How does enactment of Prevention of Money Laundering Act 2002 relate to international decisions on money laundering? What are the legal controversies around the act? (GS1)(12 MARKS)
ENACTMENT OF PREVENTION OF MONEY LAUNDERING ACT 2002
In 1988, United Nations held the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.
Urged all countries to prevent laundering of drug crime proceeds and related activities.
Seven major nations formed the Financial Action Task Force (FATF) in July 1989.
FATF aimed to address money laundering issues and propose countermeasures.
In 1990, UN General Assembly adopted the Political Declaration and Global Programme of Action.
Called upon member countries to enact effective legislation against drug money laundering
Recognizing drug trafficking as a global issue, UN emphasized combating money laundering in a special session in 1998.
India used FATF recommendations to create legislation against drug money laundering, aligning with UN's directives and under Article 253 of Indian constitution created Prevention of Money Laundering Act 2002
Initially focused on drug money laundering, the Act included offenses from IPC and Narcotic Drugs and Psychotropic Substances Act, expanding its scope over time
The offenses listed in the schedule serve as the starting point for implementing the PMLA, linking money laundering to these scheduled offenses
CONTROVERSIES AROUND PMLA
Offenses like corruption under the Prevention of Corruption Act, 1988, have been added to the PMLA's schedule of offenses. This inclusion subjects public servants to the same rigorous treatment as drug traffickers under the PMLA.
One concerning aspect is the presumption of guilt until innocence is proven under the PMLA. This reversal of the burden of proof is alarming, affecting the rights of the accused.
PMLA contradicts the Anglo-Saxon legal principle of "innocent until proven guilty." Section 45 of the PMLA mandates denial of bail unless the judge is convinced of the accused's innocence.
IMPACT ON BAIL : This provision makes it challenging for accused individuals to obtain bail, leading to prolonged detention without trial. Judges are hesitant to grant bail due to the high threshold of proving innocence set by the law.
