Prevention of Money Laundering Act (PMLA) 2002
Context: The Supreme Court allowed petitioners to propose review issues regarding its earlier judgment upholding extensive ED powers under the PMLA, after consulting the Centre’s top law officers. Important Pointers:
Enactment: in 2002, it came into force in 2005
Aim: to prevent and combat money laundering and to confiscate proceeds of crime.
Section 3 of PMLA: defines money laundering as the process of making the proceeds of crime appear legitimate.
Objectives of the Act: Prevent and control money laundering; Attach and confiscate property derived from or involved in money laundering; Deal with associated economic offences.
Amendments: Major amendments in 2009 and 2012 expanded its scope and enforcement powers.
Role of Enforcement Directorate (ED):
Primary agency for investigation under PMLA.
Can investigate, attach property, and file prosecution complaints.
Initiated 775 new investigations and filed 333 prosecution complaints under PMLA (as of 2024–25).
Mandatory Compliance: Banks, financial institutions, and intermediaries must maintain records and verify client identities.
Key Institutions under PMLA:
Adjudicating Authority – confirms attachment of properties.
Appellate Tribunal – hears appeals.
Special Courts – designated Sessions Courts for PMLA trials.
International Cooperation: Allows collaboration via treaties and MoUs with foreign countries for tracing and recovering criminal proceeds.