneration in respect of an official
|
|
Act.
|
|
8
|
Taking gratification in order, by corrupt or
|
illegal means, to influence public servant.
|
|
9
|
Taking gratification for exercise of personal
|
influence, with public servant.
|
|
10
|
Abetment by public servant of offences
|
defined in section 8 or section 9 of the
|
|
Prevention of Corruption Act, 1988.
|
|
13
|
Criminal misconduct by a public servant.
|
PARAGRAPH 9
OFFENCES UNDER THE EXPLOSIVES ACT,
1884
(4 OF 1884)
Section
|
Description of offence
|
9-B
|
Punishment for certain offences.
|
9-C
|
Offences by Companies.
|
OFFENCES UNDER THE ANTIQUITIES AND
ARTS
TREASURES ACT, 1972 (52 OF 1972)
Section Description of offence
25 read with section 3 Contravention of export
trade in antiquities and art treasures.
28 Offences by Companies.
PARAGRAPH 11
OFFENCES UNDER THE SECURITIES AND
EXCHANGE
BOARD OF INDIA ACT, 1992 (15 OF
1992)
Section Description of offence
12A read with section 24 Prohibition of manipulative and deceptive devices, insider
trading and substantial acquisition of securities or control.
PARAGRAPH 12
OFFENCES UNDER THE CUSTOMS ACT,
1962
(52 OF 1962)
Section Description of offence
135 Evasion of duty or prohibitions
PARAGRAPH 13
OFFENCES UNDER THE BONDED LABOUR
SYSTEM
(ABOLITION) ACT, 1976 (19 OF 1976)
Section Description of offence
16 Punishment for enforcement of bonded
labour.
Punishment for extracting bonded labour
|
|
under the bonded labour system.
|
|
20
|
Abetment to be an offence.
|
PARAGRAPH 14
OFFENCES UNDER THE CHILD LABOUR
(PROHIBITION AND REGULATION) ACT,
1986
(61 OF 1986)
Section Description of offence
14 Punishment for employment of any child to
work in contravention of
the provisions of section 3.
PARAGRAPH 15
OFFENCES UNDER THE TRANSPLANTATION
OF
HUMAN ORGANS ACT, 1994 (42 OF 1994)
Section
|
Description of offence
|
18
|
Punishment for removal of human organ
|
without authority.
|
|
19
|
Punishment for commercial dealings in human
|
organs.
|
|
20
|
Punishment for contravention of any other
|
provision of this Act.
|
OFFENCES UNDER THE JUVENILE
JUSTICE
(CARE AND PROTECTION OF CHILDREN)
ACT, 2000
(56 OF 2000)
Section
|
Description of offence
|
23
|
Punishment for cruelty to juvenile or child.
|
24
|
Employment of juvenile or child for begging.
|
25
|
Penalty for giving intoxicating liquor or
|
narcotic drug or psychotropic substance to
|
|
juvenile or child.
|
|
26
|
Exploitation of juvenile or child employee.
|
PARAGRAPH 17
OFFENCES UNDER THE EMIGRATION ACT,
1983
(31 OF 1983)
Section Description of offence
24 Offences and penalties.
PARAGRAPH 18
OFFENCES UNDER THE PASSPORT ACT,
1967
(15 OF 1967)
Section Description of offence
12 Offences under penalties.
OFFENCES UNDER THE FOREIGNERS ACT,
1946
(31 OF 1946)
Section
|
Description of offence
|
14
|
Penalty for contravention of provisions of the
|
Act, etc.
|
|
14B
|
Penalty for using forged passport.
|
14C
|
Penalty for abetment.
|
PARAGRAPH 20
OFFENCES UNDER THE COPYRIGHT ACT,
1957
(14 OF 1957)
Section
|
Description of offence
|
63
|
Offences or infringement of copyright or
|
other rights conferred by this Act.
|
|
63A
|
Enhanced penalty on second and subsequent
|
convictions.
|
|
63B
|
Knowing use of infringing copy of computer
|
programme.
|
|
68A
|
Penalty for contravention of section 52A.
|
PARAGRAPH 21
OFFENCES UNDER THE TRADE MARKS
ACT, 1999
(47 OF 1999)
Section Description of offence
103 Penalty for applying false trademarks, trade
description, etc.
50
Penalty for selling goods or providing
services
|
|
to which false trade-mark or false trade
|
|
description is applied.
|
|
105
|
Enhanced penalty on second or subsequent
|
conviction.
|
|
107
|
Penalty for falsely representing a trade mark
|
as registered.
|
|
120
|
Punishment of abetment in India of acts done
|
out of India.
|
PARAGRAPH 22
OFFENCES UNDER THE INFORMATION
TECHNOLOGY
ACT, 2000 (21 OF 2000)
Section
|
Description of offence
|
72
|
Penalty for breach of confidentiality and
|
privacy.
|
|
75
|
Act to apply for offence or contravention
|
committed outside India.
|
PARAGRAPH 23
OFFENCES UNDER THE BIOLOGICAL
DIVERSITY
ACT, 2002 (18 OF 2003)
Section Description of offence
55 read with section 6 Penalties for contravention
of section 6, etc.
OFFENCES
UNDER THE PROTECTION OF PLANT VARIETIES AND FARMERS RIGHTS ACT, 2001 (53 OF
2001)
Section Description of offence
70 read with section 68 Penalty for applying false denomination, etc.
71 read with section 68 Penalty for selling
varieties to which false denomination is applied.
72 read with section 68 Penalty for falsely representing a variety as registered.
70 read with section 68 Penalty for subsequent offence.
PARAGRAPH 25
OFFENCES UNDER THE ENVIRONMENT
PROTECTION
ACT, 1986 (29 OF 1986)
Section
|
Description
|
of
|
offence
|
|
15
|
read with section 7
|
Penalty
|
for
|
discharging
|
environmental pollutants.
|
||||
15
|
read with section 8
|
Penalty for handling hazardous
|
||
substance.
|
||||
OFFENCES UNDER THE WATER
(PREVENTION AND
CONTROL OF POLLUTION) ACT, 1974
(6 OF 1974)
Section
|
Description of offence
|
41(2)
|
Penalty for pollution of stream or well.
|
43
|
Penalty for contravention of provisions of
|
section 24.
|
PARAGRAPH 27
OFFENCES UNDER THE AIR (PREVENTION
AND
CONTROL OF POLLUTION) ACT, 1981
(14 OF 1981)
Section Description of offence
37 Failure to comply with the provisions for
operating industrial plant.
PARAGRAPH 28
OFFENCES
UNDER THE SUPPRESSION OF UNLAWFUL ACTS AGAINST SAFETY OF MARITIME NAVIGATION
AND FIXED PLATFORMS ON CONTINENTAL SHELF ACT, 2002 (69 OF 2002)
Section Description of offence
3 Offences against ship, fixed platform, cargo
of a ship, maritime navigational facilities,
etc.
PART B
Part B (containing para 1
to para 25) has been omitted by the Prevention of Money Laundering (Amendment)
Act, 2012 (2 of 2013) and all the offences of Part B have now been placed in
Part A of the Schedule.
PART C
An offence which is the
offence of cross border implications and is specified in,-
(1)
Part A;
or
(2)
omitted by the Prevention of Money Laundering (Amendment) Act, 2012 (2
of 2013) with effect from 15.02.2013.
(3)
the offences against property under Chapter XVII of the Indian Penal
Code.
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