Govt tightens anti-money laundering laws, widens ambit of proceeds of crime

The government has tightened the anti-money laundering laws by expanding the ambit of the “proceeds of crime”, which now includes properties and assets created through any criminal activity even if it is not under the Prevention of Money Laundering Act (PMLA). These crimes will now be considered as “relatable offence”.

The new amendment has been brought in with the Finance Bill passed in the Lok Sabha on Thursday.

According to the new norms, the proceeds of a crime will include property not only derived or obtained from the scheduled offence, but also that which is directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.

The Bill said, “A person shall be guilty of offence of money laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted in possession, acquisitions, concealment or claiming as untainted property.”

The Finance Bill has amended eight clauses of the PMLA, 2002. During the discussion in the Lok Sabha, Finance Minister Nirmala Sitharaman said explanations are being brought to certain existing clauses to remove ambiguity and confusion.

The minister also said of the eight amendments, one related to deletion of a proviso. “A new proviso is being added to only make sure that where a case exists in one court and the hearings are going on, and where in a different court there could be proceedings happening, this two cannot be clubbed together and treated as one.”

To make this work, the PMLA’s Section 45 has been tweaked making it difficult for launderers to get bail if the offence is cognisable. The norms empower probe agency to arrest without a warrant if the conditions entailed in the section are fulfilled.

“[It] is clarified that the expression ‘offences’ to be cognisable and non-bailable shall mean to have always meant that all offences under the Act shall be cognisable nothwithstanding anything to the contarary contained in the Code of Criminal Procedure,” the Bill said.

Section 45 of the PMLA Act provides that no person can be granted bail for any offence under the Act unless the public prosecutor, appointed by the government, gets a chance to oppose his bail.

If the public prosecutor does so, the court has to be convinced that the accused was not guilty of the crime and additionally that they were not likely to commit any offence while out on bail.

However the Supreme Court had set aside this clause in 2017.

Besides reporting entities will have to do a detailed authentication with regard to transactions which look suspicious or carry a high risk of money laundering or terror financing.