Under the proposed bill to curb money laundering, the onus to prove that unaccounted money was not acquired through sale of arms, drug peddling or other such illegal activities will be on the accused persons.
Official sources said this provision, similar to that found in the Prevention of Corruption Act, will give the enforcing agency a lot of teeth to proceed against persons suspected of money laundering.
The committee, which is engaged in drafting the proposed bill, is yet to decide on how to tackle transactions under Rs one crore, which are prima facie found to have been earned through dubious sources. It has been proposed by the committee that for investigations to be undertaken by an agency, a floor limit for transactions should be set at Rs one crore.
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However, there is a slight difference of opinion on whether the gravity of offence in earning money from the sales of arms and drug peddling should be treated on par with customs evasion or even gambling and prostitution. There is also an opinion in the committee that there should be differentiation in the gravity of the offence according to the source of the money.
To arm the enforcing agency with enough powers, it has also been decided that these offences would be made cognizable - i.e. no warrants of arrest would be required if the agency sought the arrest of an accused person. This would also mean that the powers of arrest of the Enforcement Directorate may have to be done away with.
In addition, the bill is also expected to provide that properties acquired with the help of money earned from banned activities - the sale of arms or drugs, gambling and prostitution could be attached by the enforcing agency. The appeal against this would only be entertained by the High Courts though the trials would take place at the district level courts.
Commercial banks will also be required to inform intelligence and enforcement agencies of huge transactions. The limit for these transactions could not be ascertained. However, the decision on the agency which is to enforce the provisions in the bill is yet to be finalised.
Officials of several agencies including the Enforcement Directorate, Central Bureau of Investigation, Central Board of Direct Taxes, Directorate of Revenue Intelligence are engaged in the drafting of the proposed bill. It was to be introduced in the Parliament during the budget session but the draft could not be finalised.