The government on Tuesday tabled the Prevention of Money Laundering (Amendment) Bill, 2002 that seeks to introduce the concept of “corresponding law’’ to link the provisions of Indian law with the laws of foreign countries and provide for transfer of the proceeds of the foreign predicate offence in any manner in India.
The Bill enlarges the definition of offence of money laundering to including activities like concealment, acquisition, possession and use of proceeds of crime as criminal activities and remove the existing limit of Rs 5 lakh as fine under the existing Act.
According to the statement of objects and reasons, the Bill has provisions for attachment and confiscation of the proceeds of crime even if there is no conviction so long as it is proved that offence of money laundering has taken place and property in question is involved in money laundering. It will confer power to the director to call for records of transactions or any additional information that may be required for the purpose of prevention of money laundering and also to make enquiries for non-compliance of reporting obligations cast upon them.
The Bill has introduced the concept of 'reporting entity' that would include banks, financial institution and intermediaries and others.
It also proposed to make the reporting entity, its designated directors on the board and employees responsible for omissions or commissions in relation to the reporting obligations. Reporting entity needs to maintain a record of all transactions, including information relating to transactions to enable it to reconstruct individual transactions, the Bill said.
Such entities would maintain record of documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients, it said.
The amendment was necessitated in view of India being an important member of Financial Action Task Force and also chairing its Asia Pacific group. Therefore, it was important to make the existing PMLA in tune with the practice being followed world over.
The Prevention of Money laundering Act, 2002 was enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering.
The Act was amended in the year 2005 and 2009 to remove the difficulties arisen in implementation of the Act. The government said that the problem of money laundering is no longer restricted to the geo-political boundaries.
"It is a global menace that cannot be contained by any nation alone," the Bill said.
The Bill also proposes to provide for appeal against the orders of the appellate tribunal regarding money laundering directly to the Supreme Court instead of the High Court as per the existing laws.
Any person aggrieved by any decision or order of the appellate tribunal may file an appeal to the Supreme Court within 60 days from the date of communication of the decision or order of the appellate tribunal to him on any question of law arising out of such order, the Bill said.
The Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days, it said.