Prevention of money laundering Act, 2002 is an Act of Parliament of India to prevent money laundering and for the seizure of the property involved in money laundering. This law came into force with the effect from July 1, 2005. The rules notified there are for banking companies, NBFC’s to verify the identity of customers, maintain their records and furnish the information as in the prescribed form to Financial Intelligence Unit- India.
Amendments to the act were done in the year 2005, 2009, 2012.
Three main objectives of PMLA to counter money laundering:
· To prevent and control money laundering.
· To confiscate and seize the property obtained from the laundered money; and
· To deal with any other issue connected with money laundering in India.
Presumption in inter-connected transactions
Where money laundering involves two or more linked transactions and one or more such transactions is or are proved to be involved in money laundering, then for the purposes of adjudication or confiscation, it shall presumed that the remaining transactions form part of such inter-connected transactions.
Burden of proof
An Individual, who is accused of having committed the offence of money laundering, has to prove that alleged proceeds of crime are in fact lawful property.
An Appellate Tribunal is the body appointed by Govt of India. It is given the power to hear appeals against the orders of the Adjudicating Authority and any other authority under the Act. Orders of the tribunal can be appealed in appropriate High Court (for that jurisdiction) and finally to the Supreme Court.
Section 43 of Prevention of Money Laundering Act, 2002 (PMLA) says that the Central Government, in consultation with the Chief Justice of the High Court, shall, for the trial of an offence punishable under Section 4, by notification, designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.