Prevention of Money Laundering Act (PMLA)
- The Supreme Court has upheld several provisions of the Prevention of Money Laundering Act (PMLA) that deal with a wide range of issues, from what constitutes the main offence to the powers of the Enforcement Directorate (ED) and the procedure for conducting searches and seizures and effecting arrests.
- Since the middle of the 1980s, there has been widespread worry about how the earnings of illegal operations, such drug trafficking, are “laundered” or used to support terrorism.
- The Vienna Convention (also known as the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances), which was adopted in Vienna in 1988, was the first international convention to urge countries to enact domestic drug-trafficking laws.
- Countries were requested to forbid the conversion or transfer of property acquired via the sale of narcotics in order to hide its criminal origin as part of these regulations.
- In 1989, the G-7 Summit in Paris established the Financial Action Task Force (FATF) in response to growing concerns about money laundering.
About Prevention of Money Laundering Act (PMLA):
- The PMLA was passed in 2002, but it didn’t go into effect until 2005. Its clauses give India’s duties to follow international agreements effect.
- Using this context, the Union government argued that the PMLA provisions and any later revisions were lawful and required in order to fulfil the nation’s duties to combat the threat of money laundering.
- The Supreme Court’s ruling supported the government’s argument.
What is the issue?
- An internal handbook forms the foundation of ED operations. An “Enforcement Case Information Report” (ECIR), which is the equivalent of an FIR in typical circumstances, is registered.
- The manual is a private document, and the ED does not give the accused access to the ECIR. Therefore, it is uncertain why and how a money-laundering investigation is started.
- Unaware of the basis for the summons, the person is still required to appear, respond to all inquiries, and provide the requested documents.
- The petitioners stated that this gave ED employees complete discretion over any investigation, summons issuance, and decision to order a search, seizure, or arrest.
Source The Hindu