ABSTRACT:
The prevention of Money Laundering Act,2002 (PMLA) was enacted by the parliament to curb the money laundering activities acquired through Proceeds of Crime and it creates a combat to illicit financial. It was enacted to fulfill India’s commitment under United Nation Convention against illicit trafficking Narcotic Drugs and Psychotropic Substances which was primarily adopted by the UN General assembly with ulterior motive of preventing laundering of proceeds of drug crime, drug related money.
India was participant and signatory of the above said convention, So India was under the compulsion to enact a law to control and prevent the laundering of money through various proceeds of crime. Accordingly the bill was passed by the parliament in the year 2002 and it came into effect on 1st July 2005.
The definition of Money Laundering under PMLA,2002 as been widely define and covers any process or activity attempting to legitimize illegally obtained proceeds such as those arising from criminal activity. The act criminalizing money laundering activities and imposes stringent penalties that include arrest of the individual if they found guilty under this act. This act provides various statutory authority with the Enforcement Directorate(ED) at the forefront. By this, the ED have statutorily obtained full power of investigation, search and seizure of properties and arrest of persons whenever they are engaged in money laundering.
Keywords: PMLA, The Prevention of Money Laundering Act,2002, The Key Provisions of PMLA,2002, Section 24 of PMLA,2002, Section 45 of PMLA,2002.
INTRODUCTION:
The term Money Laundering is a process were the money obtained through illegal means through a legitimate business or send it abroad to a foreign bank so that when it comes back to the person who obtained through illegal means nobody knows that it was illegally obtained. Normally Money Laundering involves three major transaction.
In 1996,The Ministry of Finance obtained an inter ministerial committee to submit the report on the measures to control the prevention of money laundering. The committee submitted the report on 1998 according to the report the PMLA was introduced by the parliament in the year,1998. And the bill has sent to the standing committee of the parliament. Later on the bill was passed in the year 2002 and came into force on 1st July 2005.The PMLA defines “proceeds of crime” as any property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. This definition is deliberately broad, encompassing not just the immediate gains from crime but also any property traceable to such gains. Understanding this concept is crucial because the entire architecture of the PMLA—from attachment and confiscation to prosecution—revolves around identifying, tracing, and recovering these tainted assets. A comprehensive research paper on this topic would examine several dimensions: the statutory framework and its evolution through amendments; judicial interpretation of what constitutes proceeds of crime; the mechanisms for identification, attachment, and confiscation; the challenges in enforcement including issues of burden of proof; international cooperation and cross-border asset recovery; and the balance between effective law enforcement and protection of individual rights. Recent years have witnessed an expansion in PMLA’s application, with courts clarifying contentious issues around the scope of scheduled offences, the threshold for attachment, and the rights of accused persons. High-profile cases have brought these questions into public discourse, making this an opportune moment to analyze how the law operates in practice.