Understanding the different sides of the PMLA coin
Brief overview of PMLA; Pratap Bhanu Mehta's opposition of the act; Tushar Mehta's defence of the act; Kafkaesque & modern bureaucracy
In today’s post, we will be covering about Prevention of Money Laundering Act(PMLA). As you glance through the summary shared try to critique the opinion we have shared or add a new dimension to our perspective. In the end, you can watch a brief TED video about the concept of Kafkaesque and its links to modern bureaucracy
Let’s get started.
Overview of PMLA
Sec. 3 of PMLA defines offence of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering. 1
Accused under PMLA can be tried under the Code of Criminal Procedure 1973.
Enforcement Directorate and Financial Intelligence Unit – India are two bodies that form the Institutional framework for PMLA.
Under the act, every bank is expected to furnish a Suspicious transaction report.
Adjudicating Authority exercise jurisdiction, powers and authority conferred by or under the PMLA
Appellate Tribunal has been constituted to hear appeals against the orders of the Adjudicating Authority and the authorities under the said Act.
India has been actively involved in all international operations on drug-related matters such as Project Prism and Project Cohesion and Paris Pact.
By upholding PMLA, SC puts its stamp on Kafka’s law
Some of the statements in the article can be directly picked up and asked as questions. For example:
Rather than being the guardian of rights, the Supreme Court is now a significant threat to it. Comment.
Is the Supreme court more executive-minded than the executive?
The draconian PMLA reflects the continuation of the British legacy on the Indian law and order administration. Critically Analyze.
Pratap Bhanu Mehta has highlighted the below important points that can be referenced in similar contexts.
Vijay Madanlal Choudhary and Ors versus Union of India - This case has challenged the constitutionality of certain provisions of PMLA.
Low conviction rate - Only 0.5% of the people arrested under PMLA have been convicted. Thus the process becomes the punishment.
International Obligation - The PMLA was enacted to honour India's obligations under the UN Convention on Drug Trafficking.
Solicitor General Tushar Mehta shared the government’s perspective on the need for and implementation of PMLA (read here)
PMLA has enabled the retrieval of 18,000 Crs to banks.
The number of annual cases taken up in India is much lower when compared to other nations such as - UK (7,900), USA (1,532), China (4,691),
The law is a necessity as part of the FATF regulations.
UN estimates of Global money laundering stand at US $ 2.1 trillion or 3.6 per cent of the global GDP.
Related PA concepts
Impact of Globalisation on National Policymaking (UPSC PYQ 2020)
Accountability and Control
Law and Order → Investigative Agencies (ED)