Adjudicating Authority under the PMLA provisions

13 Apr 2024 Adjudicating Authority under the PMLA provisions

Posted at 16:39h in Daily current-affairs by Amit Pradhan 0 Comments

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THIS ARTICLE COVERS ‘DAILY CURRENT AFFAIRS’ AND THE TOPIC DETAILS OF ”Adjudicating Authority under the PMLA provisions”. THIS TOPIC IS RELEVANT IN THE “ECONOMICS” SECTION OF THE UPSC CSE EXAM.

WHY IN THE NEWS?

Recently, the adjudicating authority under the Prevention of Money Laundering Act (PMLA) upheld the Enforcement Directorate (ED) ‘s attachment of assets worth around ₹752 crore of Congress-run National Herald newspaper and associated firms, terming them “proceeds of crime” involved in money laundering.

These assets include prime properties in Delhi, Mumbai, and Lucknow owned by Associated Journal Limited (AJL) and Young Indian (YI), associated with Congress leaders Sonia Gandhi and Rahul Gandhi. According to the ED’s findings, AJL possessed proceeds of crime valued at Rs.661.69 crore through immovable properties across various cities. In comparison, YI held proceeds totalling Rs.90.21 crore in AJL’s equity shares.

Background of the Enforcement Directorate (ED):

- The Enforcement Directorate (ED) is a domestic law enforcement and economic intelligence agency. It is responsible for enforcing economic laws and fighting economic crime in India.
- EDs originated in May 1956, when an “enforcement unit” was formed to handle Exchange Control law violations under the Foreign Exchange Regulation Act (FERA) 1947. In 1957, this unit was renamed ‘Enforcement Directorate’.
- ED is controlled by the Department of Revenue, Ministry of Finance, and Government of India.
- The Enforcement Directorate’s prime objective is to enforce three key Acts of the Government of India, mainly the Foreign Exchange Management Act, 1999 (FEMA), the Prevention of Money Laundering Act, 2002 (PMLA), and the Fugitive Economic Offenders Act, 2018 (FEOA).

About The Prevention of Money Laundering Act, 2002:

The Enforcement Directorate (ED) enforces the Prevention of Money Laundering Act (PMLA) by investigating to identify assets acquired from criminal proceeds. It has the authority to prosecute offenders and facilitate the confiscation of such assets by a Special Court.

Section 3 of the Act defines money laundering as any direct or indirect involvement, assistance, or engagement in activities related to the proceeds of crime, presenting it as legitimate. PMLA defines money laundering offences and imposes penalties for them. These include imprisonment and fines for offenders.

PMLA allows certain entities, such as banks and financial institutions, to maintain records of transactions and report suspicious transactions to the ED. The Act establishes a Designated Authority to assist in investigating and prosecuting money laundering offences. Also, it provides for establishing an Appellate Tribunal to hear appeals against orders of the Adjudicating Authority.

The Act was amended by the Prevention of Money Laundering (Amendment) Act, 2009 and the Prevention of Money Laundering (Amendment) Act, 2012. The recent PMLA was amended through the Finance Act of 2015 (‘2015 Amendment’), Finance Act of 2018 (‘2018 Amendment’), and Finance Act 2019 (‘2019 Amendment’).

Powers Of ED under the PMLA:

1. Sections 48 & 49 of the PMLA empower the ED officers to investigate cases of Money Laundering.
2. Section 50(2) of the PMLA authorizes the ED to summon “any person” needed for evidence or record production during investigations or proceedings under the law.
3. Section 50 (3) required the summoned individual to attend personally or via authorized agents, ensuring they provided truthful statements and relevant documents.
4. The ED has special powers for confiscating property under the PMLA Act.