PMLA: Combating Money Laundering and Financial Crimes


Concept :

  • The Prevention of Money Laundering Act (PMLA), enacted by the Indian government, targets money laundering and associated financial offenses.
  • Enacted in 2002, the PMLA aims to prevent and control money laundering activities and confiscate proceeds of crime derived from illicit activities.

Key Provisions:

Offences and Penalties:

  • The PMLA criminalizes money laundering activities and imposes stringent penalties on offenders.
  • Offences under the Act include concealing, acquiring, possessing, or using proceeds of crime.
  • Aiding, abetting, or participating in any process connected with proceeds of crime is prohibited.

Definition of Money Laundering:

  • Any process or activity concealing the illicit origin of funds obtained through criminal activities defines money laundering.
  • The Act tackles a wide range of predicate offenses, such as terrorism, drug trafficking, organized crime, corruption, tax evasion, and fraud.

Designated Authorities:

  • The PMLA designates various authorities responsible for enforcing and implementing its provisions.
  • The Enforcement Directorate (ED) leads money laundering investigations and enforcement under the Act.

Attachment and Confiscation of Proceeds of Crime:

  • PMLA enables attachment and confiscation of proceeds from money laundering, considered as a vital feature.
  • Additionally, the Act authorizes freezing and seizing assets suspected of money laundering during investigation and trial.

Legal Framework for International Cooperation:

  • The PMLA provides a legal framework for international cooperation and mutual legal assistance in combating money laundering and related offences.
  • India engages in agreements related to exchange of information and cooperation related to anti-money laundering investigations with other nations.

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