The Supreme Court (SC) on July 27 said money laundering was a heinous crime that not only affects the social and economic fabric of the nation, but also tends to promote other heinous offences, such as terrorism, offences related to NDPS Act (anti-drug law) etc .
- The observation came as the SC rejected 241 petitions challenging the constitutional validity of certain provisions of the Prevention of Money Laundering Act (PMLA), 2002.
- A three-judge bench of Justice A.M. Khanwilkar, Dinesh Maheshwari and C.T. Ravikumar upheld the stringent provisions in the law — on bail, the wide powers given to the Enforcement Directorate (ED) on search and seizure, admissibility of confession statement before the ED, reverse burden on the accused to prove innocence, non-supply of Enforcement Case Information Report (ECIR) lodged before prosecution, attachment of properties under the law, and expansive definition of the term “proceeds of crime”.
- Money laundering is an offence against the sovereignty and integrity of the country. It is no less a heinous offence than the offence of terrorism.
About Enforcement Directorate (ED)
- The Enforcement Directorate (ED) goes back to May 1, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs, for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA).
- The ED is a multi-dimensional organisation investigating economic offences under the Prevention of Money Laundering Act (PMLA), Fugitive Economic Offenders Act, Foreign Exchange Management Act and FERA.
- The PMLA was brought in for this exact reason in 2002, but was enacted only in 2005.
- Whenever any offence is registered by a local police station, which has generated proceeds of crime over and above Rs. 1 crore, the investigating police officer forwards the details to the ED.
- If the amount which has been stolen is used after four years to purchase some properties, then the ill-gotten money is brought back in the market; or if the money is given to someone else to buy properties in different parts of the country, then there is ‘laundering’ of money and the ED will need to step in and look into the layering and attachment of properties to recover the money.
- The ED carries out search (property) and seizure (money/documents) after it has decided that the money has been laundered, under Section 16 (power of survey) and Section 17 (search and seizure) of the PMLA.
- On the basis of that, the authorities will decide if arrest is needed as per Section 19 (power of arrest).
- Under Section 50 (powers of authorities regarding summons, production of documents and to give evidence etc), the ED can also directly carry out search and seizure without calling the person for questioning.
- It is not necessary to summon the person first and then start with the search and seizure.
- If the person is arrested, the ED gets 60 days to file the prosecution complaint (chargesheet) as the punishment under PMLA doesn’t go beyond seven years.
- Since the PMLA was enacted only in 2005, any ill-gotten property acquired before the year 2005 has no case under PMLA.
(Source: The Hindu)
