SC upholds powers of arrest, raid under PMLA-The Hindu-28/07/2022
GS-II & GS-lll
The Supreme Court on Wednesday upheld the core amendments made to the Prevention of Money Laundering Act (PMLA), which gives the government and the Enforcement Directorate
(ED) virtually unbridled powers of summons, arrest, and raids, and makes bail nearly impossible while shifting the burden of proof of innocence on to the accused rather than the prosecution.
Money laundering is the conversion or transfer of property, the concealment or disguising of the nature of the proceeds, the acquisition, possession or use of property, knowing that these are derived from criminal acts,The money generated is referred to as ‘dirty money,’ and money laundering is the act of converting ‘dirty money’ into ‘legitimate’ money, or participating in or assisting the movement of funds to make the proceeds appear legitimate.
About the Prevention of Money Laundering Act:
It was enacted as a response to India’s global commitment (including the Vienna Convention) to curb the menace of money laundering.
PMLA was enacted in 2002 and it came into force in 2005, to curb money laundering (process of converting black money into white) and to provide for seizure of property derived from money-laundering.The act was amended in the year 2005, 2009 and 2012.
Objectives of PMLA
The PMLA seeks to combat money laundering in India and has three main objectives:
To prevent and control money laundering.
To confiscate and seize the property obtained from the laundered money; and
To deal with any other issue connected with money laundering in India.
ED has been given the responsibility to enforce the provisions of the PMLA by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court.
The origin of this Directorate goes back to 1 May 1956, when an ‘Enforcement Unit’ was formed, in the Department of Economic Affairs, for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947.
The Directorate of Enforcement (ED) is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India.
It is part of the Department of Revenue, Ministry of Finance.
The prime objective of the Enforcement Directorate is the enforcement of two key Acts of the Government of India namely, the Foreign Exchange Management Act 1999 (FEMA) and the Prevention of Money Laundering Act 2002 (PMLA)
Despite being illegal, money laundering doesn't lose its popularity. Besides, the advancement in technology has further added to the cause of money laundering by reducing its chances of detection to minimum. There is a need for significant change in method and approach to combat money laundering.