Financial Crime World

Money Laundering Laws in India: Key Points

This article provides an overview of the key points regarding sanctions, asset freezing, forfeiture, limitation periods, and extraterritorial reach of money laundering laws in India.

Sanctions

Sanctions for breach of Anti-Money Laundering (AML) laws in India can be severe. Here are some possible penalties:

  • Fines and Imprisonment: Individuals who breach AML laws may face fines and imprisonment, with a maximum imprisonment term of 7 years under section 4 of the Prevention of Money Laundering Act (PMLA).
  • Officers’ Liability: Officers who exercise powers under the PMLA without reason may face imprisonment up to 2 years or a fine not exceeding ₹50,000 (section 62).
  • False Information: Individuals who provide false information to cause an arrest or search may be liable for imprisonment up to 2 years or a fine of ₹50,000 (section 63).

Asset Freezing and Forfeiture

The PMLA provides for asset freezing and forfeiture in cases of money laundering. Here are some key points:

  • Asset Freezing: Proceeds of crime can be subject to asset freezing under section 5 of the PMLA.
  • Asset Confiscation: The Enforcement Directorate (ED) has the power to confiscate assets involved in money laundering upon conclusion of a trial under sections 8(5) and 60.
  • Impracticable Seizure: Assets can be frozen if it appears impracticable to seize a particular property under section 17(1A).

Limitation Periods

The PMLA does not have an express limitation period for prosecuting money laundering offences. However, here are some relevant points:

  • No Limitation Period: There is no specific limitation period for prosecuting money laundering offences under the PMLA.
  • Imprisonment Exceeding 3 Years: Offences punishable with imprisonment exceeding three years are not subject to any limitation period under section 468 of the Code of Criminal Procedure (CrPC).
  • Penalty and Limitation Period: Money laundering carries a penalty of imprisonment ranging from three to ten years, which aligns with section 468 of the CrPC.

Extraterritorial Reach

The PMLA confers extraterritorial jurisdiction to ensure compliance with laws for offences that took place in India and involved proceeds of crime remitted abroad or vice versa. Here are some key points:

  • Extraterritorial Jurisdiction: The PMLA empowers the central government to initiate reciprocal arrangements with other nations to enforce provisions of the PMLA and exchange corresponding information.
  • Attachment and Confiscation: Section 5 empowers attachment and confiscation of properties in India equivalent to those derived from proceeds of crime held outside India.
  • Reciprocal Arrangements: Section 56 grants wide powers to the central government to initiate reciprocal arrangements with other nations to enforce provisions of the PMLA and exchange corresponding information.

Please note that these points are based on the provided text and may not be an exhaustive or definitive explanation of the laws in India.