A Practical Guide to the Prevention of Money Laundering Act, 2002

Book Details

CONTENT

INTRODUCTION	1
Basic Steps of Money-Laundering	2
Statement of Objects and Reasons	3
The PMLA, 2002	4
Frequently Asked Questions (FAQs)	6
CHAPTER 1: PRELIMINARY	14
Section 1. Short title, extent and commencement	14
Case Laws	14
Section 2. Definitions	15
Case Law	16
Frequently Asked Questions (FAQs)	42
CHAPTER 2 : OFFENCE OF MONEY-LAUNDERING	50
Section 3 – Offence of Money-laundering	50
Explanation	50
Methods of Money-laundering	52
Mens rea	52
Conscious possession	52
Stand-alone offence	53
Relevant date	53
Burden of Proof	54
If the property derived from the scheduled offence is not available	54
Insertion of Explanation below section 3 of the Act	55
Case Laws	57
Section 4. Punishment for money-laundering	61
Case Laws	62
Frequently Asked Questions (FAQs)	64
CHAPTER 3 : Attachment, Adjudication and Confiscation	80
Section 5. Attachment of property involved in money-laundering	80
Insolvency Proceedings	90
Section 6. Adjudicating Authority, composition, powers, etc.	101
Section 7. Staff of Adjudicating Authorities	108
Section 8. Adjudication	108
Adjudication vis-à-vis appeal	116
Time period of 365 days	116
Taking possession under Section 8(4) of the Act	116
Attachment of a property purchased by a bonafide purchaser	117
Impact of action under PMLA on other penal laws-	117
Role of Adjudicating Authority in confiscation of (tainted) properties	117
Whether the properties purchased prior to the commission of scheduled offence can be attached?	117
Mens rea	118
Opportunity of being heard	118
Reason to Believe	126
Section 9. Vesting of property in Central Government	131
Section 10 Management of properties confiscated under this chapter	132
Section 11. Powers regarding summons, production of documents, evidence, etc.	133
Section 11A—Verification of Identity by Reporting Entity	134
The Circular	136
Frequently Asked Questions (FAQs)	137
CHAPTER 4 : Obligations of Banking Companies, Financial Institutions and Intermediaries	152
Section–12. Reporting Entity to maintain records	152
Section 12A. Access to Information	156
Section 12AA. Enhanced due diligence	157
Section 13. Powers of Director to impose fine	158
Section 14. No civil or criminal proceedings against reporting entity, its directors and employees in certain cases	160
Section 15—Procedure and manner of furnishing information by reporting entities	161
Procedure and manner of furnishing information	161
Manner of furnishing information to the Director	162
Frequently Asked Questions(FAQs)	162
CHAPTER 5 : Summons, Searches and Seizures, Etc.	164
Section–16. Power of Survey	164
Section 17–Search and Seizure	167
Deletion of proviso under section 17(1) of the Act	171
Section 18. Search of Persons	177
Deletion of proviso under section 18(1) of the Act	179
Section 19. Power to Arrest	184
Difference between Detention and Arrest	185
Section 20. Retention of Property	197
Section 21–Retention of records	200
Section 22. Presumption as to records or property in certain cases	203
Section 23. Presumption in interconnected transaction	205
Section 24. Burden of Proof	206
Frequently Asked Questions(FAQs)	209
CHAPTER 6 : Appellate Tribunal	225
Section 25—Appellate Tribunal	225
Section 26. Appeals to Appellate Tribunal—	226
Sections 27 to 34—[***]	230
Section 35. Procedure and powers of Appellate Tribunal	232
Meaning of principles of natural justice	233
Section 36. Distribution of business amongst Benches	237
Section 37—Power of [Chairman] to transfer cases	238
Section 38. Decision to be by majority	238
Section 39. Right of the appellant to take assistance of authorised representative and of Government to appoint presenting officers	239
Explanation	239
Section 40. Members, etc., to be public servants	240
Public Servant	241
Section 41. Civil Court not to have jurisdiction	241
Section 42. Appeal to High Court	241
Explanation	242
Frequently Asked Questions (FAQs)	245
CHAPTER 7 : Special Courts	252
Section 43. Special Courts	252
Explanation	252
Section 44. Offences triable by Special Courts—	254
Explanation	255
Section 45—Offences to be cognizable and non-bailable	268
The amendment made in section 45 in 2018 (w.e.f. 19-4-2018) and its effect	283
Section 46. Application of the Code of Criminal Procedure, 1973 to proceedings before Special Court	309
Section 47. Appeal and revision	311
Frequently Asked Questions (FAQs)	313
Amendment made in section 44(1)(d) of the Act w.e.f. 1-8-2019	315
CHAPTER 8 : Authorities	327
Section 48. Authorities under the Act	327
Section 49. Appointment and powers of authorities and other officers	328
Section 50. Powers of authorities regarding summons, production of documents and to give evidence, etc.	329
Section 51. Jurisdiction of authorities	338
Section 52. Power of Central Government to issue directions, etc.	339
Section 53. Empowerment of certain officers	340
Section 54. Certain officers to assist in inquiry, etc.	340
Frequently Asked Questions (FAQs)	342
CHAPTER 9 : Reciprocal Arrangement for Assistance in Certain Matters And Procedure for Attachment and Confiscation of Property	349
Section 55. Definitions	349
Section 56. Agreements with foreign countries	351
Section 57. Letter of request to a Contracting State in certain cases	352
Section 58. Assistance to a Contracting State in certain cases	354
Section 58A. Special Court to release the property	356
Section 58B. Letter of request of a Contracting State or authority for confiscation or release the property	357
Section 59. Reciprocal arrangements for processes and assistance for transfer of accused persons	357
Section 60. Attachment, seizure, confiscation, etc., of property in a Contracting State or India	360
Section 61. Procedure in respect of letter of request	363
Frequently Asked Questions (FAQs)	363
CHAPTER 10 : Miscellaneous	367
Section 62. Punishment for vexatious search	367
Section 63. Punishment for false information or failure to give information, etc.	368
Section 64. Cognizance of offences	370
Section 65. Code of Criminal Procedure, 1973, to apply	371
Section 66. Disclosure of information	373
Section 67. Bar of suits in civil courts	376
Section 68. Notice, etc., not to be invalid on certain grounds	378
Section 69. Recovery of fine or penalty	379
Section 70. Offences by companies	379
Section 71. Act to have overriding effect	383
Section 72. Continuation of proceedings in the event of death or insolvency	385
[Section 72A. Inter-ministerial co-ordination committee	387
Section 73. Power to make rules	388
Section 74. Rules to be laid before Parliament	392
Section 75. Power to remove difficulties	393
Crypto Transaction brought under Anti-Money Laundering Laws	394
Client due Diligence-The Beneficial Ownership in an Account	395
ED Report Card	396
Frequently Asked Questions (FAQs)	397
CHAPTER 11 : Suggestions	403
The Schedule [See Section 2(Y)] [Part A]	409
APPENDICES	�
The Prevention of Money-Laundering Act, 2002	421-509
The Prevention of Money-Laundering(Appeal) Rules, 2005	510-512
The Prevention of Money-Laundering(Manner of Receiving the Records authenticated Outside India) Rules, 2005	513
The Prevention of Money-Laundering (The Manner of Forwarding A Copy of the Order of Provisional Attachment of Property along with the Material, and Copy of the Reasons along with the Material in Respect of Survey, to the Adjudicating Authority and Its Period of Retention) Rules, 2005	514-518
The Prevention of Money-Laundering(Receipt and Management of Confiscated Properties) Rules, 2005	519-520
The Prevention of Money-Laundering (Maintenance of Records) Rules, 2005	521-545
The Prevention of Money-Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005	546-556
The Prevention of Money-Laundering (the Forms and the Manner of Forwarding a Copy of order of Arrest of A Person along with the Material to the Adjudicating Authority and Its Period of Retention) Rules, 2005	557-560
The Prevention of Money-Laundering (the Manner of Forwarding A Copy of the Order of Retention of Seized Property along with the Material to the Adjudicating Authority and the Period of its Retention) Rules, 2005	561-564
The Prevention of Money-Laundering (Issuance of provisional Attachment Order) Rules, 2013	565-566
The Prevention of Money-Laundering (Taking possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013	567-572
The Prevention of Money-Laundering (Restoration of Confiscated Property) Rules, 2016	573-574
The Adjudicating Authority (Procedure) Regulations, 2013	575-588
Recent Notification dated 3-5-2023	589