RIGHTS OF THE ACCUSED IN PMLA CASES

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Context:

The Supreme Court has enhanced the protection of the rights of accused under Prevention Of Money Laundering Act, (PMLA).

Details

• The Prevention of Money Laundering Act (PMLA) was introduced in 2002 to curb money laundering.
• PMLA empowered the Enforcement Directorate (ED) to probe money laundering charges and arrest suspects.
• Recently, the Supreme Court has scrutinized the powers of ED.

Key Highlights of the Supreme Court Ruling on Rights of Accused under PMLA

• The Supreme Court highlighted that under Article 22 of the Indian Constitution, an accused has a fundamental right to be informed of the reasons for arrest.
• Previously, the ED was only required to inform the accused orally, but the Court ruled that written grounds must be provided without exception.
  • • This assures that the arrest was lawful and transparent.
    • This prevents arbitrary arrests and guarantees that the accused understand and challenge their detention.
• The Court upheld the strict bail conditions under the PMLA while recognising the right to bail under Section 436A of the Code of Criminal Procedure (CrPC).
  • • The provision requires that a person detained for half the maximum time of imprisonment shall be released on bail.
• The Court established that the reasons for arrest must have a high level of proof and be appropriate.
• The Court emphasized that the exception in Section 45, which allows for bail to women if directed by the Special Court, should be applied fairly.
• The Court upheld that confessions obtained by force or practices that violate the right to self-incrimination cannot be accepted as evidence.

Prevention of Money Laundering Act (PMLA)

• It was established to prevent and control money laundering in India.
  • • Money laundering is the process of presenting illegally obtained funds as legitimate while hiding their criminal origins.
    • This act establishes a legal basis for seizing and confiscating property resulting from such illegal activity.
• The act was designed to ensure compliance with several global conventions and recommendations, including:
• The Vienna Convention (1988) on combating drug trafficking and related money laundering activities.
• The Financial Action Task Force (FATF) Recommendations (1990) to set international standards for anti-money laundering measures.
• United Nations Resolutions (1990) to tackle the drug problem and related financial crimes.

Key Highlights of the PMLA Act

• The Enforcement Directorate (ED) is responsible for enforcing the PMLA.
  • • It has wide authority, such as issuing arrest warrants, executing raids, and making arrests.
• The Act states that anyone found guilty of money laundering will be imprisoned for three to seven years; however, the maximum punishment may be extended to ten years instead of seven.
• The Director or an officer above the Deputy Director may attach property believed to be "proceeds of crime" for 180 days.
• The Adjudicating Authority, assigned by the central government, resolves disputes involving money laundering matters.
• Under the PMLA, if someone is accused of money laundering, they have to prove that their assets are illegal. This transfers the burden of proof to the accused.
• The Appellate Tribunal hears appeals against Adjudicating Authority judgements.

Concerns with the PMLA

• The enormous authority granted to the ED raises questions about accountability and transparency.
• The law imposes responsibility on the accused to prove their innocence. This can make it difficult to secure bail and result in lengthy judicial proceedings.
• Despite the strict procedures, the PMLA has a relatively low conviction rate.
  • • Many people involved in money laundering suffer lengthy trials and asset seizures, even if they are not convicted.
    • In the last ten years, the Enforcement Directorate has filed 5,297 money laundering charges, with only 43 trials completed.
• While the PMLA allows for the attachment of properties linked to money laundering, its practical implementation can be harsh.
  • • It might make it difficult for people to keep their dignity and continue running their businesses or earning a living.
• The ED lacks the technical skills and advanced training needed to keep up with complex money laundering strategies like digital currency and offshore accounts.
• Money laundering is a transnational crime that involves multiple nations, and the ED faces challenges in obtaining timely and accurate information from foreign stakeholders due to bureaucratic barriers and legal challenges.

Way Forward

• To address overlapping jurisdictions, clearer guidelines and improved collaboration among financial regulatory bodies are required.
• The ED should invest in advanced training programs for officers, with a focus on new money laundering patterns.
  • • Partnerships with foreign organizations and private sector specialists can provide specialized training.
• To provide speedy justice in money laundering cases, judicial reforms are required.
  • • Special courts should be established to handle only PMLA cases, decreasing backlogs and speeding up trials.
• Strengthening international collaboration through bilateral treaties, and participating in global anti-money laundering programs such as the Financial Action Task Force can help the ED identify and recover laundered funds across borders.

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ANTI-MONEY LAUNDERING LAW

Source:

Indian Express

Wikipedia

Deccanherald

The Hindu